The Best Real Estate Investment Strategy: House Hacking Explained

Ian Jimeno (00:00)

Yeah, totally. I love house hacking. And that’s how I started back in 2019. ⁓ lowest barrier to entry for investing. I started back in San Diego, high cost of living area, me and my wife, we were maybe like three months married, and we decided to start house hacking my realtor at the time was like, yeah, you just rent out the other unit because we bought a duplex in San Diego.

rent out the other unit rents out a bedroom in your home and you can cut your mortgage in half and I was already stoked to cut my mortgage in half.

Dylan Silver (02:04)

Hey folks, welcome back to the show. Today’s guest Ian Jimeno is a single family investor and realtor in Denver. You can check him out on YouTube on his channel invest in Denver with Ian. welcome to the show.

Ian Jimeno (02:19)

Stoked for it. Dylan, appreciate you, man.

Dylan Silver (02:21)

Thanks for hopping on here. And I was mentioning to you before we started the podcast that you’ve got a great channel. And if I want to know exactly which neighborhoods in Denver to check out, I should check out the Platte Street and Central Street area of Denver.

Ian Jimeno (02:36)

That’s definitely one of them. And it will depend on your goals and your strategy, what you want to experience in the Denver area. But yeah, I love that area, but I appreciate you taking some time to watch my stuff, man.

Dylan Silver (02:50)

Absolutely, man. I’ve got ⁓ really a lot of respect for any investor agents because I know as an investor friendly agent myself, it’s a different side of the business, right? So you’ve got your retail ⁓ agents, which I would say is most most folks and then you’ve got folks who work with investors. How did you get into the investing world?

Ian Jimeno (03:12)

Yeah, totally. I love house hacking. And that’s how I started back in 2019. ⁓ lowest barrier to entry for investing. I started back in San Diego, high cost of living area, me and my wife, we were maybe like three months married, and we decided to start house hacking my realtor at the time was like, yeah, you just rent out the other unit because we bought a duplex in San Diego.

rent out the other unit rents out a bedroom in your home and you can cut your mortgage in half and I was already stoked to cut my mortgage in half.

My mortgage at the time was about $5,300 per month. And that was significant. None of my friends were buying homes, they were all renting or living with their parents still. And I was like, dude, I want to bank on this real estate asset class here. And ⁓

Lo and behold, here we are still holding onto the property. ⁓ And maybe I’m getting ahead of myself here. It’s been a journey holding onto the property, but it has definitely paid itself in dividends. So house hacking is how I really started.

Dylan Silver (04:17)

house hacking. love it. And when we talk about house hacking, there’s a number of different ways to go about it. I know a lot of people have told me, hey, just buy a quadplex or not just buy a quadplex, but buy a quadplex because if you’re going to get two, you might as well get four. ⁓ How would you advise folks who may be newer investors or new investors and are looking into getting their first house hack?

Ian Jimeno (05:27)

Yeah, totally. First of all, educate yourself. And a podcast like this is a great way to start and also be around people that ⁓ have done things that you have wanted to do. So let’s say for me, I had no idea what house hacking was. My realtor didn’t even know at the time what house hacking was. ⁓ That term itself was just not in his vocabulary. He was just like rent out rooms and you can…

make a lot of money from it because San Diego is a very ⁓ attractive place for the business owner, for renters, all that good stuff. So for those that are trying to get into house hacking, educate yourself, but enough to make yourself dangerous. There’s only so much learning that you can do. The best thing you could do is just get into it. And me putting down three and half percent using an FHA loan to get into a duplex in San Diego.

was probably the lowest barrier to entry without me being a veteran. So I’d say go into it, you’re gonna learn so much more from actually doing it and make a lot more money from owning an asset class like real estate.

Dylan Silver (06:34)

Now, did you house hack a single family home and rent out the individual rooms in the home?

Ian Jimeno (06:39)

I bought a duplex and we, yeah, so it was a three bed, bath and also a studio on top of the garage. And so what we did was rented out one of the rooms, the master bedroom and the primary, the three bed, bath. And then we also rented out the studio. So we made about $1,200 for that primary bedroom and the three bed, bath. And then we made about 1,600.

Dylan Silver (06:41)

Do flat.

Ian Jimeno (07:06)

on the studio. So about $2,800 per month was what we were getting.

Dylan Silver (07:10)

You know, it’s a great way to get it really is a great way to get started. ⁓ And I’ve heard some mixed feedback about being able to buy one of these deals. I’ve heard from a number of guests who were lenders that in many cases, it’s actually easier to qualify for a small multifamily duplex, triplex, quadplex than it is a single family.

Ian Jimeno (07:32)

Yeah, I believe it. ⁓ we did not incorporate any sort of rental income potential on the purchase of our duplex. ⁓ maybe that is on our fault because we didn’t even know that was even a possibility for lenders to actually qualify you based on the rental income. we were just happy we were able to qualify. So I think for future, ⁓ buyers and house hackers out there, the right lender and the right realtor will get you very far.

If you’re working with the wrong people, you’ll sort of be limited by their knowledge base and what they are capable of.

Dylan Silver (08:07)

Now, I do want to pivot a bit here and ask you some granular questions about Denver. I’ve been, and I mentioned this to you before the show, I’ve been to Denver once when I was a kid on a vacation, we went on a skiing trip. And that’s where my knowledge of Denver sort of begins and ends. But Denver is an amazing area. It’s an amazing destination for so many reasons. The weather being one of them. Do you see that there are any

trends in the single family space as far as maybe short term rentals or midterm long term other investors coming from out of state. What are you seeing out there in the market?

Ian Jimeno (08:44)

Yeah, a hundred percent. And I’ve sort of made it this pivot as a real estate agent ⁓ to niche down into assumable loans. And maybe that’s something we could talk about later, but yeah, as far as like single family homes, it’s still very attractive for investors to purchase here, especially when some of my clients are coming from California. Like they’re looking at a median home price in the Bay area or in San Diego at $950,000 to a million plus. And they’re like, this is insane. We can’t really.

have our money deployed here as a wise option for investing. So what we’re gonna do is look in a place where they bank on the employers being here. The people that are graduating college are staying here in the Denver Metro area and maybe even Boulder or Fort Collins or even Colorado Springs, plus a strong military presence in Colorado Springs as well, which is where I service as a realtor Denver Metro and Colorado Springs.

So as far as the attractiveness, it comes in many different fronts and there’s a huge healthcare system here as well. Lots of hospitals, tons of growth and a lot of employers are staying here as well. And of course, it’s just lovely to be here. I mean, compared to let’s say the Northeast or even Midwest where you get negative 20 consistently during the winter time, here you’re averaging maybe 20 degrees, 30 degrees, but it’s sort of this dry weather, this dry coldness, this chill to it.

Of course, it takes some getting used to with being the high altitude, but at the same time, the snow is dry. It’s beautiful. It feels like a hallmark card. So I love Denver here.

Dylan Silver (10:52)

so the winners don’t get horribly cold.

Ian Jimeno (10:54)

not horrible, honestly. ⁓ after working with clients that have moved here, they swear by it. They’re like, this is a breeze. I don’t want to say they go out in shirts and shorts here, but ⁓ you know, they’re a little bit more maniacal in their attire versus me. I’m still bundled up. I still got my scarf. I still got my beanies on, but ⁓ they love the weather here compared to where they’re from, let’s say Buffalo, New York, or even Ohio.

Dylan Silver (11:20)

Yeah.

That that’s a big draw. I had no idea that it was I guess I in the back of my mind, I’ve seen folks like skiing and shorts. Maybe that’s an happens out there. But ⁓ what’s interesting when we talk about single family investing specifically, you mentioned if I if I heard correctly, assumable loans, right?

Ian Jimeno (11:29)

haha

That’s right.

Dylan Silver (11:42)

This is a space where right now there’s a lot of interest. I’m not just seeing it in single family. I’m also seeing it in multi-family. When did you start looking at the strategy and how’s it been going for you?

Ian Jimeno (11:55)

Yeah, the strategy is very enticing, especially for my clients that are just bogged down with the six and a half, 7 % interest rates as investors. Here we are providing a service and a strategy where they can assume a two and a half or even 3 % loans. I like to tell them they’re traveling back in time, back in 2020 or 2021 when the height of the markets with, you know, everyone looked like a genius putting down like.

50K, 100K over asking price just so that they can attain a property with two and a half to 3 % interest rates. I got into it recently because as a real estate agent, I originally started with the fine team with Craig Kerlop. He wrote the house hacking book and with being on that team, I loved helping out new investors, new homeowners and making sure things were affordable for them. And

As time progressed, once we started to see four, five, six, 7 % interest rates, that goal of like living for free or living as close to free as possible was a much harder pitch. And so here we are in a world where we can still pick up properties for let’s say $600,000. And it’s sort of been hovering around that price point, that median price point of 600K within the Denver metro area. But now instead of six and a half percent, we’re getting

two and a half or 3%. And that just makes things so much more affordable for homeowners who are just constantly bombarded with things are unaffordable, things, the cost of living is going up. And it’s just insane for me to ⁓ pitch that as a traditional buyer. I want them to get into a home if that is so what they desire.

Dylan Silver (13:31)

you

When we talk about the assumeable loan space, right? I’m familiar with working in distress sellers and with ⁓ investors, ⁓ but it’s interesting talking to a fellow realtor about, you know, potentially using this for more deals than maybe what traditionally people.

would be looking at? Am I on to something in saying that, that you’re bringing this strategy to maybe more of the general public than just specifically the investor niche?

Ian Jimeno (14:14)

100%. Yes. So there are two types of loans that people can assume. It’s the VA loan and FHA loan. We don’t really encounter too much USDA loans, but those are assumable as well. So for the primary ⁓ residence owner who wants to move into the property, FHA loans are great. I mean, you could just move into the property. The thing is you do have to pay for the equity that is in the property for the seller to move on to their next one. So for primary residences, you look for an FHA loan.

And then you also have the VA loan where investors or primary residence owners can purchase those or assume those types of loans as well. So you don’t have to be a veteran to take over those VA loans. We do have our ways of going about it and having that conversation with the listing agent. it’s just, yeah, it’s a whole world out there. And I recently got into this maybe five ish months ago and I am all in on it.

Dylan Silver (15:10)

⁓

Now, without giving away all the gold, ⁓ for other realtors, myself and then folks who may work with investors or they may not.

What would be your feedback for how to to breach this conversation with retail buyers, right? They may not have in their head at all that this is a possibility. Do they have to know something about this beforehand? How does that conversation sound again without without giving away all the gold?

Ian Jimeno (16:17)

Yeah, appreciate that. The main thing is education. Like not many people, I think the last time Assumable Loans were actually in the proper media, popular media was like back in the 80s. And I was not really conscious in the 80s. So with that being a resurfacing idea here in the 2020s,

It is so attractive for buyers just because they don’t know that this is a thing. So what we’re trying to do as realtors is just educate the public. And we have a website that has FHA loans, VA loans, all these assumable loans that are on the MLS right now that are active. And so with that, they get to see what ⁓ their PITI is, principal interest, taxes and insurance, basically their mortgage, and how that would differ than if you were to

purchase it traditionally in this market. So there’s a lot of ⁓ education that has to happen and we are here for you. You know, we’re walking through this transaction hand in hand with our clients and making sure that they understand the whole process and the lender of the assumable loan is with us the whole way as well. It’s not like it’s anything illegal. This is definitely legal and it is within our confines of legalities to assume this law.

Dylan Silver (17:36)

I think it’s great, especially bringing it to the retail buyers, because, you know, as far as investors, I understand that there could be some as someone who’s worked with investors, that people can have a perception about investors. That may not always be true. There may be some grains of truth in there. But when you’re talking about retail buyers being able to get rates that they don’t exist, this is something that more people need to look at.

because it’s going to open the door to homeownership for more people. And that’s something that I think everybody’s on board for. ⁓ We are coming up on time here though, Ian. Where can folks go to reach out to you if they’re in the Denver area? Maybe they’re looking at homes or if they’re outside of ⁓ the Denver Metro and are thinking about investing.

Ian Jimeno (18:21)

Yeah, 100%. Thanks for giving me the plug. Definitely check out my YouTube channel. It’s invest in Denver with Ian, and I do a lot of lifestyle videos. ⁓ I do house hacking videos like home tours, also assumable loan tours, things like that. And just educating the public on that and more specifically within the Denver metro area. I’m also pretty active on my Instagram, which is Ian dot house hacker and ⁓

I love to do more house hacking content and ⁓ more video tours on there. And you get to peep into my personal life as well. I’m a recent dad, so I like to post a lot of pictures about my experiences as a new dad, especially with lack of sleep. So ⁓ enjoy me and my content over on those platforms.

Dylan Silver (19:10)

Ian, thank you so much for coming on the show today.

Ian Jimeno (19:12)

Thank you, Dylan.