In short
Danielle Daly returns to discuss what happened after her earlier investing episode—specifically the refinance she just completed. She explains why she refinanced in today’s lending environment, the costs, timeline, and how her 2-1 buydown was handled, plus lessons on reserves and adapting strategies (co-living saturation).
Guest backgrounds
Danielle Daly works at BiggerPockets on the advertising sales team and is a real estate investor. She previously bought her first property; now she’s at property number three. She uses co-living with 6–12 month leases in the Denver metro, self-manages, and has experience with house hacking (first two properties) and a simpler “house hack” renting to her brother.
Key claims
Maintain reserves (baseline ~$10k per property; Tony suggests $30–50k). Refinance can be worth it even with modest rate drops if out-of-pocket cost is low. Co-living is becoming saturated and may require pivoting to multifamily later.
Notable examples
First property cashflow ~$250/month while she lived there; second property broke even. Refinance: roughly $8k closing costs, lender credits reduced out-of-pocket to a couple thousand; she saved ~$250/month. She refinanced a primary residence (conventional loan) from ~7.1% (with 2-1 buydown) to a locked 6.6% for years 3–30, while still paying ~5.6% due to the honored buydown. Timeline: about 3.5 weeks, closed virtually with online notarization.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VODanielle Daly's Investing Journey
0:45 to 3:00
Danielle shares her experience and growth as a real estate investor since her last appearance.
“Not sure how I got here, but you know, second time's the charm.”
Cash Flow and Property Management
3:00 to 6:00
Discussion on the cash flow from Danielle's properties and the shift in her management strategy.
“Actually, let me ask one follow-up question.”
Lessons Learned in Real Estate
6:00 to 8:00
Danielle shares key lessons learned about having reserves and long-term planning in real estate.
“my debt to income ratio was actually a little bit too high.”
Setting Reserve Thresholds
8:00 to 12:00
Discussion on how much reserve capital to maintain for properties and balancing cash flow.
“that I could just pull out very easily so that I have it in case something like that pops up.”
Understanding Interest Rates and Refinancing
14:01 to 15:00
Learn about the current state of interest rates and their impact on refinancing decisions.
“I don't want to pour salt in the wound, but I'm going to do it anyway.”
Assessing Costs and Benefits of Refinancing
15:01 to 18:00
Discover how to evaluate costs associated with refinancing and the factors that influence the decision.
“for the first time in, I think, like three years.”
Closing Costs and Loan Structure
18:01 to 22:40
Understand the various closing costs involved in refinancing and how they affect your loan structure.
“It was earlier this year back in, I think it was January, like late December, early January.”
Navigating the Refinance Process
22:41 to 27:30
Learn the steps involved in the refinancing process from decision to closing.
“What was the purchase price, your original loan balance?”
Types of Loans in Refinancing
27:31 to 28:00
Get insights into the types of loans available for refinancing and their implications.
“Which seems minuscule, but it actually gets annoying.”
The Refinancing Process Explained
28:00 to 30:00
Learn about the streamlined refinancing process and its similarities to buying a home.
“Two, you just already kind of have experience.”
Show all 15 chapters
Understanding HELOCs and Appraisals
30:00 to 31:20
Discover the process and requirements of obtaining a Home Equity Line of Credit (HELOC).
“I'm actually going through a HELOC process right now on my primary and they don't even do like a true appraisal on the property.”
Quick Turnaround on Loan Approvals
31:20 to 32:20
Hear about the surprisingly fast approval process for HELOCs and refinancing.
“So very similar to a normal timeframe, but faster by a few days.”
Next Steps in Real Estate Investing
36:26 to 42:00
Danielle discusses her shift in strategy and future plans as a real estate investor.
“Head to CostSegregation.com before April 15th.”
Leveraging Tools for Property Management
42:00 to 43:36
Discover how to streamline property management using digital tools.
“terms of managing tenants, running background checks, applications.”
Connecting with Danielle Daly
43:48 to 44:19
Find out how to reach out to Danielle Daly and learn more about her journey.
“Where can people reach out to you and find out more information?”
Transcript
Automatic transcript. May contain errors.0:00Ashley Kehr:Today's guest was on the show before, but what's happened since then is where the real lessons are. Because buying the deal is one thing, refinancing it in this market, that's a whole different game. So if you've ever wondered, you know, what actually happens after the episode ends, after the Instagram posts, this is the behind the scenes of how a real estate investor navigates a refinance in today's lending environment.
0:28Ashley Kehr:this is the real estate rookie podcast i'm ashley care and i'm tony j robinson and today we're welcoming back danielle daly she's previously been on our show talking about her investing journey and now she's back to catch us up on what's changed and we're going to go deep on a refinance you just completed danielle welcome back to the show you are now a two-timer on the Rookie Podcast. Happy to have you back. Hello. I feel honored. Not sure how I got here, but you know, second time's the charm. Thanks for having me. You've also been on the BP Rookie panel at BP Con several times too, also. So a familiar face to the rookies.
1:04Ashley Kehr:But for anyone who didn't catch your first episode, give us the 60 second overview of who you are and kind of what you've been working on since we last spoke. Yeah, 60 seconds. Oh man, I will do my best. Well, hello, everyone who I do not know. My name is Danielle Daly. I currently work at BiggerPockets on the advertising sales team, and I'm also an investor. So last time, if you saw me on the Berkey podcast, I had just bought my first property. I am now on property number three. So since then, I've been maintaining co-living strategies, and I'm also living in my house on my own. So my first two properties are now fully rentals, but I've really been working on getting a property per year since we last spoke.
1:48Ashley Kehr:So the first two properties were house hacks and this third property, you're not house hacking. So I'm sort of house hacking. I'm actually renting out to my brother right now. So that's the easiest house hack. Yeah, it's the easiest house hack. But I didn't go into this without wanting to house hack. And then he decided to move. So it worked out great. But I just hit a point where I think I'm kind of not wanting to have roommates anymore. So that's the shift in strategy. Besides the house hacking element, have you done any kind of short-term rental, long-term rental, or has it just been kind of the co-living, having roommates in the extra bedrooms?
2:32Yeah, so I've only done co-living right now. So it's long-term strategy, co-living. I'm looking at leases anywhere between 6 and 12 months. I am considering diving into midterm rentals as the market does sort of shift, which I'm sure we'll dive into during this episode. But yeah, I've only done long-term as of right now. As your portfolio has kind of shifted and grown, Danielle, I guess, is your, is your, well, you actually just kind of hit on that. Hold on. Let me see. There was a different question that I wanted to ask too. No, I think you had actually both of those. Actually, let me ask one follow-up question.
3:04So now that you've turned your first two properties into like true investment deals. Give us the quick numbers. Like what was it doing when you lived there and what are both of those properties doing now in terms of cashflow? Yeah. So when I was living there, I'll just go each property at a time. So the first property I was making about 250 bucks a month. So it was pretty minuscule, but I also lived for free, right? So that was my first house hack, lived there, rented out the rest of the rooms. And then my second property between having now two at that point, right? Living in the second house hack, renting out the rooms, I was breaking even.
3:37So between both properties, still paying nothing. There was no cash flow, but I was not paying anything to live. So the first two properties.
3:47Ashley Kehr:What would you have had to pay if you were renting a room very similar? And like if you rented your room to yourself, how much were you saving in rent? There's two ways to look at that. If I was going to go rent a room in someone else's house hack, call it about 900 on average in the Denver Metro. If I was going to go get an apartment, that's a different story. That could be upwards of$2 ,500 to have a one bedroom apartment within Denver. So big range, obviously, but definitely saving at least, call it$800 to$900 a month at the low end if I was renting just a room and a house. And you're making$250 cash flow and you're building equity in a property that is appreciating and your tenants are paying down the mortgage.
4:29Exactly. Yeah. It is a no brainer. Absolutely. It was an amazing thing to do. It's gotten me to where I'm at today.
4:37Ashley Kehr:What has been like one of the biggest lessons that you've kind of learned through this, you know, experience that you've done so far in your investing journey? It's a great question. I think there's a couple of different lessons. The first one is you should have reserves. Like I am all for being a little bit risky, right? It's just me. I don't have a family yet. So I'm all for it. However, I think I got lucky with my first property where the entire year, nothing went wrong, like literally nothing. I think I maybe called a plumber once in the first year. So I'm like, oh, real estate's easy. This is great.
5:13I'm making 250 bucks a month living in this property, living for free. This is awesome. I think that reality hit me when I got the second property. So the second property, love it. It's a great property. So this is not a complaint. However, the things that went wrong were almost like almost funny for lack of a better word. Like I was like, this is crazy. This is like a movie. Like I had a couple of flooded bedrooms that happened in that house. Dude, that was a whole other story in itself. Had a lot of plumbing issues, had to get a new AC unit, ended up having to get an entire HVAC unit for one of the houses.
5:49It was just like thing after thing that popped up. So it made me realize like, wow, okay, I need to have reserves. and the reason that is a huge learning lesson is when I got to the third property, my TTI, my debt to income ratio was actually a little bit too high. So I was not even able to get a loan for that HVAC system that was quite expensive. So I would have been in a little bit of a tough spot if I did not have reserves to be able to pay that in full. So definitely have reserves. And then the second thing is I have to remind myself and for all of you listening, definitely keep this in mind.
6:23And this is the long game. We're playing a long game here. This is, for me, houses that I plan to hold for the next at least 30 years. So I have to remind myself when expenses like CapEx do pop up that, okay, we're in it for the long game. This is part of the expense of owning a home. This is just part of the process. And if I can just hold on, I will be completely set for retirement with just these three properties. So those are my two learning lessons. Danielle, you talk about reserves. How much do you feel is like maybe a baseline? And then maybe even a question for you too, like how much is too much?
7:00Because I also think you can get to a point where you've got too much sitting in reserves, right? If you just always kind of continue to collect that. So how did you kind of set a threshold for yourself, Danielle, and what the minimal amount of reserves are that you want for a property? That's such a good question, Ashley. I definitely want to hear from you after in terms of the too much, because Tony, like this is a quick side note. But I really love that you asked that because I'm actually diving into just setting myself up in terms of investing outside of real estate, making sure I'm diversified.
7:28So as I've gone down that rabbit hole, I realize if you have money sitting there, you're just it's wasting away, right? Due to inflation, like I don't want it just sitting in my account. So for me, I'm trying to figure out how much do I need for real estate versus how much do I want to allocate to other investments and potentially more real estate. So for me, that number is about$10 ,000 per property. Let's say 15 ,000 per property if you really want to be like a little bit more risk averse. But I would say at least 10 ,000. So for me, 30K, having it cash liquid or in like a high yield savings, like something that I could just pull out very easily so that I have it in case something like that pops up.
8:05Because I don't think something crazy would pop up in all three houses at the same time. But you also never know. So that's my number, Ashley. I would actually love to hear what you think is too much.
8:16Ashley Kehr:Yeah, and mine fluctuates. Oh, we're going to buy a house. Okay, let's pull money out of reserves and let's use it to buy the house and then we're going to pay it back when we're financing. So it's constant money management moving, but baseline is between 30 and 50 ,000. I keep in a savings account. Like I would say it probably never drops below that 30 ,000. And I have about, I think I'm at 20 properties now, but also small, like single family homes are 1100 square feet, you know, so my roof replacement costs, my HVAC replacement costs are not as large as, what are you buying? Four or five bedroom homes?
8:58Ashley Kehr:Up to six. Yeah, yeah, yeah, in Denver. So my CapEx expenses are way lower per a property. But one thing that I also do is I have$200 ,000 line of credit. So I also keep my line of credit for if I ever needed to pull off of it. So when I do do the no-no and pull money out of my reserves to pay for the down payment on a new property or something like that, I have my line of credit still, but then I work to replenish my reserves. But I used to think that I needed a lot more, but I'm definitely not as conservative as I used to be kind of knowing in my head, okay, not all of my HVAC systems are going to need to be replaced at this single moment in time.
9:49Ashley Kehr:So I definitely am not as conservative as I used to be too. But I think that having the line of credit as kind of a backup has really like helped me with that too. But as a rookie, I recommend being super, super conservative. And I also have other income streams that I can pull from if I needed to put cash in. But I'm also keeping my, like besides my savings, just my actual property accounts, I usually leave a pretty healthy amount of cash just sitting in those two that just from the cash flow building up in there too. Yeah. For me, it's slightly different, right? I mean, because we have a lot of different partnerships that kind of infiltrate our business.
10:34So I can't have just like one large bucket. So we actually do have a separate reserves account for every single property. And the goal for us, again, it depends on the property for our bigger properties, we try and get closer to maybe like six months of reserves. And then on the smaller part, like, you know, tiny homes that are less than 400 square feet that were built in 2022. I'm not super concerned about having a lot of money in reserves for those. So maybe it's three months of reserves for those properties. But we do have our separated out by property. And the reason that we, you know, it's a little trickier for you is because if property A has an issue, I can't necessarily tap into the reserves for property B because they're two separate partnerships, right?
11:11So we really do have to make sure that each individual property is funded appropriately.
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13:15Ashley Kehr:Okay, welcome back. So Danielle, let's start. Why did you even decide to refinance your property in the first place? Well, I've been wanting to refinance at least one of my properties since buying all of them. I missed the wave of the 2020 through 2021 crazy interest rate era. So unfortunately, all of my properties. And Danielle, I don't want to pour salt on the wound, but Ash, what's your lowest interest rate right now? I didn't buy anything when interest rates were low and I didn't refinance. So my lowest interest rate is, I think, a 4.25. Got it. My lowest right now is a 2.65%. Oh my gosh. So every time you do bring this up on an episode, Tony, it is...
13:59I'm pouring salt on your wound too.
14:00Ashley Kehr:Yeah. Affecting me too. I don't want to pour salt in the wound, but I'm going to do it anyway.
14:09That is half of mine. My lowest is, what is it right now? I think it's actually 5.1. So it's pretty good. But my second property is a 6.6. And then my third property that I bought was a 7.1. And I say was because that is the one I decided to refinance. Rates basically got down to, I mean, they're around six right now, but they were down to like 6.2, 6.3-ish when I went to refinance. And I have a really great lender who helps me watch rates. And he actually reached out and said, hey, this could be a good time to look at doing a refinance. So decided to move forward with it. And we'll get into the numbers, I'm sure.
14:48but it just was something for me to reduce my monthly mortgage because that's what I care about, right, is having the lowest expenses possible over the long term. And as of this recording, I just saw this news earlier this week, but rates dropped below 6 % for the first time in, I think, like three years. And I just pulled it up right now. And the 30-year fix is at 5.98%. So we're just under 6%. But I think 6 % was like, just based on from people who are much smarter than me, what a lot of folks are saying is that there's this psychological barrier at six. And once we get below six and that number swaps from a six to a five, that starts to change the buyer psychology.
15:28And hopefully we'll get more people kind of coming back into the market and kind of building up the real estate industry again. But with that, as more buyers come in, so is who does the, you know, maybe the competition and we put some more upward pressure on prices. So I'm really curious to see how rates and supply and buyers kind of play out for the rest of this year because five, we haven't been here in so long, it feels like. So yeah, we'll see what happens. Yeah. And even like, that's a great point too, Tony. On that note, there's also, I think for rookie investors, like we're just getting started who have their first or second properties.
15:58You want to figure out like one, how much reserves do you have on hand, right? How much, how much is your income? Like how much money do you have to be able to spend on a refinance? Because it does cost money, right? So for me, we ran the numbers. It was a pretty low cost. I'm in a position where I have the extra cash. And so I wasn't going to sit here trying to time the market. I kind of had a feeling we would get below a six at some point this year, but I also knew I can always refinance again. That's number one. Technically, you're supposed to wait six months, but some lenders will work with you.
16:28You could just do it again. But two, it was a low cost for me because of a few different factors, which we can dive into, but it was a low cost. So for me to have savings for my mortgage moving forward. It was worth it to me. But I think it's more of a personal thing at that point of someone trying to wait and time the market versus being okay with the savings that they could lock in now.
16:52Ashley Kehr:Now, Danielle, the thing I think of as refinancing is like, oh my God, all the closing costs I have to pay again, the fees, the commitment fee, all of these things. Can you break down before we actually get into the loan amount and things like that as to what were the fees like for the refinance process and how did you decide that it would be worth it to go ahead and refinance? Yeah. So the closing costs, I should have had them pulled up right in front of me, but they roughly ballparking it. There were roughly about 8 ,000 for closing costs. So it's pretty similar to closing a normal loan when you do a refinance.
17:28The lender I work with, because I've consistently worked with him on all three properties, he offers a little bit of a discount. So it's typically in credits. So it was, I think, roughly maybe like$2 ,500. Do not quote me on these numbers in terms of the discount that I got towards those closing costs.
17:45Ashley Kehr:No, we're going to fact check you at the end of this episode. Please supply the document. We'll never know. Even if they're way off, we'll never know. So I'll totally be off here. But yeah, between his credit and then another thing is the timing that I closed on the loan. It was earlier this year back in, I think it was January, like late December, early January. Because of that timing, I actually didn't pay. You basically skip a month that you have to pay for your mortgage. And so my mortgage was at the time already at roughly$3 ,400. So that's another$3 ,400 towards closing costs that I basically, like you pay it over the course of the loan.
18:25But considering, you know, as our mindset should be as an investor, I don't really care about like an additional payment towards the end of the loan because I expect tenants to be paying that off. So that was also part of the savings, so to speak, of what I didn't need to pay. And then I might be missing something there, but whatever it was, it basically came down to me paying like a couple thousand dollars for the refinance, out of pocket. So it wasn't really a huge cost to me. And then I ended up saving about$250 a month on my mortgage. So if you do the back of the napkin math on that, that's taking you, what, a couple of years, I think, to get back to pay off basically what you paid for the refinance.
19:08Ashley Kehr:Yeah, probably even less. Yeah, even less than that. For me, in the position that I'm currently in, that was worth it. For me to lock something in, to know I can always refinance again, but to spend a minimal amount for me to be able to lock in a lower rate, especially considering I also have a 2-1 buy down to complicate things even further, that was worth it to me, right? For some people, it might not be at that point in time. It wasn't a super reduced rate. It went from a 7-1 to a 6-6, right? So it's something, but for me, it made sense at this point in time. Danielle, were you able to wrap any of those closing costs into the actual loan itself?
19:47Ashley Kehr:that's a great question actually i'm not 100 sure well i guess did you take more we could kind of get into that piece tony as to like if she took more and did you i guess the way to answer that is did you take bring like write a check at closing yes okay because i refinanced my primary residence when rates got super low right i was able to get i think when we bought our house this was in 2018 we're like a 4.7 or something to 4.8 or something like that when we bought and when rates got super low. We refinanced, we got down to a three. And I just looked it up while you were talking through your numbers and our total closing costs were 11 grand.
20:23But we had zero out of pocket costs for that and it just got rolled into the new loan. So we were able to refinance without actually spending anything out of pocket on this deal. And every lender is slightly different on how they allow you to do that, but that was the benefit for us.
Read the full transcript
20:37Ashley Kehr:I have a question because I've never refinanced a property that had escrow. So is your escrow money rolled over to the new loan or is part of that closing cost you prepaying for another year of insurance and property taxes? That is a good question. And I'm looking it up here. I don't consider that really a closing cost because you're going to pay that anyway. So So that would even reduce the amount of fees that you're paying. Yeah. So that was actually separate, right? So I did have to prepay some of the insurance and property taxes, but that$11 ,000, that was the appraisal, the origination fee, right, which is the majority of that.
21:21And then all the other escrow fees.
21:23Ashley Kehr:What was the origination fee on that? It was$8 ,800. Oh my God. Wow. My small local bank charges like$1 ,000. That's crazy. Then I had another$500 for the appraisal and then another$1 ,800 in escrow fees. But zero out of pocket. I wish I had that. Definitely. Okay, Tony, let's just wrap up your example real quick. So you paid that money or that money was wrapped into your loan. How did your payment change and how much were you saving each month? Yeah, gosh, I would have to look up what my original principal interest in taxes payment was. But after this refinance, it was$2 ,900 was the principal interest taxes and insurance.
22:08Before that, we were definitely, I don't know, I think it was like 35, maybe 36, if I recall. So it was a pretty big reduction in our actual monthly payment.
22:17Ashley Kehr:So you recouped that money in the same like last two years. Easily, easily, easily, easily. And we locked in this 30 year fixed 3 % rate. Well, really, you didn't even have to pay it out of pocket. Yeah, right. So it was like a no brainer for us, you know. That's substantial. Yeah. I wish we were in that kind of market. Unfortunately, my numbers are not as impressive. Different times. Different times. Definitely different times. Yeah. Now, Danielle, let's go over the numbers of your house. What was the purchase price, your original loan balance? What did it appraise you? And what did you take actually at the refinance?
22:50Yes. My original purchase price, this was a year ago, roughly a year ago. It was December 25 or sorry, December. That is not a year ago. December 24. I originally bought it for 565 ,000 and it did actually appraise at the same value. It was again, only a year later. The loan amount before the refinance was 528 ,000 and it was 524 ,000 after that year. This is most of, you know, most of it has gone to interest versus principal. Most of my payments, unfortunately.
23:22Ashley Kehr:Which is so depressing to look at when you look at it. It's so sad. I paid off$4 ,000 in principal in a year. That's like one mortgage payment. Great. But hey, progress is progress. And I didn't pay most of this because of my first two rentals, probably more than half of this mortgage. So there's that. For the numbers, in terms of rates, the rate was initially 7.1, but I actually did have a 2-1 buy down. So the 2-1 buy-down being you're locking in that 7.1 rate, but for the first two years, you basically have a rate that is a point lower each year. So for example, year one was a 5.6 rate that I paid at that house.
24:06It was about, or at this house, it was about 3 ,400 a month that I was paying for the mortgage. And then year two, it was structured to be a 6.6, which would have been about, call it almost 3 ,800, a little bit under that for the mortgage. And then I would have been locked in for years three through 30 at that 7.1 interest rate, which would have been a little bit over 4 ,000 a month for the mortgage. So that's what it was. I basically locked in a 6.6 rate, but because I was only halfway through the 2.1 buy down, I'm currently paying at a 5.6 rate. right now. Oh, so they still honor the 2-1 even though you...
24:47Really? Wow. Yeah. So it's kind of cool. So it worked out where I am. Yeah. I'm right now paying about 3 ,500 a month. So pretty similar payment to what I was paying. Or sorry, now it's at a 6.6 because I am in your... Or no. Yep. No, 5.6 because they honored it. And then I locked in a 6.6 for a years through year 30. So they're, they're honoring being able to stay within that 2-1 buy down. I was just going to say, Danielle, I actually never knew that when you refinance it, if you were on a 2-1 buy down, that the new loan would be able to honor that original buy down. I've never heard of that before.
25:27So I just learned something new. So for all the rookies that are listening, that's a question to ask. If you did buy something and you're refinancing and you've got some sort of buy down, ask if they can honor that going into the new loan. Because imagine if you went from a 7.1 to like a 5.98, what we just saw today. And you still got that buy down. Now you're in the fours, which is crazy. Exactly. And that was kind of what made me want to do this, right? Is that they still honored that? Because in theory, if I'm in year two of the buy down, right? At a 6.6. So if they didn't honor that, I would just be kind of like, there wouldn't be a huge sort of upside because I could have saved another year of money, right?
26:04During that 2-1 buy down. So it made sense, right? Like for me, Um, but it is, you know, worth noting, I still paid a little bit up out of pocket, right? It just, in my situation makes sense. And if I get the chance to do another refinance, I probably will, right? Like if it's, if it makes sense at that time.
26:21Ashley Kehr:With the, with this, when you switch loans, did you stay with the same loan company? And is that part of why they honored it? That is another great question. Uh, no. So my lender, um, he was with a specific company and he actually switched companies, but he's still someone that I love working with. So now I have a loan that is with a different provider versus my other two loans. But realistically, at first, I'm very detail-oriented and sort of OCD where I'm like, I want them all in the same place. And I know that sounds like such a small, my new detail. No, trust me. That would be so nice. I have a couple of loans with Shellpoint and their dashboard is like, here's this loan, here's this loan, here's this loan.
27:03Ashley Kehr:I'm like, oh, if only all of my loans could be. And then, you know, one just got sold, of course, to somebody else. And now it's a new dashboard and stuff. Business idea for whoever wants to create that, right? Like some sort of consolidating platform where you can see all your loans and just access it through one platform and dashboard. That'd be great. But yeah, I just have basically two different loan providers now, but it's simple. I mean, it's the same. The dashboard is the same. It's just two different logins. Which seems minuscule, but it actually gets annoying. Well, Danielle, walk us through the actual process for the refinance.
27:41From the moment that you decided to, hey, I think I might want to refinance to actually sitting at the closing table. What were those steps in between? Yeah. So it was actually very simple and it really replicates buying a house. It replicates the loan process of just a normal purchase aside from it being one, a little bit more simple. Two, you just already kind of have experience. So I already had the documentation, the paperwork ready of what was needed. And three, I was actually able to close virtually, which I would assume you might be able to do that maybe with a regular loan as well. But with this, I was able to just have like a notary online and just be able to sign it and everything was done virtually.
28:24So it was much more simple, but realistically, it was a very similar process as buying a house in terms of like the paperwork that's needed. It takes a few weeks. You're working with your lender just to kind of get what's needed. But it was really simple. It's just basically providing a bunch of paperwork and making sure that you run through the numbers with your lender and you understand what you're committing to. And what kind of loan was it? Was it like a traditional conventional loan or some other type of super secret refinance weapon? I'm not that cool yet. I'm not that experienced. just a conventional.
28:56This was standard conventional.
28:59Ashley Kehr:Was it still your primary at the time that you got to do it, refinance it as a primary or did you have to refinance it as an investment loan? Yeah. So this luckily is my primary. Oh, okay. Okay. Yeah. That's a great point. Just to call out is that my first two properties, if I ever want to go refinance that, those would be investment loans or I don't know if that's the proper word for it, but having an investment loan means a little bit of a higher rate. Right. So like with my primary, that's another reason that I felt not at all pressured, but I felt like this was the right time to do it while I lived here, just to not even worry about the market.
29:37Don't really care if interest rates go up or down. Obviously we don't want them to go down, but if they don't, like, let me lock it in now. And that's what I mean by not caring what happens in the future. I don't want to time things while I'm living here since I potentially will move again. This isn't like my forever home necessarily, I wanted to just be able to do it now while I had that lower rate of it being a primary.
29:57Ashley Kehr:And then after that, you've got to get a HELOC before you move. So you have the HELOC on the property. Hey, get all those in place. Yes, you guys should. That's on my list. I'm actually going through a HELOC process right now on my primary and they don't even do like a true appraisal on the property. So just like a virtual kind of desk appraisal where they just you like a quick summation of what they think the value is. Was it the same process for the refinance or did they actually do a full appraisal? So what's interesting is originally they weren't going to have to do an appraisal. And it was, I don't remember the exact reason to be honest offhand.
30:34I just know my lender was like, we're good. We don't have to do one. We'll be able to get away with it probably just because it was so soon that I bought the property. And unfortunately that actually changed throughout the loan process. And so this is one thing worth noting. So because of the relationship I have with my lender, the appraisal would have cost, I think like 800 bucks or something. Like it's somewhere between five and a thousand bucks to do an appraisal that I would have had to pay out of pocket. And my lender ended up covering that cost just because originally I was presented with not having to do an appraisal.
31:05So that would have been slightly frustrating to be like, all right, hang on. I was told one thing. So he was great about just covering those costs for me, but we did end up needing one. And then what was the timeframe from like start to finish to actually get the refinance done? Was it a typical 30-day timeframe or was it maybe faster because it wasn't as involved of a loan? Great question. It was a little bit less. It was like three and a half weeks. So very similar to a normal timeframe, but faster by a few days.
31:31Ashley Kehr:Tony, for the HELOC, I've never actually gotten a HELOC on my primary residence, just investment properties. But what is the timeframe looking for that? Especially if they're doing just a desktop appraisal, I would assume that it would be an even shorter timeline. Let me, I'm going to tell you right now, because it's moving pretty quickly. I want to say, and I'm like looking up when I started that application with them. And I want to say that I started that maybe 10 days ago. And I've already got a conditional pre-approval. I'm like in the final stages of underwriting where there's Sasson Flex and final documentation.
32:11But it looks like potentially next week we should be at a point where we're closing. So we're talking start to finish like potentially less than three weeks, which is insane. I wasn't expecting it to move that quickly, but it is. Now, part of that I think too, is that I've been like just super on top of it. And much like you, Danielle, just being a real estate investor, you tend to have a lot of those things that they request just kind of like already dial up and saved in a folder that you can upload quickly. So I would get an email about like, hey, we need this. And I'd have it up to him like same day, right?
32:39So I think me really being on top of it has allowed it to move more quickly. But I mean, yeah, less than three weeks and we're able to tap into all the equity.
32:47Ashley Kehr:Are you using the same like bank or lender that you have your mortgage with for that property? No. I didn't know maybe like because they already have a lot of the information. No. Yeah. It's my bank where I have like my car loans with them. And, you know, they're just like a super easy to use credit union. And I just called them and was like, hey, what do you guys have? And it ends up working out great. What's your, did you get an introductory rate? I did. And it was like five point something. You know, you have to like put a certain amount on it to start with. but I'm like, yeah, I could probably swing that.
33:18And then it's like five something, I think for the first, however long. So it's pretty solid, you know? All right, guys, we're going to take a quick break. But while we're gone, if you have not yet, please subscribe to the Real Estate Rookie YouTube channel. So you can not only hear mine and Ashley's voices, but see our lovely faces. You can find us at Real Estate Rookie and we'll be right back afterward from our show sponsors. People love to call real estate passive income, which is interesting because most of the investors I know are very busy. Busy finding deals, busy managing teams, busy worrying they picked the wrong market.
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37:29And what are you intentionally doing differently this time as you go into your next deal? That's a great question. Just to be completely transparent, I am not looking for a deal right now. I'm on a little bit of a pause from buying my next property, though I love real estate and absolutely plan to buy more. But I think I'm just transitioning from co-living. I want to kind of take a pause on that and potentially get into multifamily in the future or something that is not co-living. And I love co-living. So don't get me wrong. Love it. It's been fantastic. Let me ask you, right? Like why shift away from that strategy if it's worked well for you?
38:08Not necessarily co-living in the sense of like co-living plus house hacking, but just strictly co-living. And the reason I ask is because, yeah, just renting by the room, because we actually have a lot of investors that we've interviewed who have leaned into that strategy. And I think about the Nossams in the Pacific Northwest who buy four bedrooms and turn them into eight bedrooms, right? Like there is, I think, a lot of momentum in that strategy. So what for you specifically is making you lean towards something else versus where you already have some experience? Yes, it's a personal decision, right?
38:38Like co-living is an amazing strategy. I absolutely make more cash flow, like objectively by renting by the room versus renting to a family. But I I think Tony, you touched on most of the reason that I think I'm going to make a switch is that it's becoming pretty saturated. A lot of people are in the market in this co-living, or a lot of people are doing this co-living strategy now. So it's getting to the point where it's a little bit saturated and really competitive on pricing to where you have to list rooms for a lot cheaper. So when I first, this is just a very basic example, but when I first listed my first property, I got about$950 per room.
39:16I, for that same house, am listing rooms for$850 or lower, between$850. So rent, I'm not saying rent has necessarily fully gone down as a whole in the Denver Metro, but specifically with house hacking, it's just really competitive, right? So rent is slightly reducing in multifamily and that pushes downward pressure on renting by the room to be a cheaper option. And then when you have more people doing that, you have to be more competitive in order to make your room stand out. So I think that's why I wouldn't necessarily want more, but I do continue or I do plan to continue maintaining my co-living properties as co-living strategies.
39:56I don't plan to convert those yet because the numbers would not make sense. The second thing to note on co-living is if you are not self-managing, it is more expensive to hire a property manager. So call it anywhere between what, like, is it 10 to 12 % maybe to hire a typical property manager called ballpark. It would be closer to that, like 15 to 18 % to do, or call it 15 to 16 or 17 I've seen on the high end to manage a property that is co-living. So I eventually would like to be hands-off. That is my next phase. My next version of Danielle is to be a little more hands-off with my properties.
40:37I've been so hands-on. I manage literally everything. So that is part of why I would want to not necessarily purchase more of those. I just, I think that that would either A, be more work for me, right? Or two, it would be more money taking out of my cashflow versus me just having a family in there and then having them pay utilities and having a property manager be a little bit cheaper. So that's at least my thought process.
41:07Ashley Kehr:I think there's a lesson in this story and is that you can build a strong foundation with something like you have with co-living, but then you also have to be flexible to pivot as the market changes, as your strategy changes. And I think that's exactly what you're doing. You know that this strategy has worked great for you, but it's also time to pivot and maybe even diversify diversify a different market, a different strategy, things like that. And that's such a great attribute to have is to recognizing when it is time to pivot and change your strategy into something else. But Danielle, before we wrap up here, you are self-managing.
41:47Ashley Kehr:You have a full-time job. What tools are you using to help you manage these properties? So I only use a couple tools at the moment, but they've been absolute lifesavers. I work or I use RentReady, right, to kind of work through all my property management needs in terms of managing tenants, running background checks, applications. My tenants pay rent through there. It's made it really, really simple for me. So love that tool. I also use Baseline, which is a newer tool. I just started using this actually. I hit the point where spreadsheets are just becoming complex and I now have a CPA and she does not like spreadsheets.
42:25You know, It's just something that it's like, all right, let's get a little more advanced here. Let's make this a little more professional. So basically, it's sort of like a banking tool where you can basically have a debit card for each of your houses to be able to transact and have everything be super organized for bookkeeping. So I personally only use those two tools right now. But it's been a total game changer because the organization is key. And I was 100 % working from a spreadsheet for the past three, over three years. So it's been really helpful to start feeling like, okay, I'm running a business.
42:58I'm not just doing a little side thing with one house. And it's mentally allowed me to be a little bit more hands-off. Like, of course, I'm still managing the property when things come up. But having systems, processes, tools that I'm using, it makes me feel like I'm running a business. So I think I've actually handled situations that occur with the houses in a more professional and business-minded manner because of using these tools, if that makes sense. So yeah, those have been great for me.
43:26Ashley Kehr:And Danielle and I both love Baselain and me specifically, their bookkeeping aspect. And if you are a pro member, you also get Baselain smart bookkeeping. So all you have to do is log in to your biggerpockets.com pro account and you have access to these features and so many more as a pro member. So you can go ahead and check this out at biggerpockets.com. Danielle, thank you so much for joining us today. Where can people reach out to you and find out more information? So feel free to reach out to me on LinkedIn. Just go ahead and look up my full name, Danielle Daly. You can also reach out to me on Instagram.
43:59It's Danielle F. Daly. D-A-L-Y. Feel free to reach out. I would love to connect if you're in the Denver metro area, but those are probably the best ways to reach out to me.
44:08Ashley Kehr:Well, thank you again for taking the time to join us and share your experience and also the refinance journey for yourself. I'm Ashley. He's Tony. And we'll see you guys on the next episode of Real Estate Rookie. Hey, rookies, if you're watching this, we want you to apply to be a guest on the Real Estate Rookie Podcast. That's right. Ashley and I are looking for amazing stories just like yours to be a part of our Real Estate Rookie Podcast. Now, look, you don't need to be an expert. You don't need to have done thousands of deals. Even if you've done one deal, your story could help inspire the next listener.
44:40Ashley Kehr:As a rookie investor, especially if you just got your first deal, it is all fresh in your minds and you are the best person to tell your story, give your experience on how you got it done to help someone else get their first deal. So head over to biggerpockets.com slash guest. If you want to be a part of our show, again, that's biggerpockets.com slash guest, and we'd love to have you on.
From the publisher
Is now a good time to refinance your mortgage? If you bought a rental property in the last few years, you may be watching mortgage rates and waiting for the next best opportunity to refinance. But how does the process work, how much does it cost, and when should you pull the trigger? Today’s guest will tell you everything you need to know!
Welcome back to the Real Estate Rookie podcast! Last time we spoke with Danielle Daly, she had just bought her very first rental property. Since then, she has added two more properties, used the house hacking strategy to “live for free,” and just recently refinanced one of her mortgages. In this episode, she walks us through her thought process and how she determined that now was the right time to lock in a lower rate.
But that’s not all. Danielle also shares the two biggest lessons she’s learned to date, her go-to tools and systems for self-managing rental properties, and why she’s pivoting to another investing strategy in 2026!
In This Episode We Cover
How (and when) to refinance your rental property (step by step)
How Danielle bought three rental properties in just three years
Must-have tools and systems for growing your real estate business
How much money you should have in cash reserves (per property!)
Why Danielle is pivoting away from the co-living strategy in 2026
And So Much More!
Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/rookie-699
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