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Turn Your Largest Liability into Your Largest Asset with House Hacking

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In this episode, Emily and her guest, Sam Hogan, explain how house hacking can benefit graduate students and early-career PhDs. House hacking is when you purchase a property, live in it, and rent out part of it. While not possible in every housing market, house hacking is within reach for many graduate students and certainly postdocs and PhD with Real Jobs. In the first part of the episode, Emily teaches some of the most salient concepts from The House Hacking Strategy by Craig Curelop. She also presents some real numbers from potential house hacks in college towns. In the second part of the episode, Emily interviews Sam Hogan, a senior loan officer at Prime Lending (Note: Sam now works at Movement Mortgage) who specializes in writing mortgages for graduate students and PhDs, especially those with fellowship income. Sam gives additional details about how an early-career PhD can qualify for a mortgage for a house hack.

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Links Mentioned in This Episode

grad student house hack

Teaser

00:00 Sam: The best example, which has happened I would say many times over, is in North Carolina. One student purchasing that, you know, the regular stipend amount of around $32,000 a year, he bought it at $200,000, put $10,000 down was still within his debt-income ratio. And when he started off the process, he did say he was going to house hack.

Introduction

00:28 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 8, Episode 4, and I have a different episode structure for you today. The entire episode is devoted to exploring house hacking, which is when you purchase a property, live in it, and rent out part of it. We’re going to focus on how house hacking can benefit graduate students and early-career PhDs, and how it is possible for more people than you might expect. In the first part of the episode, I teach some of the most salient concepts from The House Hacking Strategy by Craig Curelop. I also point to a few real examples of potential profitable house hacks that I looked up this week. In the second part of the episode, I interview Sam Hogan, a senior loan officer at Prime Lending (Note: Sam now works at Movement Mortgage) who specializes in writing mortgages for graduate students and PhDs, especially those with fellowship income.

01:26 Emily: Sam gives additional details about how an early-career PhD can qualify for a mortgage for a house hack. Sam has been featured on two previous episodes and is now an advertiser with Personal Finance for PhDs. Reading this book came at a great time for me, actually, as my husband and I are taking steps to buy our first home within the next few months. It’s given me a different perspective on real estate investing for sure and the value of your primary residence. I’m very excited to share this material with you. Our giveaway contest is actually for the book Sam and I read for this episode! In January 2021, I’m giving away one copy of The House Hacking Strategy by Craig Curelop (affiliate link—thanks for using!), which is the Personal Finance for PhDs Community Book Club selection for March 2021. Everyone who enters the contest during January will have a chance to win a copy of this book.

02:18 Emily: If you would like to enter the giveaway contest, please rate AND REVIEW this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at emily at PFforPhDs dot com. I’ll choose a winner at the end of January from all the entries. You can find full instructions at PFforPhDs.com/podcast. The podcast received a review this week from Emily B. The review reads: “This podcast has been so helpful to me as I apply to graduate school!! So many of these things aren’t talked about but Emily is great at explaining all of these concepts and interviewing people who have great advice.” Thank you to Emily B for this lovely review, and best of luck to you this spring! Without further ado, here’s my review of the concepts in The House Hacking Strategy.

Review of The House Hacking Strategy

03:08 Emily: The House Hacking Strategy by Craig Curelop (affiliate link—thanks for using) was published in 2019 through Bigger Pockets Publishing. Bigger Pockets is a popular online real estate investment community. House hacking, which I’ll define momentarily, is popular among this community, and Curelop presents a very enthusiastic and rosy picture of the strategy. For the duration of this episode, I want you to allow yourself to dream a little. I know and you know that house hacking is not possible or desirable for many graduate students and PhDs for a variety of reasons. But just for the next few minutes, I want you to suspend your doubts. We’ll come back to reality in a little bit and talk over some numbers. For the moment, instead of confirming for yourself all the reasons that you can’t house hack, ask yourself, “How and when might I be able to make this strategy work for me?” If you are convinced that you want to house hack, you may just find that a fire is lit underneath you and you can make it happen sooner than later.

04:07 Emily: In fact, I did some searching on Redfin and Craigslist and found three properties near three R1 universities that I think might be profitable house hacks for single graduate students. I’ll present those numbers after I go through some of the material from The House Hacking Strategy. I’m going to start my teaching in the same place that Curelop starts his book. I’ll read some quotes and summarize some paragraphs from pages 23 and 24, the start of Chapter 1. Quote “What is your largest expense? The majority of the United States population would not hesitate to reply with “housing.” Whether you are paying rent or paying down a mortgage alongside with taxes, insurance, maintenance, and all the other expenses associated with owning a home, your house is likely what you spend most of your money on each month.” End quote.

Definitions: Asset and Liability

04:54 Emily: Curelop then shares the definitions that Robert Kiyosaki uses in his books, which is that an asset is anything that puts money into your pocket every month, and a liability is anything that takes money from you every month. Under this definition, your home is a liability, whether you own or rent. Quote “Arguably, the biggest misconception that most Americans have is that their home is their largest asset. When, in fact, it is their largest liability. However, there are some exceptions. A few of them are exemplified at the conclusion of each chapter. You will read fellow house hackers’ stories in this book who have used strategies outlined here to turn what could be their largest liability into their largest asset. “They strategically designed their lifestyle so housing is not their largest expense. As a matter of fact, through the strategies I talk about in this book, they have completely eliminated housing as an expense and they make money from their living situations every single month. And yes, their lives look just like yours. From the outside, you would not think that they are any different because they have days jobs, errands to run, and families to care for.” End quote.

Turning Your Largest Liability Into Your Largest Asset

06:03 Emily: Turning your largest liability into your largest asset—that is an incredibly powerful idea. How do they do that? Let’s define house hacking. House hacking is when you buy a home, live in it, and rent out part of it. The classic house hack, according to this book, is buying a multifamily property (a duplex, triplex, or four-plex), living in one unit, and renting out the others. In that case, your tenants are your neighbors. Another variation of house hacking is to buy a single-family home and rent out the bedrooms that you do not occupy. In that case, your tenants are your roommates. There are all kinds of reasons that house hacking is powerful from a real estate investment standpoint, which The House Hacking Strategy covers very well. I’m taking a different approach, which is speaking to people who are not necessarily enamored with real estate investing, but rather want to find a way to reduce or eliminate their largest monthly expense: their rent or their mortgage payment.

07:01 Emily: Whenever I speak about frugality and reducing expenses, I ask that people first consider how they can reduce their housing expenses, even though accomplishing that can be difficult and expensive upfront. I’ve published through this podcast and highlighted in my seminars creative strategies such as serving as a resident advisor, living in subsidized or low-income housing, renting your home on AirBnB, and house hacking, although I haven’t used that term before. I published two full interviews with grad students who rent out rooms in their homes, which I’ve linked from the show notes, and some of my other guests have mentioned in passing that they use the strategy.

Benefits of a Successful House Hack

07:37 Emily: If you set up a profitable house hack, you will either: 1) Bring in enough rent to completely cover your mortgage and reserves, which is the money you need to put aside monthly for future home maintenance and vacancies, or 2) Bring in enough rent that your personal housing expense is less than what you would have paid in rent had you not house hacked. If you were to move out and rent your room, the total rent from the property would be more than the mortgage and reserves. A minimally successful house hack reduces your personal housing expense. A very successful house hack puts money in your pocket on a monthly basis. I believe house hacking is a hugely powerful strategy for PhD students and a great one for postdocs and other early-career PhDs. It’s accessible to many more early-career PhDs than those who currently pursue it.

08:26 Emily: I’m going to focus in this episode on single PhD students and their numbers since they are the most difficult case. If you have a postdoc income or Real Job income, getting into a house hack will be easier, and likewise if you have two incomes to work with instead of one. I want to throw in a word of caution that this episode is just a short summary of part of a book that is not super in-depth either. So while I want to encourage you to look into this strategy, you must do your due diligence in your local market before taking the step to actually buy a home.

Why is House Hacking a Great Fit for Grad Students?

08:59 Emily: So why is house hacking a great fit for graduate students? First, a traditional grad student fits perfectly into the ideal demographic of house hackers: people without children who are willing to live with other people. That’s not to say that you can’t house hack if you do have children, but it might look different for you. Second, a grad student basically by definition lives near a university, which boasts a large pool of potential tenants. I think it would be straightforward to set up a house hack where all your tenants are fellow grad students, the way Dr. Matt Hotze from Season 3 Episode 3 did. Third, grad students have limited avenues for increasing their incomes. Yes, it is possible and you should do what you can within the rules of your visa, department, funding, etc. House hacking is a way to increase your income without violating the letter or spirit of any of the restrictions placed on you and will almost certainly take less time than a side hustle for what you earn.

Curelop’s Five House Hacking Strategies

09:56 Emily: Curelop presents five house hacking strategies. On one side of the spectrum, you have the strategy that necessitates the smallest lifestyle change but is also the least profitable. On the other side of the spectrum, you have the strategy that is the most profitable, but that also necessitates the largest lifestyle change. From least profitable to most profitable, the strategies are: 1. Rent out an accessory dwelling unit on your property 2. Purchase a multi-unit property and renting out the units you do not occupy 3. Purchase a home and rent out the rooms you do not occupy 4. Rent out your own bedroom and sleep in your living room 5. Rent out your whole residence and live in a trailer or RV in your driveway If you’re like me, strategies 4 and 5 do not sound very appealing! I’m going to focus on strategy 3 in this episode, but it’s perfectly fine if another strategy is the best fit for you.

House Hacking: Ongoing Costs

10:56 Emily: Let’s talk more about both sides of the house hacking ledger now, first your ongoing costs and then how you make money. On the costs side, every month you need to make your mortgage payment, which consists of principal paydown of your loan, interest, property tax, homeowner’s insurance, and probably private mortgage insurance or PMI. You might also have a homeowner’s association payment. Another cost, which is irregular, is the cost of maintenance and repairs on the home and also renovation if you choose to do that. Curelop recommends putting aside every month a few hundred dollars—what he calls reserves—for home repairs and also to help you make your mortgage payment when you are between tenants. He also says you should have $10,000 at a minimum in your reserves to start with. If you don’t have $10,000 yet, he suggests securing access to a line of credit in case something comes up that you can’t cover with your existing reserves.

House Hacking: Net Worth Increases

11:41 Emily: That covers the ongoing costs of operating your house hack. I’ll get to the up-front costs a little later. Now for the exciting part: how your net worth increases while you house hack. First and most importantly, you will collect rent from your tenants. As I said earlier, this rent should either completely cover your mortgage payment and reserves or at least reduce your personal housing expense. Second, each month as you make your mortgage payments, you will pay down the principal balance of your loan. Now, in the first few years after you take out the loan, only a very small fraction of your payment goes to principal due to the amortization schedule; the great majority goes to interest, tax, insurance, etc. So principal paydown is a relatively small factor early on in the mortgage. Third, your home is likely to appreciate in value over time. When you sell, it will probably be worth more than what you bought it for. Appreciation comes in two forms, natural and forced.

Natural and Forced Appreciation

12:48 Emily: Natural appreciation is the general increase in real estate prices over time. According to Curelop, historically real estate has appreciated 6% per year on average across the US. Now, as we all remember from the housing crisis, different real estate markets do appreciate at different rates, and depreciation is also possible if you get really unlucky with your timing. So while natural appreciation is likely to be in effect over the long term, you can’t count on it over the short term. Forced appreciation is when you do something to a property to increase its value, such as finishing a basement to add bedrooms and a bathroom. You of course have much more control over forced appreciation than natural appreciation. If you choose your renovation judiciously, you can increase the value of your property by more than what you spent. Appreciation can rival rent collection as the most positive factor in increasing your net worth through house hacking, but it’s only realized when you sell the home. Fourth, there are tax benefits to rental real estate. Curelop doesn’t go into much detail on this in the book and I’m not familiar with them so I won’t elaborate either, but this is another way that your house hack is less costly to you than owning a home that you don’t rent out.

Seven Common Objections to House Hacking

14:00 Emily: I hope the financial advantages of house hacking have sufficiently excited you about the idea. Curelop also presents and then counters seven common objections to house hacking. I’ll list all seven, but only go into the arguments against a few of them. Just know that if the others are hurdles for you, he does address them in the book. 1. House hacking is more work than renting. 2. When you house hack, you will share space with other people. 3. You need to keep a professional relationship with your tenants. 4. You have to live in an investment property, which might not be as nice of a location as you could afford. 5. The housing market could tank. 6. You have to put more money down to house hack than your up-front rental costs. 7. Your tenants might fail to pay you. My overall observation of this list is that these objections are all valid. They all have at least a kernel of truth or a possibility of occurring. I think it would be really helpful to identify every adverse event that could occur and come up with a plan for how you would respond. Going through that exercise might make you feel better about moving forward with house hacking instead of just being generally nervous about the downside risk.

Counterpoints to Some Common Objections to House Hacking

15:11 Emily: I want to add some thoughts to a few of the aforementioned objections. 2. “When you house hack, you will share space with other people.” Having roommates is pretty standard in graduate school for single people. Even if you could afford to rent a place on your own, it wouldn’t be strange to choose to have roommates instead. I’ve also known plenty of PhDs who continue to live with roommates even after they couple up or get married. I think this is less of an objection for our population than others, at least up until the point that you have children. 3. “You need to keep a professional relationship with your tenants.” and 7. “Your tenants might fail to pay you.” My fantasy house hack for a graduate student is to rent to other grad student peers and to be friends or at least friendly with your tenants. It is important to maintain professionalism at least within the bounds of your landlord-tenant relationship. You should be a great landlord, responsive and fair. I hope your tenants will respond in kind and not try to take advantage of your personal relationship. Curelop devotes a whole chapter to screening tenants, which as a new landlord I think you should follow to the letter. Of course, this book was published prior to 2020. The possibility of tenants not paying and not being able to evict them probably didn’t occur to many landlords, but now it’s on everyone’s radar. As a house hacker, you should make sure that you are financially capable of paying the mortgage even if your tenants are unable to pay rent for an extended period of time. If your university offers funding guarantees, I think that’s worth asking about on a rental application. You can’t prevent a tenant from misusing their money to the extent that they are unable to pay rent, but you can make sure that their income is reliable.

Four Considerations to Purchasing a House Hack

16:56 Emily: What does it take, financially, to purchase a house hack? Is it feasible where you live now? Let’s consider four elements. 1. The cost of properties appropriate for house hacking 2. The price to rent a room 3. Your stipend or salary 4. Your savings First, how expensive of a home could you buy on your income or your household’s income? Interest rates are so low now that rules of thumb like “Your mortgage shouldn’t exceed three times your income” have become outdated. Really, I’m asking two different questions here: 1) How large of a mortgage will you qualify for? and 2) How much of a mortgage would you feel comfortable taking out? Some house hackers will take out the largest mortgage they qualify for because they are counting on rental income to help pay it, but you might be more conservative, as I discussed before.

17:48 Emily: I’m going to talk this over with Sam Hogan a bit more in the second half of this episode. According to what he told us in our last interview, Season 5 Episode 17, if an applicant has no debt and excellent credit, they could qualify for a mortgage of four to five times their yearly income. If you have debt or merely good credit, the multiple will be smaller. Now, whether taking out that much debt is prudent is up to you. If you weren’t house hacking, I would say no, but if you are, it depends on your risk tolerance. Now you have a ballpark idea of the size of mortgage you could take out. You of course need to work with a mortgage originator like Sam to calculate your exact number. But going forward with the ballpark number, are homes available for less than or around that mortgage amount? Or is it way too low to buy anything? You can use a site like Redfin or Zillow to figure out what a house hack would cost you. If you’re looking for a townhouse or single-family home to house hack, perhaps you would look for a 2 bedroom place at a minimum. Broadly speaking, the more bedrooms you can purchase, the more rental income you’ll be able to generate.

Consider Cost-of-Living

18:56 Emily: If you live in a high cost of living area and you’re trying to purchase a home with one grad student income, you are likely to find that everything is out of reach. It’s disappointing, but don’t give up on the idea of house hacking for later in life. If you find that you can maybe afford to buy something, the next question is whether a house hack, in particular, is viable. Can you rent out the bedrooms that you won’t occupy for enough to at least reduce if not eliminate your housing cost? The answer is not an automatic yes for the type of home you can afford. If you’re not familiar with rental prices by the room in your area, check Craigslist and Facebook Marketplace. Having verified that house hacking is viable on your income and in your rental market, we come to the last piece of the puzzle, which is the down payment and closing costs. In the interview with Sam coming up next, we discuss the down payment requirements of various mortgage programs. If you’re not a veteran, you’re looking at 3% at minimum, but Sam suggests up to 10% in some cases. So for a low-cost property, the down payment could be as little as a few thousand dollars.

Five-Year Rule of Thumb

20:02 Emily: Curelop states in the book that closing costs are typically paid by the seller, not the buyer, so the money the buyer has to come to the table with above the down payment is rather minimal, perhaps a few hundred or a thousand dollars. Even if you don’t have the savings required to fund a home purchase in your bank account right now, how quickly could you come up with the money if a fire were lit underneath you? Over the course of a year, a vigorous side hustle, a higher-paying fellowship, or a summer internship could do the trick. Since I mentioned a year, I want to address the five-year rule of thumb. I know that many grad students and postdocs feel a ticking clock when it comes to considering real estate purchases. Many of us expect to move with every new career stage we attain. The five-year rule of thumb implies that you may not even break even if you buy a home instead of renting during grad school or your postdoc because of the high transaction costs that come with buying and selling and that you can’t count on natural appreciation over short time frames.

21:00 Emily: What I found interesting about The House Hacking Strategy is that it concentrates on the return on investment that can be achieved within one year. The reason for the focus on that timeline is that owner-occupancy mortgage loans require you to live in the property for one year. An aggressive house hacker might move every year to a new house hack, collecting rental real estate along the way instead of selling. The point that I want you to take from this is that you don’t have to listen to rules of thumb or rely on appreciation to overcome the transaction costs of real estate. Instead, you can use the rental income from your tenants. A house hack might be viable for you even if you plan to remain in your current city for only a couple of years—you just have to look at the numbers. Also, it’s important to plan your exit before you purchase your house hack. Are you open to turning it into a fully rented property after you move? Do the numbers still work if you have to hire a property management company? Or if you are sure that you will sell, you need to account for the high closing costs in your calculations.

Thought Exercise: Three Example House Hacks

22:02 Emily: Now let’s get into those numbers I mentioned earlier! As a quick exercise, I looked at the list of universities I’ve given or am scheduled to give webinars for in the 2020-2021 academic year to see whether house hacking was viable in those cities and what the numbers might be. Here was my process: 1) I searched Redfin for the university’s city with a max asking price of $150,000. I typically set a 3 bedroom search minimum, but sometimes adjusted up to four or down to two. I picked a house within a few miles of the university, something that looked move-in ready and not the cheapest available. 2) I searched craigslist for the area the house was in to get an idea of rental prices by the room and picked a price in the middle to low end of what I saw. 3) I went back to Redfin to look at the estimated mortgage payment. I set that the buyer would put 5% down and get a 3% interest rate.

23:03 Emily: I’m now going to share with you the properties and numbers I found in three of the cities I looked at. Of course, this was a cursory search, so my selections and numbers might be off due to a lack of local insight. Just consider this a ballpark estimate. Also, please note that I’m doing this exercise in January 2021, and both the renting and buying markets are really weird right now due to the pandemic and it being outside of the high home buying season. If you do this search even just a couple of months from now, it might look totally different, let alone a couple of years.

23:39 Emily: Example #1 is in East Lansing, Michigan, near Michigan State University. The property I picked is a 3 bedroom, 2 bath, 1500 square foot single family home, and the asking price is $89,900. A 5% down payment is $4,495, and the monthly mortgage payment would be $752. I picked $400 per month as the rental price per room. That means that renting out two of the bedrooms covers the mortgage payment while you live in the third. After setting aside a couple hundred dollars per month for reserves, you have reduced your own housing cost by about $200 per month. Over the course of one year, assuming that your irregular expenses did not exceed your reserves, you would have reduced your own housing expense by $2,400. Over five years, that turns into reducing your own housing expense by $12,000, and that’s without taking into account possible rent increases.

24:43 Emily: Example #2 is in Louisville, Kentucky, near the University of Louisville. The property I picked is a 4 bedroom, 2 bath, 1300 square foot single-family home, and the asking price is $134,000. A 5% down payment is $6,700, and the monthly mortgage payment would be $777. I picked $500 per month as the rental price per room. That means that renting out two of the bedrooms covers the mortgage payment and perhaps all of the reserves. You would live for free in the third bedroom and pocket the $500/month rent from the fourth bedroom. Over the course of one year, assuming that your irregular expenses did not exceed your reserves, you would have taken in $6,000 in rent above your mortgage payment and reduced your own housing expense by $6,000. Over five years, that turns into $30,000 in rent collected and reducing your own housing expense by $30,000, and that’s without taking into account possible rent increases.

25:48 Emily: Example #3 is just outside St. Louis, Missouri, near the Washington University in St. Louis. The property I picked is a 4 bedroom, 2 bath, 1800 square foot single-family home, and the asking price is $150,000. A 5% down payment is $7,500, and the monthly mortgage payment would be $925. I picked $600 per month as the rental price per room. That means that renting out two of the bedrooms covers the mortgage payment and perhaps all of the reserves. You would live for free in the third bedroom and pocket the $600/month rent from the fourth bedroom. Over the course of one year, assuming that your irregular expenses did not exceed your reserves, you would have taken in $7,200 in rent above your mortgage payment and reduced your own housing expense by $7,200. Over five years, that turns into $36,000 in rent collected and reducing your own housing expense by $36,000, and that’s without taking into account possible rent increases.

26:53 Emily: Now, if those numbers don’t motivate some of you in low- to medium-cost of living areas, I don’t know what will! You can literally buy an income stream that will benefit you to the tune of thousands or over ten thousand dollars per year for a few thousand dollars, an extra hour here or there, and the willingness to take a risk. And that’s not even counting the principal paydown, tax benefits, and potential appreciation! Keep in mind that all of my examples are completely made up. I’m just trying to ballpark some numbers and show that this is possible in some places on one grad student’s income. Curelop publishes the numbers of a real house hacker at the end of each chapter. For transparency, I didn’t examine every city on my list of candidates. I skipped the California ones, I only briefly glanced at Austin, Texas and Boston, Massachusetts to verify that $150,000 won’t buy you anything near the universities right now. I went down a road a bit in Providence, Rhode Island before crossing it off my list. But I thought these three examples were good ones. Purchasing may very well be possible in those other markets if you have more than a single grad student stipend to work with, or perhaps at a time of year when there is higher volume on the market. After the commercial break, I’ll be back with my interview with Sam Hogan.

Commercial

28:15 Emily: Emily here for a brief interlude. If you know that you want support in accomplishing a big financial goal this spring, I recommend my group coaching program, The Wealthy PhD. You and I will meet one-on-one to identify and plot a course toward your big financial goal. Past participants have opened IRAs, set up systems of targeted savings, started budgeting, systematically implemented frugal tactics, and more. Every week for eight weeks, you’ll participate in a small accountability group that I facilitate. The group will help keep you on track to meet small weekly goals that add up to your big goal. Prospective grad students, this would be a perfect cycle to join as I and the other participants can give you a ton of support and financial insight as you interview and ultimately choose your PhD program. The deadline for discounted early bird registration for The Wealthy PhD is Saturday, January 30th, 2021. Visit pfforphds.com/wealthyPhD to learn more and register today. Now, back to our interview.

Welcome Back, Sam! How Can People Find You?

29:26 Emily: I am delighted to have joining me on the podcast today my brother, Sam Hogan. Sam is a Senior Loan Officer at Prime Lending (Note: Sam now works at Movement Mortgage), and we’ve been having conversations over the last several years about how grad students and postdocs, especially, can get mortgages when their income is maybe it’s fellowship instead of employee. Maybe it’s temporary instead of a long-term thing. We’ve had these conversations before. So if you’re, you know, liking what you hear today from Sam, please go back and listen to season two, episode five, that’s a two-part interview. The first part is with a person who actually house hacked, Jonathan Sun. And then the second part of the interview is with Sam. And then Sam was also back in season five, episode 17, where we talked a lot more about this issue of fellowships and being able to qualify for a mortgage with fellowship income. So Sam’s back today to talk about house hacking. I gave him an assignment. I told him to read The House Hacking Strategy by Craig Curelop along with me so that we could have a conversation about it and get his perspective as a loan officer. So Sam, welcome back to the podcast.

30:32 Sam: Thank you for having me happy to be here.

30:34 Emily: Can you upfront say your contact information, everything for the audience?

30:38 Sam: Yep. My cell phone is (540) 478-5803. And then my email is sam.hogan@movement.com.

What Did You Think About the Book?

30:48 Emily: Yeah. And you’ve been getting a lot of referrals. A lot of people have been finding you through the podcast episodes you’ve done before. Graduate students and post-docs and early-career PhDs. So we’ll talk about a few of those sort of case studies in a little bit, but first I just wanted to get your general impressions about the book on house hacking. I know that you are not a house hacker, although you are a landlord, but yeah, just what did you think about this book and this idea generally?

31:16 Sam: Very motivational. Definitely on the aggressive side of house hacking, giving suggestions, like living in a trailer in your driveway. Not something I would do personally, but it’s a step in the right direction. I mean, people need to know that it’s okay to live in a house for just one year and then buy another property the following year. So I liked it a lot. There were some accuracy things that I would’ve changed just regarding loan approval, but the loan guidelines and laws we have to stay within, they change annually. So there are always little tweaks and adjustments, especially 2020 was a funky year. So they made some higher credit score requirements and things like that. Generally speaking.

Did it Make You Want to Try House Hacking?

32:01 Emily: I think that’s a really good way of approaching this book. I do see it more of like a motivational book and like an overview, but maybe not once you drill down into the specifics, like, yeah, it might not be accurate year to year because things do change. The book was published in 2019, but as you said, 2020 kind of upended, a lot of things we’re recording this interview in January, 2021. So yeah, I totally agree about the book. And did it make you want to try house hacking?

32:27 Sam: It did. And then they also made me reflect on what I had when I was still living in a one-bedroom, one bathroom, how I actually rented out the common area to a buddy who needed a place to live.

32:39 Emily: Oh yeah, because you were house hacking for a little while. I forgot about that. Because your place was only a one-bedroom, but you did have a tenant.

32:46 Sam: Yeah, he was just switching jobs. He’s also in finance. And yeah, he ended up just bunking with me. And I think it was only like $4,000 for the year, but Hey, I mean that’s $4,000 I didn’t have to start out with.

Real Example of Potential for House Hacking

33:03 Emily: Yeah, definitely. And before this point in the interview, I’ll have told the listeners a lot of the principles from the book. So we don’t have to go through all of those in detail, but I wanted to really get from your unique perspective, some ideas about how a graduate student or how someone on a lower income can actually make this house hacking strategy work. Of course it will not work in every housing market. We know that. The incomes for graduate students and postdocs are too low to make it work in high cost-of-living areas. But there is a chance of it working in lower cost-of-living areas even on one income. But especially if you did have two incomes or if maybe instead of a graduate student or a post-doc, you know, there are some different situations where this does work out. So I wanted to get from you, you know, from all the clients that you’ve worked with a few examples of people who either were planning on house hacking, and you knew that at the time you were making the loan or who bought a large enough place that they could house hack if they wanted to. So can you talk us through a couple of those examples?

34:03 Sam: Yeah. So I mean the best example which has happened, I would say many times over, is in North Carolina. One student purchasing that, you know, the regular stipend amount of around $32,000 a year. I actually just looked up the property it had appreciated. He bought it at 200,000, put 10,000 down, was still within his debt-income ratio. He closed in April last year, and when he started off the process, he did say he was going to house hack. When I followed up with him a few months after closing, he didn’t end up renting out any rooms. He enjoyed having those extra spaces. So I’ll probably check up with him in the spring and see if he had changed his mind. But, I mean, it was a four-bedroom place, so he definitely had the ability to do it, but then just didn’t execute after closing because I guess he was comfortable with the payment enough.

35:02 Emily: I do want to emphasize that whenever you’re planning a house hack, it’s really vital to be confident that you could make the mortgage payment without any rent coming in. Maybe in the case like this person, you just decided not to rent out the rooms, ultimately your life circumstances change, or you want your privacy or whatever. Or it could be that, Hey, maybe you have a tenant, but that tenant is not paying you. And that’s happened a lot in 2020. It’s really a difficult situation to resolve for everyone. And so you need to be sure that, you know, if you scrimp and save and you reduce your other expenses, you would be able to make that mortgage payment still. So the example that you just spoke about and you said this has happened multiple times in North Carolina. I know that you’ve been working with a lot of graduate students in the Triangle, at UNC and at Duke, NC State, to make these loans happen in that area.

Loan Qualifications for a ~$32K/year Stipend

35:49 Emily: So let’s just take that market for example. So what size of a mortgage could a graduate student, let’s say, possibly take out? Like, I guess what I’m asking is, you know, they’re looking at their stipend, someone who isn’t ready to approach someone like you, a loan officer yet, but they’re looking at their stipend, they’re making 30 or $32,000. Like you said if everything were ideal in the rest of their finances, like let’s say they’re debt-free and they have a great credit score. How large of a loan could that person qualify for? Because that’s really kind of the question here is, are you going to be able to qualify for a large enough loan to make house hacking a possibility in your housing market?

36:27 Sam: So the highest I’ve been able to approve without a co-signer is 220,000. That was also in the Research Triangle.

36:37 Emily: So $220,000 on about a 30, $32,000 kind of stipend.

36:41 Sam: $32,000, this student did not have any student loans that were deferred. She was pretty much debt-free except for a few credit cards.

36:51 Emily: Okay. So pretty, really, really good solid portfolio otherwise. So just for the listeners, like house hacking could still be possible if you have those other kinds of debt, you’re just going to qualify for a little less. So it just has to work in your housing market.

37:04 Sam: Right. I mean, it’s important to understand that, like, even though you might have a similar situation to somebody else, it’s never exactly the same. So you want to have someone pull your credit, look at your entire financial picture in order to give you the results catered to your ability to purchase. You don’t want to just assume you’re going to fall into a bucket and everything will be okay. Because there are some very important details that go into this approval and those have to be evaluated by an expert. There’s just some things you can evaluate on your own, especially things like mortgage insurance, what will be allowable for your down payment, you know, in order to make your ratios work and make sure you’re within the guidelines.

37:49 Emily: So I think what I would encourage the listeners to do, if they are enthusiastic about this idea of house hacking but they’re not sure if they’re going to make it work is look really high level at what is your income and then what are houses, at least probably a two-bedroom home of some kind, selling for in your area. And if you’re within like striking distance of like, maybe I could get a loan, possibly, I’m not sure, for enough to make this work. That’s the time to approach someone like you that is to say, to approach you because you’re the expert in this subject and ask, well, how much can I be approved for? And then figure out whether or not there are houses in your area that would help you make this strategy work.

Different Types of Loans Available in the Marketplace

38:27 Emily: So let’s talk about the down payment for a moment because you just brought that up and we’d actually, didn’t talk about this much in our last episode. And it’s an important factor to consider. I would the two big hurdles for especially graduate students to buy homes are: one, qualifying for a big enough mortgage on their low income, and two, having enough of a down payment. So would you just really quickly run through the different types of loans that there are available in the marketplace and how much of a down payment is required for each of them?

Sam (38:55): Yeah. So some of your most popular loans, FHA loans and conventional loans. FHA a classic first-time home buyer basically program. It’s insured by the Federal Housing Administration, and the down-payment is three and a half percent. So they make it very achievable. There’s some employment and income that’s not accepted for FHA. So you want to check with your lender. And then when we get over to the good stuff, the conventional loans, taken out, allow you to go as little as 3% down and that can come from a gift from a family member or a friend. It doesn’t have to be your own verified funds. More commonly, Epic FHA loans are not a good fit for fellowship income, but if you have regular W2 income or some other employment, maybe a second job you’ve had for a year or two, this is also a good option.

39:45 Sam: Now if you have excellent credit, you’re going to want to get into the conventional loan bucket because it’s going to have lower mortgage insurance. It allows as little as 3% down. When we’re thinking about stipend income at $32,000 a year, you going to want to lean towards 5%–or 10%–down to make your ratios work. This is all going to depend on working with, you know, someone you trust so they can evaluate your personal qualifications. Okay. But outside of those two popular loan products, we have VA loans. So if you’re a veteran and you’re back in school, VA loans are a piece of cake. They require no down payment. There’s no mortgage insurance. There are a lot of good other good benefits. Like the VA loan can be assumed by another person and take over that low rate that you’ve already established.

40:39 Emily: Yeah. Thank you for explaining that. So we’re talking about 3% down, as little as 3% down for conventional, although you’re recommending five or 10% as maybe a better fit, depending on the person. FHA loans, three and a half percent down. VA loans, 0% down. So the kind of range of downpayment costs that we’re talking about are, it sounds like, okay, let’s say on a $150,000 property, that would be like four and a half thousand dollars at 3%, up to $15,000, if you were putting down 10%. So kind of somewhere in that range is what we’re talking about as a minimum down payment. I don’t know, in one sense, it’s a lot of money for a graduate student to come up with that. That’s a pretty, you know, it’s a good chunk of a year’s salary. However, if the outcome is getting you into a house that cashflows you every month, or at least reduces your housing expense every month, in the long-term, it’s a small amount of money. It can be a larger amount of money to come up with in the moment. And you just mentioned for conventional loans, it is acceptable for someone like a parent, perhaps, to gift you the down payment.

41:44 Sam: This is very common.

41:48 Emily: And I was of course, very impressed by, you know, the case studies that were in the house hacking strategy of people making back their entire initial investment and more, you know, within the first year of owning their house hack, that is the down payment money. Plus maybe they put in some renovation funds. It was some really, really inspiring case studies. And of course you have to take everything with a grain of salt because the author is going to be picking the absolute best to include in the book, run the numbers in your own situation. But I mean, as you just said, compared to renting, which is a pure drain on your net worth, you have a really good chance of, you know, actually coming out ahead with house hacking–with buying, but like house hacking makes it even more sure. You know, that you’re going to come out ahead when you have that rental income coming in.

42:33 Sam: Yeah. And I do want to say the examples he gives in this book, they are very good examples. I also feel like he’s kind of, double-dipping on some of the numbers sometimes because I mean, you’re not paying $8,000 down on your loan amount in your first year of ownership. You’re paying mostly interest. So I just felt like he was kind of double-dipping with, Oh, if I have this extra rental income and I have that, plus I’m using that to pay down my loan, you know, and then he’s making it motivational, I’ll say. But is that realistic at all markets? Definitely not.

Examples Outside of the Research Triangle

43:13 Emily: I wanted to get an idea of you of a few other housing markets that you’ve worked with grad students in. Maybe not specifically for house hacking, but just grad students who have been able to buy homes around other universities. Can you give us a few examples outside of the Research Triangle?

43:28 Sam: Yeah. I mean, I’ve had success in outside of Boston, Massachusetts, where you think it’s a high-cost area and then someone on a fellowship wouldn’t afford it. That has been successful. Outside of Denver, Colorado. We’ve also had some purchases there with a post-doc. Gosh, Miami, Florida, we even had someone purchase who was going to University of Miami. Atlanta, Georgia is popular. Emory University has a good funding letter, which I’ve helped a few students out down there. It’s really all over. I mean, we have from Texas to Rhode Island to Tennessee and Ohio.

44:11 Emily: Yeah. That gives us a good idea. Thank you. So I was actually surprised to hear some really big markets in that list where you’ve made this work. So yeah, I would say for a grad student or postdoc, whoever who’s listening who is wondering about this strategy, just run some really high level numbers in your area. According to like what’s in the market right now and what your stipend is, and then yeah, if you think you’re within striking distance, like reach out to Sam, reach out to a few lenders and see if they can make the numbers work for you.

44:38 Sam: Yeah. I just want to put the emphasis on like, if you feel like you’re well-qualified, like you know you don’t have $200,000 in student loans. You know income’s going to continue for years plus, just reach out to myself or someone on my team because there’s very often a personal touch that we have for this community. I work with some students that have been denied by two other lenders. But they’re already in contract and you know, I’m two weeks late on working with them. So just in respect to your own time and maybe these other lenders that aren’t familiar, you know, we work a lot with the PhD community. I mean, we’re doing at least five plus deals a month right now, all over the country.

Correcting the Record: Credit Scores

45:27 Emily: Was there anything else about the book that you wanted to kind of correct the record on?

45:33 Sam: Yeah. I mean, there are a few things regarding credit score that changed in 2020, after this book was written. So last spring, when everything with COVID-19 was restricting some lenders, they upped credit score requirements. So a lot of FHA loans, you can’t really apply for them unless you’re over 640. And for conventional loans, no lenders typically go down to 620. There’s a breaking point. It’s at 660. So if your FICO score, if your middle FICO score is above 660, it’s going to be cheaper for you to go conventional monthly. The mortgage insurance is lower. Now, if your middle FICO score is below 660, it’s going to be cheaper for you to go FHA. That’s just a rule of thumb that all lenders use. When we price out everything and when we compare monthly payments, that’s the breaking point.

46:27 Sam: So if you’re at 661, I’m going to put you in a conventional loan. You’re at 660 or 659, FHA is for you. It does mention in the book, how, if you’re in an FHA loan, you will have to refinance into a conventional loan. This is a very common thing. Everybody does it. It reduces your mortgage insurance and also allows your mortgage insurance to drop off at 78% of equity. Okay. But everything else was looking really good. He had some very clear things to say for these first-time home buyers or house hackers. I would just suggest everyone to get better results. You should work with a loan officer, either myself or someone who’s also a senior loan officer who has a few years experience, so they can make something cater to your needs. But generally speaking, it was a great read. Very aggressive when he starts talking about, you know, living in a tent in the backyard and renting out every room in your three bedroom.

47:29 Emily: That strategy also was a little too much for me. And I think, you know, when I’m presenting this to my audience, it’s more about what can you make work over the course of five years? Not necessarily over the course of like one year. The book is very focused on one year and you know, there’s reasons for that from a real estate investing strategy, why that’s the case. But I think for the people who are listening to me, they’re more likely to want to stay in a place for a few years and have their own bedroom during that time.

47:58 Sam: Exactly, exactly.

Would You Please Give Your Contact Info Again?

47:58 Emily: Okay. Sam, thank you so much for this interview. Great information. I really hope we’ve gotten some people excited about house hacking, about buying homes, making it seem like a possibility earlier, even during graduate school. I know that I wish that I had seriously considered this or known about this concept when I was in graduate school. So as we close out, will you please give your contact information again?

48:19 Sam: Yeah. Thank you for having me again. The best way to reach me is by phone. It’s (540) 478-5803. My best e-mail is my work e-mail. It’s sam.hogan@movement.com.

48:34 Emily: Wonderful. Sam, thank you so much for joining me.

48:37 Sam: Of course. Thank you for having me.

Concluding Thoughts About House Hacking

48:39 Emily: I’m back with a few concluding thoughts. I fervently wish I had learned about the power of house hacking earlier in my life. I did my PhD at Duke between 2008 and 2014. I knew several fellow grad students who were house hacking, though I didn’t know the term at the time. So it was possible to make the numbers work. My husband and I together definitely could have purchased a home in 2010, the year we got married, based on our two stipends and our existing savings. However, I was still psychologically scarred from watching the housing market crash and there was a lot of talk about rigorous lending standards. We thought that we would leave Durham in 2013 perhaps, so following the five-year rule we did not pursue homeownership. We didn’t end up moving away from Durham until 2015. So in retrospect, house hacking was possible and almost certainly highly profitable, and we lived there long enough that either selling or keeping the home as a rental would have been viable options.

49:38 Emily: All that is water under the bridge for me, of course. What I can do now that I have learned about this strategy is two things: 1) I can consider how I can house hack in my present life. My husband and I are planning to buy our first home in the near future. We do want a detached single-family home but could consider adding an accessory dwelling unit. If that turns out to be impractical, perhaps we could house hack during a sabbatical year in another area of the country or once our kids are grown. 2) I can share this strategy as widely as possible, as I’m doing in this episode, and support anyone in my audience who wants to investigate or pursue house hacking. A perfect place to talk over these ideas as you pursue them is inside the Personal Finance for PhDs Community. In fact, we have one member already who is planning a house hack in the next few months! The House Hacking Strategy by Craig Curelop is our monthly Book Club selection for March 2021. So jump into the Community at PFforPhDs.community and we will discuss house hacking!

50:39 Emily: I want to continue this conversation not just in the Community but also on this podcast. If you are a grad student or PhD who is currently house hacking or has done so in the past, please get in touch with me. I’d love to publish a compilation podcast episode with several real case studies. If you’d like to volunteer, even anonymously, you can reach me at emily@PFforPhDs.com.

Listener Q&A: Do I Report My Stimulus Checks?

51:07 Emily: Now, on to the other one of our two new segments, the listener question and answer. Today’s question comes from a grad student in my annual tax return workshop, How to Complete Your Grad Student Tax Return and Understand It Too. Here’s the question: Do I report my stimulus checks as part of my gross income? This question has a really short answer, which is no. Your stimulus checks, or your economic impact payments as the IRS calls them, do not have any effect on your tax return unless you did not receive one when you were supposed to. I’m going to read from an IRS newsroom release from last spring titled, What People Really Want to Know About Economic Impact Payments. And I’ll link to this page from the show notes. Quote, “Is this payment considered taxable income? No, the payment is not income and taxpayers will not owe tax on it. The payment will not reduce a taxpayer’s refund or increase the amount they owe when they file their 2020 tax return next year. A payment will also not affect income for purposes of determining eligibility for federal government assistance or benefit programs.” End quote. So there you have it. Super straightforward.

53:18 Emily: The stimulus checks, the economic impact payments, are not taxable. Really the only catch, like I just mentioned, is if you were in fact eligible for these payments in 2020, but the IRS didn’t know that you were eligible and you didn’t receive the payments, then you will claim what’s called a recovery rebate credit on your tax return. So on form 1040 in line 30, you’re going to have a number in that line. It’s going to be an additional credit to you, which means you’ll get more of a refund than you were expecting essentially. Now, if you’re not sure if you’re eligible for the recovery rebate credit, there is a worksheet in the instructions for form 1040 called the recovery rebate credit worksheet. And you can fill out that worksheet and it’ll tell you exactly, you know, whether or not you were eligible and whether or not you can claim the recovery rebate credit. So thank you Aanonymous for that question.

53:18 Emily: By the way, if you’re interested in learning more about my tax workshop, How to Complete Your Grad Student Tax Return and Understand It Too, and potentially join it like this questioner did, you can go to PFforPhDs.com/taxworkshop to find more information. If you would like to submit a question to be answered in a future episode, please go to PFforPhDs.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours.

Outtro

53:48 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episode show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest and submitting a question for the Q and A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media with an email listserv or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in like investing, debt repayment, and taxes. Four, subscribe to my mailing list at PFforPhDs.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

This PhD’s Message for University Housing Is “Work with Us, Not Against Us”

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In this episode, Emily interviews Dr. Travis Seifman, a postdoc at the University of Tokyo. During graduate school, Travis lived in university housing at multiple universities, but chiefly two campuses of the University of California. While the housing was subsidized and convenient to arrange, Travis noted a few downsides and annoyances. Travis and Emily discuss the differences between university housing and private housing and wonder how best to allocate this scarce resource. Travis proposes an adjustment in the approach that universities can take toward their housing administration: “Make it reasonable for adults.” This episode, recorded in August 2019, should serve as a conversation starter regarding the objective of university housing and its administration, especially in the era of COVID-19.

Links Mentioned in the Episode

Teaser

00:00 Travis: The purpose of university housing is not to make money for the university. The purpose of university housing is to provide an affordable place to live for students, in light of the fact that we’re only making X amount and they know full well that we’re only making X amount. And in light of the fact that in many of these communities, local housing, regular market housing is extremely expensive. Making it affordable, and then also making it reasonable for adults.

Updates

00:31 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season seven, episode four, and before we jump into the interview, I have some personal and business updates to share with you. I’m going to start adding short updates to the beginning of each episode. This week, I have a pretty huge one on both the personal and business front, which is that my family moved from Seattle, Washington to Orange County, California at the end of August, my husband and I lived in Seattle for five years and had both of our kids while we lived there, so it’s a big change for all of us. This move brings us one step closer to our next financial goal of buying our very first home, which we are trying to do in 2021. I am documenting all the steps we’re taking to reach that goal in my progress journal inside the Personal Finance for PhDs community. If you want to keep up with our journey, or document your own, or access the multitude of resources in the community, you can find it at pfforphds.community. Now onto the interview.

Introduction

01:35 Emily: My guest is Dr. Travis Seifman, a postdoc at the university of Tokyo. During graduate school, Travis lived in university housing at multiple universities, but chiefly two campuses of the University of California. While the housing was subsidized and convenient to arrange, Travis noted a few downsides and annoyances. We discussed the differences between university housing and private housing, and wonder how best to allocate this scarce resource. Travis proposes an adjustment in the approach that universities can take toward their housing administration: make it reasonable for adults. I expect that this episode recorded in August, 2019 will serve as a conversation starter regarding the objective of university housing and its administration, especially in the era of COVID-19. Without further ado, here’s my interview with Dr. Travis Seifman.

Can You Please Introduce Yourself Further?

02:29 Emily: I have joined me on the podcast today, Dr. Travis Seifman. I’m delighted to have him. Travis, thank you so much for joining me. We’re going to be talking today about university-affiliated housing and Travis’s wide range of experiences with university affiliated housing. So Travis, thank you for joining me today, and will you please tell the audience a little bit more about yourself?

02:49 Travis: Thanks so much for having me, Emily. I’ve just finished my PhD in history at UC Santa Barbara, University of California, Santa Barbara, this year. My main research focus is on early modern Japan and Okinawa and rituals, diplomatic relations between them. I previously did two master’s degrees, actually at the University of Hawaii and the School of Oriental and African Studies at the University of London. Um, so I’ve lived in a few different places. And during my research, I also lived for a short time at the University of the Ryukyus in Okinawa, and at the University of Tokyo.

Travis’s Experience with University-Affiliated Housing

03:25 Emily: And all these different places that you’ve lived, at least some of them, or most of them you’ve lived in what I’m saying is university-affiliated housing. Can you describe the housing situations — main situation or multiple — that you’ve had?

03:37 Travis: Yeah, sure. Just to say it very briefly. When I was at SOAS in London, I stayed in grad student dorms, university housing. University of Hawaii, I stayed in regular private departments for one year. And then for two years, I lived at the East West Center, a federally funded think tank organization located adjacent to the university of Hawaii. So I lived in their dorms for a couple of years. Then, when I moved to UC Santa Barbara, they have dorms for single grad students and they also have family housing. I’ve lived in both of those, and I’ve also lived with my girlfriend at the family housing at UCLA. And during my research trips, I stayed at university dorms, visiting researcher dorms at both University of Ryukyus and university of Tokyo.

04:22 Emily: Why don’t you start with where you UCSB where did your PhD? What was your experience there with that housing?

04:28 Travis: To a certain extent, I would say it’s overall positive, simply in that university housing is always an easy go to option when you’re moving across the country or even moving to a different country. You know how to apply for it. You don’t have to arrive early, or get a hotel while you search for apartments and all this kind of stuff. And it’s often cheaper than the housing that’s around.

04:50 Emily: Do you think that it’s sometimes or usually is cheaper than going off campus because the accommodations are different, like maybe less private, for example, than what you’d get off campus, or have you actually lived in like subsidized university housing?

05:08 Travis: I think everywhere I’ve lived has been subsidized, whether it’s subsidized enough is another question. One place we could start is to just talk about the price. When I was living in the single dorms, the single person dorms at UC Santa Barbara to begin with my first year, the rent was somewhere around $980 per person in a four bedroom apartment. And the apartments in that area are somewhere around that cost. It’s the most I’ve ever paid to live anywhere. It was more than I paid to live in a private apartment in Honolulu. It was more than I’ve paid anywhere else that I’ve lived in my life for dorms in Goleta, which is a town that I had never heard of before I even moved there. We’re not even in Santa Barbara proper.

05:52 Emily: One clarifying question — you were living in a single person room, right? You had a private room in a four bedroom suite, is that right?

06:00 Travis: Yeah, it’s four individual private rooms, shared in a suite. It was $980, or somewhere around there, per month. And after I think, my second or third year there, the grad student association, or perhaps it was the TA union, actually managed to negotiate with the administration to get the rent lowered to $780, which I thought was an incredible victory. I don’t know how typical that is at other campuses, but we did manage to get it down. Regardless of what the market can bear in the area, it’s much more reasonable based on what we’re being paid.

06:38 Emily: Do you mind sharing what your stipend was at that time?

06:41 Travis: I believe it was somewhere around $1,900 a month, so if you spend half of that on rent —

06:46 Emily: Yeah, that’s quite high.

06:48 Travis: Yeah, and meanwhile, the family housing was somewhere around $1,300 a month, so you’re paying $1,300 for an entire apartment. I understand, obviously, subsidizing for families because they need it more, they have more dependents, but just to sort of mentioned that.

07:07 Emily: When you describe family housing or a whole apartment, are you saying it’s a studio or a one bedroom, two bedroom? How large is it?

07:14 Travis: Yeah, so I forget what precisely the rates are, but UCSB family housing has one bedroom apartments, they have two bedroom apartments. There’s a number of different configurations, but basically one bedroom and two bedroom, and I think they charge somewhere around $1,300 a month. And I’ve lived in one of those two bedroom apartments for a year as well.

07:36 Emily: So that was $1,300 for the entire apartment, so split between two presumably adults, maybe they have kids or maybe they don’t.

07:47 Travis: Yeah, exactly. So split between two adults, presumably both adults have some kind of income, but you know, one of them might not, one might be on a grad student stipend and the other one might be stay at home spouse, with children.

08:01 Emily: I think that’s not uncommon among international students, that if you get a spousal visa, the spouse is not permitted to work in the United States.

08:10 Travis: Right. That’s true. I hadn’t actually thought about that point. That’s true.

University-Affiliated Housing vs. the Private Market

08:13 Emily: How did it compare for you as a renter in that place versus if you had gone to the private market, as you had in the past?

08:22 Travis: When you’re working with the university housing, at least you have the advantage of that there’s an entire administration there and you kind of know who to talk to, as opposed to finding the landlord, like how do I actually get in touch with them? And to be fair, I suppose a lot of the rules probably aren’t too different, in terms of whether or not you’re allowed to have pets, most apartments don’t allow pets. Most landlords don’t want you repainting the walls or putting nails in the walls or anything like that. So in terms of a lot of those things, I suppose, I can’t say it’s too different. University housing has the opportunity to be more caring and more understanding about students. The idea that a landlord is in it for the money, that’s just the way things are. The university, ostensibly is not in it for the money. They’re in it to provide housing for members of their community. And so there’s an opportunity there to say, not just anything goes, but just to kind of be understanding of people’s needs, provide allowances, and just be a little bit more open.

09:30 Emily: I think what you’re saying is these students are part of the university community, right? The university is also their employer in many cases, or the administrator of their fellowships. It’s where they’re spending all their time and you’re part of this specific group. It’s not like when you go to the open market and as you said, it’s basically just about price, that’s it. It’s not intentionally trying to foster community or positive relationships between the landlord or the tenants or among the tenants or anything. So university housing is in a different position in that way. And like you said, one of the really positive things that it does is it makes it easy for students who are moving to a new area to find housing. They know they’re not going to be hosed. They’re not going to get in with a bad landlord or whatever. If it’s provided by the university, they know they have already a degree of trust there, is that right?

10:20: Right, right. And I think two places where private housing has the advantage over university housing because of the way that it’s administered, is in terms of access to guests, for example. I’ve had private landlords who’ve said we don’t want really loud parties, we don’t want you disrupting the whole community. But generally you have a key to your apartment that you can give to a guest if you’re leaving for a week or whatever it is. Nobody needs to know about it. You can have overnight guests and nobody needs to know about it. You can sublease and whether that’s officially allowed or not under the lease, you can sublease and people generally don’t have to know about it. University housing, they have all kinds [rules] — you can only sublease to single students who are actively UCSB students. Or if you’re in a family apartment, you can only sublease to people who qualify to be in a family apartment. If you’re going away for the summer, or if you’re going to wait for a whole year to do your research, it’s extremely limiting and for no really good reason.

11:21 Travis: A lot of university apartments, typically at UCSB, they’ve instituted that you don’t have any kind of key to your apartment. You open it with your student card. So again, if I’m even just having a guest over for one night, and I need my student card to get myself into stuff on campus, I can’t give them the card to get into the apartment. It’s these kinds of, I guess, on their point of view, it helps them enforce things maybe, or maybe it’s just a convenience that they didn’t think about the ramifications of, but it’s that kind of stuff where I’m an adult and who’s to say that I can’t have overnight guests. And even at the University of Tokyo apartments, even though the rules said that your overnight guest has to be officially a family member — a sibling, parent, or spouse, or child, I guess — when I actually, when my girlfriend actually came to visit me, they said, “well, we’ve put her down as your sister, so don’t worry about it.” And it’s that kind of, we can get into it later or maybe not, but it’s that kind of being willing to bend the rules that I think is, or not even bend the rules, but just be willing to help students rather than I’m here to enforce the rules, which I think a lot housing departments could afford to have a bit more of.

12:33 Emily: Yeah, that’s interesting. Thanks for providing the example of how you actually access your home. I was thinking, I guess it kind of makes sense for security purposes that you don’t want keys being given out and anybody being able to access whatever, especially because you have roommates within your suite, right?

12:51 Travis: That’s true. And security is an issue.

12:53 Emily: But like you said, it doesn’t allow for any discretion on the part of the actual person who lives there. And you wouldn’t have that kind of — I mean, with landlords, it’s like, okay, you’re not allowed to make copies of your keys. Most likely that’s in the lease somewhere. But as you said, it doesn’t mean you can’t allow your guests to have access a time or two when you’re not physically with them. It’s again, up to your discretion, as the person having the guest over.

Interplay Between the University and it’s Housing Office

13:18 Emily: What other experiences would you like to share?

13:20 Travis: One main thing that I would like to touch upon as I touched upon a little bit already is just the idea of having the staff there to say, I’m here to help you, I’m here to help you figure things out rather than I’m here to enforce rules. To give just a couple of examples of that, UCSB housing, if you have your own car, you can register that car, not any other. Only one car and you can park in the parking structure every day. If you don’t have your own car, you get, I believe it’s two visitor park passes a month and it’s included in your rent. I had my girlfriend coming up from LA however often, and granted that’s not allowed under the lease to be having overnight guests, but even so you won’t let me register her car because it’s not in my name, so what am I supposed to do, how am I supposed to have people park? I’m allowed to park all the time. It’s included in my rent if I have my own car, but because I don’t, I only get two passes a month. Anyway, the point of the story is to say that you walk in and the administrators say, “I don’t make the rules, I just enforce them” rather than saying, “I don’t make the rules. And I know they’re stupid, so let me tell you, actually, you can park over there over the weekends, or actually you can park here, or actually, if you use this code, you can get extra visitor passes.” Fill me in on what tricks or tips there are for making this more viable. And similarly —

14:56 Emily: I think that’s a more generalizable problem with bureaucracy, and the people who enforce it, as you said, rather than actually make the rules, but the people who are on the ground, interacting with those who are displeased about the rules. Often, the first response is just a recitation of this is the rule. Like I know the rules and this is the rule. It’s a little bit harder to find someone who’s willing to like find a creative solution. And often those people know what the creative solutions are because they know the rules so well, they’re supposed to enforce them, so they know the ways around them. It’s nice when you do find someone who is willing to work with you, but it might be something that you have to push for a little bit like, “I know the rule, but like, is there another way that I can get the result that I’m going for without breaking the rule?”

15:39 Travis: Right. Exactly. And that has to do with the way that university housing is integrated into the university administration, rather than being a separate entity, because if you have a private landlord, you can deal with them and they might be more friendly or less friendly that you can deal with them without it impacting reputation with the administration or I don’t know what to say, because it’s so integrated. And then of course, you have the opposite problem as well that very often housing is not integrated well enough into the administration, and I’ve had times when the cashier’s office agreed to let me defer my rent beausethe knew they hadn’t paid me. They knew that I wasn’t in the payroll yet, so they agreed to defer my rent for a few months and then nobody told housing.

16:21 Emily: Can you talk a little bit more about that? Because not being paid on time is actually a surprisingly common problem among graduate students. You would think that if whatever the problem was — the fellowship didn’t come through, it wasn’t processed on time, whatever it was — that housing, being affiliated with the university, they would have some procedures in place for “Oh yeah, this happens sometimes. It’s not the student’s fault. It’s again on the administration, and we have this policy where they can not pay rent for awhile.” You would hope that that would be in place. Whereas with the landlord, it might be a lot of hoops you have to jump through to convince them that it’s okay for you to not pay rent. Maybe you’ll get kicked out. That’s a possibility. So it sounds like it didn’t operate quite so smoothly for you.

17:05 Travis: Right. Actually that’s a really good point too, in terms of the pros and cons of university housing. The landlord doesn’t care whether you’ve been paid or not. I mean, they could choose to be flexible on a personal basis. Whereas the university you’re hoping it’s more integrated that they know. This particular case at Santa Barbara, it worked out very well in the end. Generally speaking, I’ve had overall, I don’t know why, but somehow UC Santa Barbara administration overall seems to be the least problematic of places that I’ve interacted with. They do seem to get their stuff together. When I first arrived at, at UCSB, as happens, I think anywhere that you go, it takes a little time to get into the payroll system. The semester or the academic year starts at the very end of September, so until you’ve worked through the month of October, then you get paid at the beginning of November. Otherwise they have no work to pay you for just yet. For whatever reason, maybe it’s typical for undergrads to pay for their housing on a quarterly basis rather than on a monthly basis. So originally they charged me three months rent at once and they wanted to take it all out of my fellowship before I could even pay my credit card bills, before I could buy groceries, before I could do anything else. Long story short, I talked to the cashier’s office and they were understanding and flexible and they agreed to not only put me back onto a monthly basis, but also to defer it so I didn’t have to pay the first few months rent until November. I then started receiving notices from the housing office saying that I hadn’t paid the rent.

18:44 Emily: So it was more of an internal communication problem within the housing office.

18:46 Travis: Right. It was just an internal communication problem between the cashier’s office on campus and the housing office over by the dorms.

Commercial

18:56 Emily: Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at pfforphds.community. The community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products, which I add to every month. There is also a discussion forum, monthly live calls with me, book club and progress journaling for financial goals. Basically, the community exists to help you reach your financial goals, whatever they are go to pfforphds.community to find out more. I can’t wait to help propel you to financial success. Now back to the interview.

Single vs. Family University-Affiliated Housing

19:59 Emily: And then the other thing that you brought up that I was interested in is you brought this up a little bit earlier about the price differential between single student housing and family housing, and you mentioned to me earlier that what is the definition of a family is a little bit of a strange thing to be talking about with university housing, right?

20:21 Travis: Right. Sure. At UCSB and I think probably UCLA as well are quite flexible and quite open minded about what counts as a family. I hope that it works similarly at other campuses. I hope that it does. At UCSB, when I applied for family housing with my girlfriend, you don’t have to be married, you don’t have to be in a hetero relationship. All kinds of different possibilities are possible — single parent with children, all kinds of different possibilities are acceptable. But you have to prove it. And I understand why on the administrative side, because you have such a limited number of units for family housing, you want to make sure that the people who are living there are actually families who are ostensibly more in need of the extra subsidized apartments. So I understand from the administrative side that they have to find some way of kind of proving that you’re a family.

21:28 Travis: At UCLA, they just do that through a very limited set of things. You have to have a shared bank account, proof of a former lease that you used to lease together under both of your names, marriage certificates, other kinds of very formal things. UCSB, for better or for worse, they say, even if you don’t have those kinds of very formal documents, you can share with us Facebook posts, texts, screenshots of your personal and private stuff to help try to show, try to prove that you’re in a meaningful relationship. So we shared with them screenshots from Facebook and from texting to say, “Oh, my parents are coming in for Thanksgiving. Are you going to be coming to dinner with us?” Or things like this.

22:18 Emily: This reminds me a little bit of, and I only know about this from TV or whatever, about green card marriages. Not green card marriages, but marriages in which a green card is involved and like having to prove to the government that you are actually in a romantically-inspired marriage, as opposed to some other kind of arrangement. It seems a little bit of overstepping.

22:45 Emily: I guess what I’m curious about with respect to family housing, and maybe this gets into more what you think or what you think the university thinks the purpose of family housing is? What do you think the purpose of it is? And is it accomplishing that purpose?

23:00 Travis: Yeah, that’s a good question. I think it’s a complicated issue because I think that for families, especially for grad students, like I was saying before, if one partner is on a grad student stipend and the other partners being a stay at home spouse, stay at home parent. Or even if both parents are on grad student stipends, you’re providing an opportunity, providing a way for them to live affordably as a family, with their dependents. For those in those situations obviously it’s a very good thing that that’s provided. I can’t imagine how some of my friends managed to afford…just how do you afford to live? We get paid roughly $1,900 a month. If your rent is $1,300 a month for the whole apartment, and that’s your only income for an entire family with one or two kids, I don’t know how people do it. So I appreciate that they have family housing for that purpose.

24:05 Travis: But then of course the flip side is that the single students are saying, just because I’m single, just because I don’t happen to have a romantic partner or a larger family, I have to pay more per person at least to stay in these smaller apartments. I personally have never had problem with being in a dorm room situation where I have my private room attached to a common room. But I know a lot of people also who say, I’m an adult and I want a whole apartment to myself or something like this. UCLA has studio apartments for single grad students and they charge a lot of money for them. UCSB the only option on campus is these two or four bedroom apartments, like I was talking about before.

24:54 Emily: Yeah. I guess this conversation is making me think about what is the purpose of family housing? Because like you said, it’s a differentially applied benefit. There’s more subsidy available to some people because of their family versus other people. And is that fair or is that not? But we were talking about university housing versus private off campus housing, where off campus the only regulation you’re going to find is a maximum number of people who can live in a certain size space. They don’t care, married, unmarried, children, not, it doesn’t matter. So maybe there is an opportunity with on campus housing to provide some, as we were talking about earlier, some additional support for the students in most need, like we were talking about students moving long distance or from overseas — hey, that university housing is there for you to make the whole process easier. And so maybe there is an opportunity to sort of subsidize students who are more in need, like those with dependents. But for me, the harder argument actually is extending that benefit to students in two income households, two income families without any dependence. That’s what, to me, gets a little bit tricky. Like you were saying, single adult versus a couple where it’s just two adults — why should that couple get any more subsidy if both of them are working, if both of them are permitted to work? For me it’s a little bit harder to extend this benefit beyond those who have actual dependents, whether they’re children or non-working spouses.

26:29 Travis: Right. And also, as you’re saying about this, it makes me think about international students who — I don’t know the ins and outs of it. I think being an international student is a lot more difficult in all kinds of ways than the rest of us know. But I wonder, I would imagine that for international students, even beyond the simple matter of the convenience of not having to look for an apartment, the convenience of being able to just arrive in the US and have already arranged an apartment. I would imagine that looking for a private apartment as an international student, you probably have all kinds of trouble with documentation with guarantors. Part of the reason that I’ve never looked for a private apartment for myself in Japan the many times that I’ve gone there for research is because I don’t have a Japanese guarantor, and I don’t have a Japanese bank account, and I don’t have a Japanese phone number until after I have an address to give the phone company to say that I live in Japan and to get a phone number.

27:25 Emily: There’s credit scores as well. That’s another major hurdle for international students coming to the US. The US doesn’t recognize any credit that might have been established in other places.

27:35 Travis: So that’s a whole other conversation to be had about whether some kind of more consideration should be given to international students, especially international students with a family, with dependents rather than domestic students, perhaps. And then just to kind of throw it in there, at the East West center, you have the opposite situation where the East West center dorms are only for people who are on a fellowship or otherwise sort of officially affiliated with the East West center, which is this sort of Asia Pacific studies organization. And it’s about, I think it’s about 75%, my numbers might be wrong, I think it’s about 75% international students. You can only get in there if you’re on a particular kind of affiliation with this organization. If you’re a UH student who doesn’t have that affiliation, you don’t get to live in these dorms. And the dorms are primarily single rooms and double rooms. The single rooms are $400 a month, the last I checked. That was about 10 years ago, but extremely reasonable, especially for Honolulu. But if you’re in a family, you can’t live there. It’s actually kind of the opposite situation of trying to get into these subsidized apartments and family housing at other campuses. That’s a whole other complicated…they really want people to live in the community and interact with each other, on a day to day basis. But if you’re in a family, then you can’t. I think you’re absolutely right. These are the conversations that people are having. Is it fair to have these subsidized apartments only for people in certain situations, and especially if the the second spouse, the non grad student spouse is earning a proper full salary at whatever job it may be, then they absolutely can afford that apartment while other people can’t.

29:16 Emily: And in your experience, has there been any means testing. Have you been asked what your income is when you apply for housing?

29:23 Travis: I don’t recall whether or not I’ve been asked, but I’m not aware of…I mean, I don’t know what goes on in the back rooms, but I’m not aware of that being a policy. I’m not aware of them giving preference to people who don’t have the second income or anything like that. I definitely know people who live in family housing who have a second income, people who don’t have a second income, international students, non international students.

29:54 Emily: It’s just interesting, because again, when we’re comparing with private landlords, how much you make is a very important question for them to ask, to make sure that you can afford the apartment. But of course, there’s no case where they’re going to say, Oh, you make too much, of course we can’t live here. Make however much you want. It’s fine. But it goes again, back to the question of what is the purpose of university housing, and if it is subsidized, and if it is one of their objectives to help students and students’ families who have less means to be renting off campus or whatever, then it might make sense to ask about that. But again, that’s another example of maybe some overstepping that could be going on. So this is a very complicated issue, obviously.

The Ideal University Housing System

30:29 Emily: I’m wondering for you, Travis, if you were to design your ideal university housing system, maybe what would your goals be? And how would you try to achieve those goals?

30:42 Travis: It’s a really good question, and I tried to give it some thought. I don’t know, I have to admit as much as we all have gripes, and I certainly have gripes. At the same time, I’m not an expert administrator, all of the ins and outs of how it should be done, and I understand that people are trying to do what they can, but I think the key point is the purpose of university housing is not to make money for the university. The purpose of university housing is to provide an affordable place to live, for students, in light of the fact that we’re only making X amount and they know full well, that we’re only making X amount. And in light of the fact that in many of these communities, I guess it all depends on where you are at college, but for the places that I’ve lived, local housing, regular market housing is extremely expensive. Making it affordable, and then also making it reasonable for adults.

31:34 Travis: I think part of it is also whatever regulations you have — we didn’t really get into this too much — but whatever regulations you have for undergrad housing, keeping in mind, I mean they are legally adults, but you mind certain notions of trying to take care and keep control over the community in loco parentis, and all of that kind of stuff. Simply extending those policies to grad students isn’t the best way, and acknowledging that as grad students, we want to have a full apartment to ourselves, or at least have the option. We want to redecorate our places. We want to be able to have parking. We want to be able to have pets. We want to be able to come and go over the summer or for a whole year and still retain our apartment. Or if we can’t retain our apartment, then work with us as adults, I think is sort of the key point.

32:13 Travis: And again, just working with people in a way that works with us and not against us. I understand there’s a much more complicated conversation about bureaucracy in general, in terms of, if you give people exceptions, then who are you not giving exceptions to? And how is that fair? And what’s the purpose of policies if you’re not going to enforce them and all these kinds of things. Saying you can’t have overnight guests unless officially of your relationship. And then what happens when you have a girlfriend or even just a friend coming? I pay for this apartment, I should be allowed to have people stay. Just various things like that. I think the key point is just making it affordable, making it a place where real adults can live and making it friendly and workable. Making it a place where people are working with you and not against you. It’s kind of the three points I would make.

33:04 Emily: I’m really glad to have your perspective as someone who’s lived in multiple different university-affiliated housing situations like what’s worked well, what have you, what positive things have you seen about it, maybe what things can be changed. It seems to me that one of the main points that you’re making is just that the administration needs to listen to the students, and as you were just saying, treat them like adults. It seems like that at least happened in your experience at UCSB, when the union or the GSA or whichever it was, was heard and actually got that rent lowered, which is an amazing victory. I just really appreciate your perspective on those issues.

Best Financial Advice for Early Career PhDs

33:41 Emily: As we finish up, would you please share with us what your best financial advice is for another early career PhD?

33:48 Travis: Yeah, I think as someone who’s just finished, I’m not sure what kind of advice I can give for other people who have just finished, but for people who are still in the PhD, I think my main advice would just be to keep your eyes out for whatever you can apply to, and kind of be aware of the fellowships and other kinds of resources that are available for you. You can’t spend hours and hours and hours applying to every single thing and investigating every single thing, but be aware of what’s available to you and take advantage of it. If your department offers whether explicitly or sort of implicitly offers that everybody gets summer funding, at least once or offers that everyone gets at least one quarter or two quarters off before the end, make sure you take advantage of that, make sure you do that. Don’t miss the deadlines. Just be aware of what’s out there and be aware of what you’re eligible for, not just in your department, but also in grad div or in School of Humanities or in whatever other things it might be coming from.

34:49 Travis: The other thing I would say is push and advocate and make the professors, make the faculty and administration aware that certain kinds of things are not funded. This is going into a whole other conversation, and I’ll just take one more minute, but for example, at Santa Barbara, I was fortunate to have a certain amount of funding available possible, potential to me for conference travel and for research travel. And that seems very logical from a top down kind of, okay, we’re giving money for conference, traveling for research travel.

35:22 Travis: Well, what about language study and what about things that are not strictly language study? Because I’ve gotten the funding in the past to study, there’s a thing called FLAS, the Foreign Language Area Studies scholarship, which allows you to study modern languages that the government considers to be of strategic value. But then when they find out that you’re studying classical Japanese or classical Chinese, or you’re not really in a language program per se, but you’re doing paleography or how to handle documents or a workshop on how to handle documents. Well, now it’s not language study, so now there’s no funding for that. You need to make people aware that these programs exist and they cost money and you need to have funding for it from some avenue. FLAS won’t pay for it and if conference travel and research travel won’t cover it, what can the department do? What can grad div do to create something that will cover book history workshops, paleography courses, archeology field, school, and so forth.

36:18 Emily: Yeah, it sounds like, again, you’re bringing up the points of being flexible with people. If everyone’s on the same page about what the goals are, then let’s be flexible about the way that we get there. Or just not letting people fall through the cracks. If you create big planks and boards, let’s make sure there aren’t gaps that people are actually falling into between those boards. Thank you so much for adding that Travis, and thank you so much for giving this interview.

36:45 Travis: Thanks so much for having me. This was really wonderful. I really appreciate it.

Outtro

36:48 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

How This Grad Student Navigated a Broken Engagement in a High Cost-of-Living City

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In this episode, Emily interviews Tina Del Carpio, a third-year PhD student at the University of California at Los Angeles in ecology and evolutionary biology. Tina chose their PhD program in Los Angeles in no small part because their fiance’s career was tied to the city. However, when they moved in with him and started planning the wedding, cracks began to form in the relationship. When they broke up, Tina had to figure out how to extricate themself from their shared apartment and yours-mine-and-ours financial system. Fortunately, Tina landed on their feet with the help of their NSF Graduate Research Fellowship, understanding advisor, and network of supportive friends. At the beginning and end of the episode, Tina and Emily also discuss the power of self-advocacy in graduate school.

Links Mentioned

grad student breakup

Teaser

00:00 Tina: Thankfully, we also talked about what would happen if we broke up, even before I moved out here. I was very adamant about having my own support network and knowing that I’d be able to survive without, if things just didn’t work or we’d gotten divorced or something.

Introduction

00:21 Emily: Welcome to the Personal Finance for PhDs podcast to higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season six, episode ten, and today my guest is Tina Del Carpio a third year PhD student at UCLA in ecology and environmental biology. Tina chose their PhD program in Los Angeles in no small part because their fiance’s career was tied to the city. However, when they moved in with him and started planning, the wedding, cracks began to form in the relationship. When they broke up, Tina had to figure out how to extricate themself from their shared apartment and “yours, mine and ours” financial system. Listen through the end of the interview to hear how Tina handles their finances these days, and they’re excellent advice for other early career PhDs on advocating for yourself. By the way we recorded this interview in September, 2019. Without further ado, here’s my interview with Tina Del Carpio.

Will You Please Introduce Yourself Further

01:19 Emily: I have joining me on the podcast today. Tina Del Carpio, who is a graduate student at UCLA, and we’re discussing a little bit of a tough topic today, which is Tina’s breakup from about a year and a half ago. They had a little bit of financial commingling before the breakup and had to disentangle themselves from one another afterwards, which was a challenging thing to do in the midst of graduate school. Tina, I’m so delighted to have you on the podcast. Thank you so much for joining me. And will you please tell us a little bit more about yourself?

01:47 Tina: Of course. Thanks for having me on Emily. My name’s Tina Del Carpio, my preferred pronouns are they/them or she/her. I’m a second year PhD student at UCLA, or I guess about to be a third year PhD student at UCLA. My focus is on genetics and epigenetics of canids, specifically dogs and foxes.

Getting Engaged, Starting Grad School and Moving to LA

02:10 Emily: Okay, so we need to take this story back to when you started graduate school. How did you make the decision to go to UCLA? What factors were you?

02:19 Tina: Yeah, so this is actually really entangled with my relationship because at the time, my partner and I had been long distance for about five years and he was working in the film industry, so his life and his job were very tied out to LA. I geographically restricted my search to universities near Los Angeles, or ideally in Los Angeles. I was very fortunate to make a connection with a postdoc from the lab that I currently I’m a student in. I talked to her about her experience in the lab and the project that she was sort of leaving behind as she was graduating. I got really interested in that project and was looking to pick it up and met with her and the advisor, my now advisor, Bob Wayne, and we talked about the project and they helped me put together an application for the NSF GRFP. I ended up being awarded that fellowship. This all happened kind of very quickly. We actually had this conversation, decided for me to apply for the NSF, like a week before it was due. I actually only applied to UCLA in that case and figured “oh it’s a crap shoot. I probably won’t get in, and I’ll just stay on track with my other plan to just apply to a bunch of schools the following year.” But it worked out, I got funding and it was in my ideal city, and with an advisor was happy to work with.

03:49 Emily: That is an incredible story, not even the one that we’re focused on today, but I love hearing about sort of non-traditional ways of finding your way into a PhD lab. You networked your way basically into this, right? You said you first connected with a postdoc who was leaving the lab, then that connection led you to the advisor and put together this NSF application, which by the way in a week, that was successful. That is incredible! Good job on that. How did you first make that connection with that postdoc?

04:22 Tina: Yeah, so it’s funny. I literally was thinking about, okay, I changed jobs, I was working as a lab tech gaining more research experience to apply to grad school, and I had just sort of wistfully bookmarked a bunch of labs that I was interested in applying to in about a year. Then my boss announced that we’re getting a new postdoc. It happened that she was coming from one of the labs that I had bookmarkedm and when she came out to look for housing and to make some plans to settle in, in North Carolina, I kind of cornered her and was like, “Hey, so I’m interested in applying to the Wayne lab, can you tell me about the Wayne lab.” Also, it happened to line up with, I was about to be in LA visiting my ex, and so I was like, “Hey, I’m going to be there next week, can we meet up in person, and can you give me a face to face introduction with Bob?”

05:15 Emily: That is incredible. I mean, this is how networking works. It’s not like you were in some unrelated lab, right? You were already on the course to be studying something related to what you would ultimately do in graduate school. Of course there are related labs and people know each other and you run into people. That’s a wonderful story. It’s actually not that dissimilar from how I got into my graduate school, which is that my husband started — we graduate from college at the same time, but he started graduate school at Duke immediately, whereas I did a postbac year. And so, because I was regularly visiting him in Durham, I was especially interested in getting into Duke, and I basically used one of my visits to see him as like, “Hey, various professors that I’m interested in, why don’t I set up my own interview with you?” all prior to admission season even starting and made a few connections there. Ultimately applied to Duke and various other places and went through kind of the normal admissions route after that point, but then ultimately circle back around, and one of the people who I had created my own interview with ultimately, you know, offered me a position and he was my advisor during graduate school. These things, if you have the motivation, sometimes they do work out. I’m really glad that we have that story upfront.

06:28 Emily: Okay, so you were awarded the NSF GRF, that’s awesome, and you’re starting at UCLA and you’re finally living in the same city as your partner. What was going on with you guys like logistically and financially at that time?

06:40 Tina: Yeah. Things are getting a little bit more commingled and complicated at that point. When I actually got the NSF and got accepted to UCLA, because actually I initially wasn’t accepted and wasn’t even invited on the official interview weekend, but suddenly having your own funding for three years opens doors.

07:01 Emily: No kidding.

07:02 Tina: Yeah. So I got the NSF award and then shortly afterwards we got engaged, and then planned a wedding, made a lot of wedding deposits, and then I moved out into LA. Part of the navigating how to do our finances together, we basically decided we’d each keeps some of our money separate, but we opened together a checking account, a savings account, and a credit card, so we could both funnel some money into that and use that to build up a little bit of shared savings and also to pay off any expenses, groceries, rent, things related to the wedding, et cetera.

07:43 Emily: I want to ask a little bit more about that because this is becoming a very popular model, whereas maybe a few decades ago, a vast majority of couples were using fully joint finances. Some minority were using fully separate finances. Now this “yours, mine and ours” model is becoming very, very popular. As you said, most people use it for shared expenses like rent, like you were just saying, you had the wedding that you were putting down deposits for all that kind of thing. How did you decide on the split? Were you guys contributing equal amounts of money to your joint accounts? Or was it maybe by a percentage of income or how did you navigate that?

08:23 Tina: Yeah, so I guess the tricky part we were navigating was housing costs because my ex made about double what I was making, even on an NSF salary or stipend. We ended up deciding for housing that we would pay housing proportional, so he paid two thirds of our rent and I paid one third, especially moving from Durham, my rent went from $400 for my half of a two bed, two bath to we had a like $2,400, one bed, one and a half bathroom apartment. So my rent was changing significantly and also I was eating up a bunch of moving costs. So housing, we decided to do proportionately, but everything else we decided to just split 50/50.

09:10 Emily: At least it was the conversation that you had. That is a great point that you’re at least coming to a firm decision and have a strategy for addressing it. So the place that you were living, which was out of your price range, it sounds like, or I guess was it actually, so like, would you have made a different housing decision had you been moving there as a single person or maybe looking to find a roommate or like what would have been different and how much do you think you would have been paying?

09:35 Tina: Yeah, so I would have definitely looked for something different because it was…well, there was also a lot of uncertainty for me of like, what are my housing costs going to be? Even coming to LA my car insurance went up significantly and that’s actually a thing that I also commingled with my ex. He had USAA, which has a great insurance discount. I added my car onto his, onto his insurance, and so it took me a little while to navigate that and figure that out. But initially the budget I had set for myself was $800 for my rent. And then eventually, you know, I had to reconcile that when we were breaking up.

10:16 Tina: Thankfully we also talked about what would happen if we broke up, even before I moved out here, because my mom got divorced after like 20 years of marriage and I saw the financial struggles my mom went through because she had stopped working to take care of her three kids and the house and things. Then my dad lost his job and all these other problems. And of course, issues between my parents that led to them being divorced. I just watched my mom struggle a lot with her finances without my father to help support her anymore, so I was very adamant about having my own support network and knowing that I’d be able to survive without, if things just didn’t work out or if we’d gotten divorced or something. I feel like I I kinda lost the thread there, what were we talking about?

11:06 Emily: What different housing decisions might you have made? This rolls into what housing decision did you make once you guys decided to split up. Have we concluded talking about all the intermingling that was going on prior to the breakup? Is that about what the full picture was?

11:24 Tina: Yeah, I think so. I think the point I was trying to get to earlier that I lost was we talked about if we broke up and especially when we actually did break up, there was like a couple of months of us discussing it before it actually happened. But we reaffirmed that if we broke up, we would continue paying for the apartment that same way. That I would still just be paying a third and that he would continue paying two thirds, and he ended up moving out since he had family and places to go here, and my nearest family members are in Florida. I stayed living in the apartment for a couple of months until the lease was resolved and he continued to pay that two thirds of the apartment. Thankfully that was something we had discussed and agreed upon long before the breakup.

Financial Ramifications of Breaking of The Engagement

12:08 Emily: Yeah. I think we can move into kind of talking about that second phase now. It sounds like it was a long conversation. You guys had a long relationship, you were on the track to getting married, this is not something to be undertaken lightly. So you were having these conversations over a relatively long period of time. And of course, one of your concerns was how do I provide for myself in this transition to not being in this partnership any longer? So one of the things that you discussed and agreed on was the rent split. What else did you have to do once you guys decided that this breakup is official, the engagement is off? What other things had to happen to fully separate from one another?

12:46 Tina: I think the housing was the biggest thing because we broke up before our lease expired. It was like this big burden and I talked to the landlord and he told us that if we could rent the apartment to somebody else, he’d be willing to terminate our lease. Actually, I got into like kind of a sticky situation that I didn’t have the emotional energy to deal with, but where he was like, okay, I’ll advertise the apartment, but I need you guys to show the apartment. Even after we had actually moved our stuff out and we’re no longer living there, he was still like, no, you guys have to show it, I’m not gonna drive over and show it. I was still devoting time and energy to that, and it ended up still being worth it. It took a couple months to rent the apartment to somebody else, but we managed to end the lease at least a month early. For me getting back that $800 was huge.

13:43 Emily: Yeah. So the housing situation was the main one. It sounds like your ex was pretty generous, or maybe you would say reasonable, right? He was okay with continuing to pay your agreed upon portions of the rent for the amount of time necessary, but you were still doing what you needed to do to get out of it as soon as possible.

Commercial

14:03 Emily: Emily here for a brief interlude, the deadline for filing your federal tax return and making your quarters one and two estimated tax payments was extended to July 15th, 2020. I never expected to still be talking about taxes into the summer, but here we are. Post-bac fellows, funded grad students, and postdoc fellows still need major help in this area because of their unique situation. I provide tons of support to PhD trainees preparing their tax returns and calculating their estimated tax. Go to PFforPhDs.com/tax to read my free articles and find out if one of my tax workshops is right for you. I have one workshop on how to prepare your annual tax return and one how to determine if you owe quarterly estimated tax. Both workshops include videos, supplemental documents, and live Q&A calls with me go to P F F O R P H D S.com/T A X. Don’t struggle through tax season on your own. Visit my website for the exact information you need in the most efficient form available. Now back to the interview.

Making Budget Adjustments

15:19 Emily: So where did you move to and how did you find that next housing situation?

15:24 Tina: Yeah. So for me, I like living with other people. Actually I describe myself as painfully extroverted, so the first move was to find another roommate or find a roommate, I guess. A person in my cohort I had been spending some time with and was taking a class with and felt comfortable discussing some of my relationship stuff with, I mentioned to her like, yeah, I might be moving and looking for a new roommate soon. She was also in a housing situation, in grad student housing housing, which is really expensive here. I know Adriana, you interviewed awhile ago was living in like the family housing that’s highly subsidized, but my roommate was in the regular housing that’s like $1,300 per person per month, so not nearly as subsidized. Anyways, I found the person to live with, and then I was sort of waiting for her to finish up her paperwork to get released from her housing contract. And based on the new information I had of how much it was actually costing me to live in LA, I set a new budget of $1,100 a month for rent, and we found a two bedroom, two bathroom near campus, but far enough away that it was in our price range, and most importantly, for us, it had to be near a bus stop, so it was easy to get to campus.

16:44 Emily: Yeah. A couple of points I want to follow up within that. One is yes, I had that interview with Adriana and she was living in family housing for UCLA. I have another interview that’s been recorded, but not released as of the moment that we’re doing this interview, with Dr. Travis Seifman, and he is specifically talking about grad student housing. He’s lived in like a couple of different of the UC grad student housing, different universities. And then he’s also lived in graduate student housing at some other universities, including overseas. We have an extensive discussion around this, and one of the things that we talk about is his consternation around the price difference between family housing and single but roommates housing, and why is it that there’s such a price difference there. And so anyway, for any listeners who are particularly interested in that discussion, I’ll recommend that other interview. TBD when it will actually be published. Thanks for bringing that up.

17:39 Emily: One of the things I really like about the story is that, once you had been in LA, at UCLA for a year, you were able to, well, one, probably be more realistic about the amount of money you were able to pay in rent. Your budget went from $800 up to $1,100 per month. And then also, you found a person you wanted to live with and you guys probably had more at that point familiarity with the area and were able to do a housing search a little bit better than you could have from a distance. Of course that’s the case. My message, what I want to emphasize to listeners is that it’s a really good idea to reevaluate your housing, maybe after your first year of graduate school, whenever you’re thinking about housing in that second year, because you probably know a lot more about the area that you’ve moved to in that second iteration of the housing search. So how did that new higher rent fit in with your budget? What adjustments did you make to make that happen?

18:03 Tina: Yeah, I mean, I think I actually just had room for it. I had over budgeted other items. It took us a while to figure out the car insurance, and initially I was planning for my car insurance to double and instead it only gone up $30 and even then, it went up again when I had to separate my car insurance from my ex’s, but not as much as I was anticipating, so that was helpful. I think I ended up having to put a little bit less into savings, I think that’s where most of the difference came from. A couple of things that I have over head over budgeted initially, before I knew anything out here and then also pulling a little bit out of what I was contributing to my savings.

19:15 Emily: Another thing you did really well, there is to be sort of conservative in your estimates of your spending, in that you think you’re going to spend more than maybe you actually do, so you have that wiggle room for later adjustments within your budget.

Financial Life after the Break-up

19:27 Emily: Okay, we’ve gone through the breakup process and the separation from your ex, how are things looking in your finances today?

19:35 Tina: They’re looking okay. I just made a big purchase recently. I had a car that was a lease and I recently bought out my lease, and so that took a big chunk of my money. Basically, my car to buy out was like $12,000 with taxes and fees, and if I had been buying it from a used car dealership would have been closer to like $16,000, so it seemed like a pretty good deal. Especially since I could buy it out right, I’m not paying any interest on it. And the way I did that, is I had a considerable savings, just like paying out of my savings account. And so I paid for a third of the car, my father was able to contribute a third, and then another family member was able to lend me a third. So I did still take out a loan for my car, but from a family member who is lending it to me without any interest, of course.

20:27 Emily: Yeah. So that was a big chunk out of your funding, but that’s nice to not have that monthly expense. I mean, it’s still a monthly expense because you’re repaying the loan, but a much, much smaller one.

20:36 Tina: Yeah.

20:37 Emily: That is a great reduction in the rest of your spending. That’s great. It sounds like you and your ex were really thoughtful in this process. You had seen your parents get divorced and so you were keeping in your mind, this is a possibility. You’re going to move to LA, you’re going to live together, start commingling your finances. Maybe things won’t work out, you’re not married yet, and even after that, it still could not work out. It sounds like you did things pretty intelligently and carefully through this process, and so I think that you have like a positive example here of how this can happen, but is there anything that you, looking back, wish that you had done differently?

21:14 Tina: I think most of it was pretty settled. I wish I’d been a little bit more thoughtful about how we divided up and dealt with paying the wedding deposits, because that was a little bit of a thorn in my side when we were splitting up. And arguably my ex paid significantly more in the wedding deposits than I did, but he essentially, at the end of the day was the one who asked to call the wedding off, and so I requested that he pay me back for the wedding deposits that I had paid, which amounted to about a thousand dollars, which, again on a grad student income is a pretty significant chunk of money. And the message I got was, well, let’s see how long it takes you to move out of the apartment, and how much money is spent on the apartment, and then we can make this decision.

22:11 Tina: Then even though we saved more than that by moving out of the apartment early, then there was like some thorny issues about the engagement ring. So the engagement ring had been less than $2,000 and under the law in California, if the giver breaks off the engagement, the receiver legally owns the ring. Also my ex had told me, “oh, the ring is yours, it’s a gift to keep no matter what” and basically when I brought up the issue of my lost money on the wedding deposits, was told, “well, I let you keep the engagement ring, you should be able to sell that and recoup some of this money.” Then it turned out that he had super overpaid for the engagement ring and the money I can recoup from that is very little. I wish I had been a little bit more thoughtful about that sort of spending before we like commingled and talked a little bit more about what we would do in the situation where things broke off, but at the end of the day, I decided it wasn’t worth the emotional turmoil to be like, “well, this ring doesn’t actually cover my expenses, why don’t you take it back and you sell it and do this emotional labor and just give me my thousand dollars back.”

Navigating the Emotional Aspect of the Break-up

23:25 Emily: Yeah. I do want to come back to that point in a moment about the emotions of all of this, but I guess this is just kind of a point around splitting up in general is like, once you’re married, as you were just saying, there’s, there’s state laws that govern how relationships, how marriages separate, in terms of what’s done with the property. Sometimes it has to be figured out in court ultimately, and a lot of money can be spent on lawyers, but the really tricky thing is once you, if you’re not having that legal contract of marriage in place, and you guys were moving towards that, but not quite there yet, breaking out becomes a lot more murky. It’s something that becomes very individual and hard to navigate and something that takes a lot of energy. I just wanted to ask you, how did you manage to continue moving forward in your graduate program? Or did you? Obviously, you have ultimately, but did things stall a little bit as you’re going through this enormous personal upheaval?

24:22 Tina: I think there were two major things that helped me. There definitely was a little bit of a stalling point, but most directly related to grad school was talking to my advisor and telling him, “Hey, this is what’s going on. I’ve been a little mentally checked out because I’m trying to see whether or not my engagement is going to fall apart,” and thankfully, my advisor was very supportive of that. Around that time, actually, I had to turn in a 10 to 15 page written proposal as part of my first year requirements to slowly move towards eventually advancing to candidacy. So I talked to my advisor about it and basically just requested from my committee and extension and said, “Hey, here’s, what’s going on, can I have an extra month to turn this in?” And everybody on my committee was very supportive of that. That was number one.

25:13 Tina: Then number two was also just reaching out to friends and it took me a while to feel comfortable telling some of my lab mates and other people in grad school and just other friends I had met in the city, because at the time I had only been living here for about six months, so I didn’t have any real long-standing, deep relationships with anybody yet because I just didn’t have the time to establish them. But once I shared that information, everybody was super supportive. I actually learned that one of my grad school friends went through the same thing of also had an engagement end during her first year of grad school. They were super helpful. And then my longterm friends were unbelievably helpful. One actually flew out from Canada, where he was doing his PhD to come help me move.

26:02 Emily: Very, very sweet. Very, very wonderful to have that both new and old connections supporting you through that time. Plus, for me, this part of your story, when you were talking with your advisor and committee hearkens back to when you entered graduate school. You didn’t have to conform to the standard procedures in place for applying to graduate school. You realize, “Hey, yeah, this is a requirement in the first year, but maybe they can be flexible with me, and I’m just going to ask about it because what’s the harm in asking?” I mean, your advisor’s probably noticing that you’re not totally engaged anyway. It just comes back to that point that you are doing a great job kind of advocating for yourself and making things happen for you, and people can be accommodating if you ask them in the right way.

Best Financial Advice for Other PhDs

26:45 Emily: Tina, with the end of this interview, I’m going to ask you a question that I ask of all of my interviewees, which is what is your best financial advice for another early career PhD? And that could be related to the conversation that we’ve had today or could be completely something else.

27:01 Tina: I think actually it kind of ties into our last point of just like asking for help, of just reaching out to people and saying, “Hey, I don’t know what I’m doing, please help me.” I realized in the last couple months that investing has been a big hole for me, and I’ve been talking to one, actually one of my closest friends of over a decade and only recently learned that investing as a hobby of his. And then also like friends who are very good cooks. I never really learned how to cook as a kid growing up, so now I’m saving money by cooking at home a lot more. Just reach out to friends or coworkers or whatever and say, “Hey, I think you’re really great at this thing. I’ve noticed you seem to be really good with your money, or you’re really great at cooking, or you’re really great at this thing — how did you learn that? I’d really love to learn from you.

27:51 Emily: Nobody’s going to say no to a request phrase that way, absolutely. Wonderful, wonderful tip. And actually I know from Twitter that you are starting investing yourself and that you are listening to a podcast that really pushed you to do that — you want to mention that podcast and what you like about it?

28:08 Tina: Oh, sure. Yeah, you and I have been corresponding a little bit over Twitter and another podcast I had discovered that’s really helpful is called “Bad with Money” with Gaby Dunn. Part of what I really like about it is that I grew up with not knowing a whole lot about money and feeling like a little bit ashamed of that and just kind of feeling the differences in class, especially having gone to a private university for undergrad and my family had lost their house and lost our cars right before I went to undergrad. I just felt very distant and ashamed and all these bad emotions about money. Listening to Gaby’s podcast and being like,” Oh, it’s not just me, there are other people who feel very left out of the system,” made me feel a lot more comfortable talking about it.

28:57 Emily: That’s fantastic. Thank you so much for that recommendation. And Tina, thank you so much for this conversation today. I am sure that it is helping people in the audience who are maybe considering a breakup, or trying to navigate one, or trying to recover financially from having been through one recently, so I really appreciate your willingness to talk about this.

29:15 Tina: Great. Thanks so much for having me on Emily.

Outtro

43:30 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

How to Qualify for a Mortgage as a Graduate Student or PhD, Even with Non-W-2 Fellowship Income

by

In this episode, Emily interviews her brother, Sam Hogan, a mortgage originator with Prime Lending (Note: Sam now works at Movement Mortgage) who specializes in PhDs and PhD students, particularly those receiving fellowship income. Sam relays what it takes to qualify for a mortgage in terms of credit score, income, and debt load, including the special way deferred student loans play into the calculation. He details the unusual strategies he has learned over the past year of working with PhD clients to help them get approved for mortgages, even with non-W-2 fellowship income. At the end of the interview, Sam shares why he loves working with PhD home buyers. Over the past year, Personal Finance for PhDs has referred so much business to Sam that he has become an advertiser on the podcast.

Links Mentioned

grad student PhD mortgage

Teaser

00:00 Sam: It’s always best for a PhD student to be as proactive as possible. I’ve seen letters with three years of continuance, but they’ve reached out to me after one semester has passed. Now they only have two and a half years of continuance, where someone, if they had reached out a year earlier about their future, and how they’re planning to purchase home when they were in a new area, that is the perfect slam dunk way to do it.

Introduction

0:33 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is Season 5, Episode 17. And today, my guest is Sam Hogan, a mortgage originator with Prime Lending (Note: Sam now works at Movement Mortgage) who specializes in PhDs and PhD students, particularly those receiving fellowship income. Sam relays what it takes to qualify for a mortgage in terms of credit score, and debt load, including the special way deferred student loans play into the calculation. Sam details the unusual strategies he has learned over the past year of working with PhD clients to help them get approved for mortgages, even with non-W-2 fellowship income. At the end of the interview, Sam shares why he loves working with PhD home-buyers. Over the past year, Personal Finance for PhDs has referred so much business to Sam that he has become an advertiser on the podcast. Without further ado, here’s my interview with my brother Sam Hogan.

Will You Please Introduce Yourself Further?

01:34 Emily: I’m welcoming back to the podcast today. My brother Sam Hogan, who is mortgage originator. He sells mortgages. And Sam was actually on the podcast before in Season Two, Episode Five. It was while we’re recording this on April 12, 2020 and he was last on about a year ago. At that time, we were talking about how someone with fellowship income can actually get a mortgage — non-W-2 fellowship income because tis is a tricky thing that we talked about in that episode. So now, as I said, it’s been a year since that time, Sam’s handled a lot more mortgages of this type and so he knows a lot more about this process now. So I thought we’d have him back on for an update, basically, and a little more background on getting a mortgage as a graduate student or postdoc or PhD. So, Sam, welcome back to the podcast. Thank you so much for coming back on. Will you please just tell the listeners a couple words about yourself?

02:28 Sam: Thank you for having me, Emily, and Happy Easter from the east coast. Yeah, I’ve been working with PhD students now pretty heavily over the last 12 months. The company I work for, Prime Lending (Note: Sam now works at Movement Mortgage), is licensed in all 50 states. I’ve had the opportunity to read, review, approve, sometimes deny, these special candidates while they’re looking for their options for home-ownership.

[Sam’s Nationwide Mortgage Licensing System and Registry number: 1491786]

Basics for First Time Home-Buyers

02:52 Emily: Thinking about someone who is probably probably a first time home-buyer doesn’t necessarily know a whole lot about the process of getting a mortgage, and of course is concerned maybe about their their income, and are they really going to qualify and all these factors — what are the factors that go into a mortgage application? And what are the the ranges, that would be acceptable for those different factors?

03:16 Sam: Okay, so generally speaking, we’re looking at a risk profile and the ability to repay. For the borrower, having a over 700 credit scores for conventional, now about over 640 or 660 for FHA loans.

Different Types of Home Loans

03:32 Emily: Okay, you just dropped the terms conventional and FHA — what’s the difference between those two?

03:37 Sam: Yeah, so FHA is your original first time homebuyer program. It’s backed by the government and it’s designed for everyone to qualify for it, if you have decent credit and decent income. Conventional is preferred because it’s going to have a lower monthly payment, and the private mortgage insurance will drop off automatically. You should have over 680 or higher credit scores to go conventional and the income ratios are a little tighter. So it’s the better loan to qualify for and it has better terms throughout the whole 30 years, or whatever your loan term is.

04:16 Emily: Okay, so FHA is a little bit easier to qualify for, because it’s sort of designed for first time home-buyers, but it’s a less preferable loan in the long term. And so if I remember correctly, a lot of people who have FHA loans for a while they then end up refinancing to a conventional type of loan a little bit later on, to get rid of that private mortgage insurance.

04:38 Sam: That is correct.

04:39 Emily: Okay, great. Okay, so going back to the the lending standards you just mentioned, like credit scores, what else goes into an application package?

04:49 Sam: Yeah, I want to just touch on our current world situation and the lending standards are changing right now. And they’re changing because everyone is in the same boat regarding a possible change or disruption in income, slowing income for a certain amount of time, so be sure to talk with an expert and their specific requirements because this will change from bank to mortgage company to a larger credit union or financial institution. These are uncertain times, so you’re going to have some fluctuation and differences from lender to lender, but you want to work just as we said before, you want to work with someone who’s keeping you in mind and your goals in mind.

How Credit Scores and Debt Impact Home Loans

05:32 Emily: Yeah, okay, great. I totally agree and we should re-emphasize that like we’re recording this in mid April, things could be different by the time we publish it, things could be different a couple months down the line, so definitely just talk with someone right away. You mentioned credit scores, but I know also, your income, of course, plays into how much of a mortgage you can qualify for. Can you talk about that a little bit?

05:53 Sam: The common rule of thumb is people will qualify for four to five times their annual income. Now that will depend also on how much debt they’re carrying, and how much they’re putting from their savings into downpayment. But that’s a pretty safe estimate. Some people who are completely debt free will qualify six times their annual income, up to. Something else lenders experience a lot is, um, people doing their own due diligence and crunching the numbers, but we have systems and practices that do this quickly, more accurately, and can give you better results, so I would say talk with someone early and have them do the work. And then after you get their feedback, run your numbers to double check and maybe have some questions for them. We want to be able to work for you, and there’s no obligation to just have a few conversations and have someone explore your options.

06:48 Emily: Yeah, that sounds good. How does that play into that because I know a lot of PhD students do have significant debt loads from maybe undergrad or a master’s degree or something like that. How does debt affect the package?

07:03 Sam: Debt is not bad. It’s good to have things on your credit that have positive history, whether that’s a student loan you’ve paid off or currently paying off, revolving credit cards. You will run into issues, if you have absolutely no debt or debt history. I strongly recommend everyone, even against their pride, get a credit card. Don’t exploit it but use it regularly, pay off regularly. You want to have established credit, especially for a young homebuyer, because they might not have the 10 or 15 years of other types or forms of debt that someone who’s in their 30s or 40s might have.

07:49 Emily: Yeah, I definitely agree with establishing a credit score and having a strong credit history. But I’m just wondering, you mentioned earlier about the size of the mortgage and how debt can affect that. Solet’s say there’s someone who’s holding a good amount of debt. Does that affect like the ratio of the amount of mortgage they can take out?

08:06 Sam: Absolutely. Let me put it in some simpler numbers. If you’re bringing in $3,000 a month, all your credit cards, new house payment, maybe your car payment or gym membership, all that cannot add up to more than $1500 dollars of your income, We take your gross income and if you’re over 50% of that debt ratio, that’s a “Hey, better luck next time.” Even better situation is to be under 43%. Under 43% of your monthly income to debt ratio, is what Freddie Mac and Fannie Mae require, currently. Now this could be used to change, sometimes annually, sometimes quicker than that, but under 43% and better is a very good place to be in.

08:55 Emily: That makes sense. Yeah, so the total amount of debt payments you can have per month is limited and the mortgage has to fit in. To be approved for a mortgage, it has to kind of fit in around those other debt obligations that you already have.

09:09 Sam: Correct.

09:09 Emily: Okay, yeah, that definitely gives us something to kind of get our hands around when someone’s deciding, like, is it even worthwhile for me to approach Sam or another lender about possibly applying for a mortgage? I know you said earlier, just ask, that’s the best thing to do, because you guys can run the numbers better than than we can outside of the industry. I had one more question about student loans, because while student loans are in deferment, how does that play into that 43% that you just said. Because if they don’t make payments, does that just like not count at all? Or how does that work?

09:43 Sam: This a very specific guideline detail that changes, just letting you know Emily, and for conventional loans, and FHA loans, it’s both different. A rule of thumb: if your student loans are in deferment, you have to take the remaining balances and calculate 1% of that, and we factor that into your debt to income ratio. So if you have $100,000 in student debt, and we’re about to calculate a potential thousand dollar payment, even though you’re not making payments on them, that could stop your deal. Okay, so brings me back to letting an expert look at it.

10:19 Sam: Also, sometimes when the lender pulls credit, the way the credit populates, it looks like they’re making payments on their student loans. But really, they’re in deferment, so all those payments have to be switched. This is why when people run the numbers themselves, they might think, “Oh, no, I can’t do it.” But lenders know what it takes to get it approved. And I did want to touch back on the debt to income, it’s best for people to know first that you want to be under 43%. If that’s 42.98%, that’s still two thumbs up. But as soon as you’re over the 43%, some of the loan terms can change and make it stricter for you to buy.

10:56 Emily: Gotcha. And I also want to emphasize that just because you qualify for a mortgage of a certain size, or just because your debt-to-income ratio fits onto that 42% or whatever, that doesn’t mean you have to buy a house that that’s expensive. So these standards are for the lending industry, they’re not necessarily the advisable thing on the personal finance side. So just keep that in mind. We’re talking about basically how to qualify, not whether this is a good idea for your finances overall to have that high of a, an amount of debt per month. I just want to add that in there from the personal finance side.

What If You Don’t Have a Typical Situation?

11:33 Emily: Okay, Sam, so thanks for running down those broad strokes criteria. If someone doesn’t meet one of these, is there any recourse? Is there anything else that can be done if they still want to go through with a purchase?

11:47 Sam: Don’t give up lenders in general, we’re in the process of approving loans. We’re not in the business of denying people we would be out of business. So try and try again, I would say, because I have had PhDs students who have finalized their transactions with me been denied by two other lenders. The tip I can give to some of these people exploring their options is be willing to over document things for any uncertainty the lender might have. If there’s some variables in your income, explain to them that “Hey, this is all under the same advisor. I’m working in different areas, different years, but it’s under the direct supervision of x and he can provide you a letter saying that I’m here for five years under his supervision and it’s common for students in my place to continue to receive their funding. Please let me know if you need any other confirmation from my supervisor.” But yeah, recourse I would just validate how good of a borrower you are: I have great credit. I have the downpayment. I have guaranteed funding.

12:52 Sam: And you always can strengthen a file with obviously a cosigner. You can have a non occupant co bar family member, even a friend, who also is hopefully in good credit standing and has income to cosign on the loan for you. That’s not a forever thing, you can refinance them off the loan. But what I’ve found out in my years in this business is, there’s always a way to make it work if you keep working at it. Some people run out of options, and while they’re in school, it’s a funky time in their life, but that doesn’t mean that you’re not going to be a homeowner in a year or two years.

13:33 Emily: Yeah, gotcha. I actually was thinking specifically about co-borrowers because that was another example that we had on the podcast. My interview with Matt Hotze, he bought a home in Durham, North Carolina when he was at Duke and he bought his first year there and he had his parents, or maybe one of his parents, as his co signers and that enabled him, because his income was, low — one graduate student stipend. He was able to get into a larger house than he would have qualified for on his own. He actually had a three bedroom house. And then he rented out two of the bedrooms. So he was able to house hack, had no problem paying the mortgage because he had reliable renters. And yeah, it all worked out really well for him. So he just needed that little bit of help at the beginning. His parents, very fortunately, were able to provide that to him, and it was kind of a rosy story after that point, but that’s what he had to do to qualify for the mortgage.

14:27 Sam: A cosigner, sometimes can solve everything, except for poor credit. But strength in numbers. You can have up to four people on conventional loan application. Have I done that ever? No. But is it possible? Yes. So yeah, I mean, if you’re having some difficulty, your loan officer, if you’re brainstorming with them, one of their first solutions is have a cosigner. A cosigner is a very simple fix. If you have to pivot your approval because you have gone through the process, you didn’t get approved on your own and your adding a cosigner on your contract, I would say give your lender about 10 days and you should be in good shape.

15:08 Emily: Gotcha. I’ll add in one more time. This is the “how to qualify for a mortgage” talk, not “is it a good idea to be a cosigner or to have a cosigner”. Totally separate conversation.

15:19 Sam: A client of mine that’s closing this month who listened to your podcast…I don’t want to reveal too much about his purchase, but we’ve been given the approval and at the start, we ran the numbers a few different ways. He was like “With a cosigner, what’s my payment? Without a cosigner how much is my cash to close?” And we were on the fence for a little bit but we were still in the process. So while he was under contract, I was still able to give him scenarios and options. We eventually decided with his deposits and everything that was already being credited, his cash to close was low enough that he wouldn’t need to have a cosigner. So it’s not set in stone at the start. Yes, it’s always better to have your ducks in a row. But the lender is flexible. We always can pivot for the buyers needs. And I also say that in the buyers defense. If something’s going wrong with the house, the lender can help you get out of the loan on your finance contingency, maybe if your home inspection is past. So there’s different ways we’re always here willing to help.

16:25 Emily: Yeah, that sounds really good.

Commercial

16:30 Emily: Hey, social distancers, Emily here. I hope you’re doing okay. It took a few weeks, but I think I have my bearings about me in my new normal. There is a lot of uncertainty and fear right now about our public and personal health and our economy. I would like to help you feel more secure in your personal finances and plan and prepare for whatever financial future may come. You can schedule a free 15 minute call with me at PFforPhDs.com/coaching to determine if financial coaching with me is right for you at this time, I hope you will reach out, if only to speak with someone new for a few minutes. Take care. Now back to our interview.

Tips for Home Loans with Non-W-2 Income

17:15 Emily: Okay, so let’s narrow down to the the scenario that we talked about the last time we did an interview, which is about a graduate student or postdoc with fellowship income, with non-W-2 income, and that a lot of lenders don’t understand how to deal with that. You’ve been working with these types of clients quite a bit over the last year. And so you have really figured out some things that how to make these loans work in some cases and what will not work in other cases and maybe in those cases, a co-borrower or something like that would be needed. Can you just tell me a little bit about, you know, this particular weirdness of non-W-2 fellowship income and how you make it work?

17:54 Sam: It’s definitely a tricky income. How I help make it work is I support all the variables within the fellowship income. I show that it’s the same field of study or field of work that they previously in. Especially in the offer letters, they usually always contain a phrase if the student remains in good standing, and the underwriter can say, well, that’s too much of a variable, we can’t accept this income because there’s too many variables. Well, I say well look at her transcripts, look at his transcripts. They’ve always been in good standing, literally forever. That’s why they were one of five students selected out of 400 applicants to get into this program. Yeah, it takes a little bit of storytelling, and the presentation is important, so it’s okay if someone who doesn’t have W-2 income, we treat other incomes just as fairly, but you have to know how to present it, how to over-document it, and if it’s too uncertain at the start, most lenders have a scenario desk you can reach out to who will give you some early feedback without going completely through the application process, completely through the loan process, and still having a little bit of a question mark about if you’re really approved. I’ve had our scenario desk, give me pushback on certain files, and I just asked, How can I support that variation or the uncertainty that you’re seeing in this letter because I can provide what you’re looking for most likely, I just need to know what that is.

19:38 Emily: Yeah. So I think if I can kind of zoom out from that a little bit. First of all, one of the things that you talked about in the last interview was that non-W-2 fellowship income is not going to qualify for an FHA loan. It’s just completely off the table. It’s only going to be a conventional loan. And what you’re talking about now is saying, okay, you know, PhD student or postdoc, you’re showing me your offer letter and you are looking for certain things that offer letter, like the income and also the number of years of guarantee, sometimes that’s in there as well. And then you’re saying, Okay, well for all the things in the offer letter that are maybe a question mark to the underwriter, you have now learned how to recognize some of those things, and you can start providing additional supportive documentation, that is asking the student or postdoc, okay, well send me your transcripts. Okay, well send me whatever it is, your work history. I don’t know what those things are. Can you talk a little bit about that guarantee? Because I know the guarantee is a very important factor when we’re talking about non-W-2 income.

Loan Types for Non-W-2 Income

20:41 Sam: Yes. So I want to answer your questions in the right order. One of the main critical points for this type of income is that it’s not recognized by the VA, Veterans Administration, FHA. It’s not recognized by USDA, and it’s not recognized by Fannie Mae. Your most successful application and loan approval is going to come from a Freddie Mac conventional loan, okay. Now you can do as little as 3% down for that conventional loan. But this is the key point that only Freddie Mac recognizes this income, per the lenders approval. Why these PhD students are not going to approved their first attempt with their lender is because it’s per the lenders approval, the lender can’t document it and approve it with their underwriter, then Freddie Mac will not take the loan.

21:40 Emily: So what you’re just saying there is that you now know having worked this type of income, this mortgage type is off the table. This mortgage type is off the table. This is the one that is potentially successful. And what you have to do is get your underwriters that you work with to approve that loan and then Freddie Mac will take it on, will approved it. What you have figured out is these little tricks and document support and so forth that need to happen for the underwriters that you work with, which presumably would be the same elsewhere, except they’re not necessarily as knowledgeable about this particular type of income.

The Importance of Offer Letters for Non-W-2 Income

22:15 Emily: Let’s talk more about that. I know that you’ve mentioned to me before, I think you mentioned in the last interview, that for this non-W-2 income, normally underwriters, lenders for W-2 income, they presume it’s going to continue for at least a while, even though we all know you can lose a job at any point. But for the fellowship income, they for some reason, don’t presume that it’s going to continue and they want to see a certain length of guaranteed fellowship time.

22:41 Sam: Yes. For conventional loans, we’re looking for three years of continuance of income. Now, I know it’s not fair because my job doesn’t guarantee me three years of employment in the future. That’s not the typical contract for all employment, its employment will usually. For conventional loans we want to see three years. I actually have a example that I’ve written up. It’s a mix of a few different approval letters that worked, that I had some success with clients in the past year. And I will say briefly that if your approval letter is more than three pages, there might be too many variables in your offer to get an approval.

23:36 Emily: You’re saying an offer letter, like the offer letter you get when you start grad school or start a postdoc position. This is going to be your stipend this along goes on for. This is a typical document, like instead of having a Form W-2, this is what a fellowship recipient would send to you. They would send you their offer letter and so what are you looking at in that offer letter that is like yeah, this is going to go forward or no, this might be a problem.

24:00 Sam: Yes, so what we’re looking for is the continuance of income, we want to have three years. We want it to state that you’re being provided health insurance, because that’s a really good sign shown you’re actually an employee, you’re not just a student. It’s okay for it to have a few variables in it, like remaining in good standing or making satisfactory progress towards their doctoral degree. That’s a good phrase in there, that’s fine. But when you have layers and layers of variables, like you know, making satisfactory progress towards our doctorate, you must take these courses or get this exact GPA or higher in these courses, must have approval from their supervisor for a continuance into a fifth year. Those are things I’ve had to get more information on because the more variables, the more uncertainty it makes the underwriter feel. And so that’s where it comes back to the presentation of the loan.

An Example of An Offer Letter

24:58 Sam: “I’m pleased to inform that you been awarded a fellowship in the first academic year beginning September 2019. In subsequent years, you’ll be supported by research and teaching assistantship. This Fellowship Award gives you deserved recognition for your accomplishments to date, as well as added independence to stipend and exploring your research interests for the first year. For the academic year 19-20, the stipend will be $3,345 for nine months. For Summer 2020, the stipend will be $3,475 for three months. This means you receive an annual stipend of $40,530. In addition, the award pays your tuition health insurance and health services fee. We are committed to continue this financial support for for up to five years, as long as you remain a PhD student in good academic standing.

25:51 Emily: Yeah, so what I’m hearing and I think what the listeners will hear is, that’s first year fellowship followed by W-2 income for the remainder, four years guaranteed.

26:02 Sam: Right.

26:03 Emily: That’s great. So that means in your world, that person would qualify for a mortgage during that first year, even though it’s fellowship, because their letter says, Yeah, it’s one year of fellowship, but you’re going to have after that this W-2 type income,

26:17 Sam: Correct. The most success I’ve seen with the PhD community are the simple letters that are less than two pages with little variable, that will show more than three years of continuance. And that’s a very simple approval for us.

26:35 Emily: And that’s whether that is fellowship income, or W-2 or a combination. If that’s what the offer letter says three years or more. That’s straightforward for you.

26:46 Sam: Correct. And that is where I’ve seen the most success with these doctoral candidates.

26:53 Emily: But still going back to your earlier point of if that’s not what a particular individuals letter looks like, still reach out to you, or another lender, because maybe with enough supplementary documentation, it could still go through, but it’s just going to be a little bit more of a process.

27:09 Sam: Correct. And, I mean, when I get connected with some of these department supervisors, I let them know, “Hey, this is what we’re looking for. Can you simplify this offer ladder for me, because we’re looking for something a little less complicated?” And I do like to tell my PhD applicants that, “Hey, I would love a shortened version of your personal statement. I want to be able to know a little bit more about where you’ve been, where you’re going.” And it always helps to tell a little bit of a story.

27:40 Emily: That is really interesting. That adds a little more detail to what you said earlier about the story and the presentation being what matters. That’s really interesting to me that you that you might include something like a version of a personal statement in this package that goes to the underwriter, that’s really interesting.

27:59 Sam: At the end of the day, I know I said this in the last episode, the last time I chirped in, but it does come down to one person’s decision. If the underwriter is comfortable, they’re going to approve you. If they’re not comfortable, they’re gonna want more documentation, or a cosigner, or something else to make it, you know, aboveboard.

28:20 Emily: Yeah, that clarifies. Thank you.

Final Words of Advice

28:23 Emily: Sam, is there anything else that you’ve learned about this fellowship type income that would be helpful to the listeners, with respect to getting approved for a mortgage?

28:32 Sam: I’ve learned that working with the PhD community are some of the best clients I’ve ever had.

28:38 Emily: Yeah, you’ve told me that before, and I really love to hear it!

28:42 Sam: Yeah. It’s really nice to work with people who are planning. It’s always best for a PhD student to be as proactive as possible. I’ve seen letters with three years of continuance, but they’ve reached out to me after one semester has passed, so now they only have two and a half years of continuanc, and that is a big problem. Whereas someone, if they have reached out a year earlier about their future, and how they’re planning to purchase a home when they were in a new area, that is the perfect slam dunk way to do it. Unfortunately, I’ve had to let some PhD students know that it’s not going to work out because their continuance, they’re under three years. And that’s going to be one of the major roadblocks. So talk to someone early, tell them you’re interested in a Freddie Mac, conventional loan. If they can find the right way to document their income and approve them. It’s happened more often in the last two months, I would say, with clients reaching out at this time of the year, when, if I had been talking to them six months ago, I could have had them approved.

29:52 Emily: Yeah, so actually at this time of the year, April 15 is decision day. Everyone has to decide what grad school they’re going to, or they’re supposed to decide. So if a PhD student is looking at that fellowship income in their offer letter, it says three years, they need to reach out to you sooner rather than later before that clock starts ticking, if they’re interested in purchasing within that first few months or first year or whatever, of being in graduate school. They need to reach out earlier. Thank you for saying that.

How To Reach Sam Hogan

30:21 Emily: Sam, you have not been particularly self promotional during this interview, and I appreciate that but I do want to say that you have been working with this type of client — people receiving fellowship income, also other types of PhD clients over the past year. I think you’re working really hard for them and that they should go to you, at least among getting a few different voices in their life, they should come to you. So will you please tell them the best way to contact you?

30:46 Sam: The best way to reach me is definitely by cell phone. Text is preferred right now because there’s a lot of volume going through the industry. My cell phone number is (540) 478-5803. And then my work email is a great line of communication, also. It’s sam.hogan@movement.com.

31:15 Emily: Yeah. And we’ll have all that contact information in the show notes, as well. Sam just mentioned, I was surprised to learn, but even during this social distancing period, the mortgage industry is hopping, because interest rates are so low. People are really refinancing a lot right now, even if they’re not doing necessarily new purchases at the moment or not going into that process at the moment. But, you know, maybe in a few months or a year, whatever things will return to a more normal time and you’ll be able to move forward with lots more purchases.

31:47 Emily: Sam, thank you so much for coming on the podcast. And thank you so much for working with this population and being willing to, as a personal favor to me, to investigate this and take this on. I think it’s really fruitful and it’s been really great for my audience, so I really appreciate you

32:00 Sam: Thank you for having me on Emily. Always a pleasure to work with you and the PhD community. I’m just here to help, so if you need help text me, call me bother me on the weekend. It’s all good. I just want to make sure you all are seeing some success here while you’re getting your doctorates.

32:16 Emily: Excellent. Thank you, Sam.

Outtro

32:18 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC podcast editing and show notes creation by Lourdes Bobbio.

Learn From This Poor Kid-Turned-PhD Student’s Different Perspective on Frugality and Debt (Part 2)

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In this episode, Emily interview ZW Taylor (Zach), a PhD student in Educational Leadership and Policy at the University of Texas at Austin. As a child, Zach identified as a “poor kid” and never thought higher education was for him. His upbringing and winding path through community college and his bachelor’s and master’s degrees taught him lessons about money that he has carried into his life as a PhD student – for better and for worse. In this second half of the conversation, Zach gives detailed and unique financial advice to prospective and rising graduate students on evaluating stipend offer letters and selecting housing. He was determined to not go into debt during his PhD, so he thoroughly investigated his stipend offer letter and the socioeconomic layout of his new city before accepting the offer. Finally, Zach shares his vision for the future of his finances once he’s done with his PhD and earning a significantly higher paycheck.

Links Mentioned in This Episode

PhD research housing

Teaser

00:00 Zach: If they want you and they offer funding, then in a different side of the same coin, they should be able to tell you specifically what you’re getting, because how can you budget, how can you plan without knowing what your income is? I mean, it’s incredibly important. So to your point, encouraging PhD students to be their own best friends and their own advocates and be very clear about what you’re getting before you go.

Introductions

00:29 Emily: Welcome to the Personal Finance for PhDs podcast, higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season five episode eleven and today my guest is Zach Taylor, a PhD student in educational leadership and policy at the University of Texas at Austin. Zach has such a unique perspective and so much wonderful advice that I’ve split our interview into two episodes, last week’s and this one. In this episode, Zach gives detailed and unique financial advice to prospective and rising graduate students on evaluating stipend, offer letters and selecting housing. He was determined to not go into debt during his PhD, so he thoroughly investigated his stipend offer letter and the socioeconomic layout of his new city before accepting the offer. At the end of the episode, Zach shares his vision for the future of his finances once he’s done with his PhD and earning a significantly higher paycheck. Without further ado, here’s the second part of my interview with Zach Taylor.

Financial Advice for Early Career PhDs

01:30 Zach: You know, in terms of advice for other early career PhDs, in terms of saving money and thinking about going to grad school, especially with the kind of frugal mindset is I was not going to go to grad school one, if I had any debt. That was just something that I had always thought to myself that if I’m going, again another childhood lesson, if I’m going to pay for it, I’m going to pay for it in cash and I’m not going to take out a loan. My best advice for early career folks who are thinking about the PhD is if you can work before you go to grad school and pay down any undergrad debt you might have. I know it’s not possible for some folks, but try your best to get some work experience and pay down that debt.

Further reading:

02:18 Zach: And then when you’re thinking about doing the PhD, do some of the same leg work that I did. Investigate the city — where is public transportation? Where are groceries? How can you get around? Talk with other folks who have been there for a couple of years. You know, one reason I came to UT Austin is that everyone was eager to give me their perspective. I mean, when I asked people how do you like living? How much do you spend? Where do you live? How do you get to school? No one held information back from me. Everyone was so willing to share because I think you want to help other folks out. So ask questions and be inquisitive and see where you can make it work financially. But then when you make that choice, I made the choice that I was going to go to a funded PhD program. I was going to work through. I wasn’t expecting just to not have to have an assistantship. I’ve worked all the way through, but I’m also not gonna have to take out any loans. And I think if you have the right combination of work experience and academic experience in certain fields, you can find those programs that are very, very low cost or no cost and be able to work through.

03:27 Emily: I just want to add a couple of comments on those pieces of advice, starting with your most recent one. So in the STEM fields and engineering, where I’m coming from, there’s this advice I guess, that people sometimes say to a prospective graduate students, which is that an acceptance without funding is a tacit rejection. Like if you are not offered funding along with your offer of admission, they don’t really want you there. And that’s typical in those kinds of fields. And at a certain, I’ll say tier of university. Not every graduate students — I mean some people do either take, you know, fully pay for their PhDs on their own, like there’s no funding package offered or they go into a situation where they know, okay, sometimes there’s going to be funding, sometimes there’s not going to be, or okay I’m going to have funding to a degree but I’m also going to have to do X, Y, Z to make up the deficit.

Emily: It’s really hard for me to ever say something as blanket as don’t go to a PhD program if you have to take out debt, because I just, I want to allow for individual situations. But I mean it sounds like from your perspective, even being in a totally different field than I’m coming from, you were still determined, I’m not going to go to graduate school if I have to take out debt. It’s just not going to happen under those circumstances. So you were very selective about where you applied slash the programs that you were actually considering going to, to make sure that you could make it happen in that way, even though it did in your case involve outside work as well.

What to Research When Choosing a Program

04:59 Zach: Absolutely. And one thing that I really insisted upon before I came and I don’t, know of too many other young PhD prospective PhD students who do this, but you really have to push the graduate coordinator or someone in financial aid. Know exactly what you’re getting. It’s really easy to say you’ll have an assistantship and it’ll provide a stipend. After taxes and benefits, how many specific dollars am I getting? When in the month am I being paid? Am I being paid biweekly or monthly? Am I paid over the summer? What are the opportunities for employment over the summer? As someone who is going to embark on a five or six year journey, they owe that to you. They have the information, they can provide that to you.

Zach: Before I came I was very, very explicit in saying, if I’m going to leave this job that I know that I like and I’m going to forego wages for five years and give up a salary and not be able to save any money, what am I specifically getting? What are the specific opportunities? And then matching them up with the area and saying, okay, I can make this sacrifice for four or five years. Yes, I’m going to forego wages and a savings, but I’m also not going to be in so over my head or I’m going to feel pressured to make choices that I wouldn’t normally make. And you know, Emily, to your point, it’s absolutely been the case in my experiences and other classmates that there have been times where they’re unclear about their funding package because it wasn’t made specifically clear when they were admitted. Kind of that tacitly, if you’re not fully funded, we don’t fully want you. If they want you and they offer funding, then in a different side of the same coin, they should be able to tell you specifically what you’re getting, because how can you budget, how can you plan without knowing what your income is? I mean, it’s incredibly important. So to your point, encouraging PhD students to be their own best friends and their own advocates and be very clear about what you’re getting before you go.

07:10 Emily: Oh my gosh, I’m so glad that you made this point even more explicit because it’s one that I talk about frequently during admission season. Check the show notes, if you are a prospective graduate student because there will be links there to further articles and workshops and resources that I have on that exact topic of figuring out exactly what your offer letter is saying to you and asking questions when there’s a lapse in information in the offer letter. And I mean, to your point, pay frequency. I mean that’s not even something that you would necessarily think about, but it’s really important once you’re actually on the ground and doing that budgeting. I’m super glad you brought that up.

Further reading/listening/watching:


Emily: But to go back to one earlier point would you mentioned which was paying off debt and working potentially before starting graduate school. I totally have to concur on this because, now student loans I’ll put in one basket, okay, because student loans can be deferred while you’re in graduate school, but other kinds of debt — credit card debt, car debt, any other kind of debt that you have to be making payments on during graduate school — do everything within your power I would say to clear that before getting into graduate school because the stipend is already so meager, you don’t want to have ongoing payments that you don’t have to, once you’re in that situation. And then of course the student loans in another basket, if it’s at all possible to pay down part or all of them are maybe the ones that the highest interest rate or just to make some kind of progress on that student loan debt, if you’re carrying a lot of it, before you start graduate school. It’s an amazing step to take. It’s a gift to yourself. Me personally, I had some student loans coming out of undergrad. I was sure to pay off all of the unsubsidized student loans before I started graduate school. The subsidized student loans, they’re not going to garner interest during that time. At that point, wasn’t caring about that so much, but I got the unsubsidized ones wiped off before I started graduate school. Just wanted to emphasize that point as well. Please go on with your other other advice for early career PhDs.

08:59 Zach: Yes. So this is more about where you’re planning to study and how you can kind of network beforehand. You brought up a great point that I want to hit on again about where you’re living and how much you’re paying and understanding kind of the socioeconomic context of not the university, but the city. Austin, like you said, is really rapidly growing and I applied across the country. I applied to Indiana, Vanderbilt, Stanford, Michigan, Princeton, Cornell, all over the place. But I was really specific about researching Austin when I got in because I knew how rapidly Austin was growing. And to give you an idea of the cost of living increase and how much graduate students are actually paid, I moved into this current one bedroom apartment back in the spring of 2017 for $960 a month and I am a one hour commute from campus. So I’m one hour away for $960, with utilities it’s about $1200 a month. That was a sacrifice I made. However, these apartments now go for $1310. So they have increased almost $400 in two years. And I’m still one hour from campus. If I was arriving to Austin today and having to sign a lease today, I would pay almost $400 more than I would have paid just two years ago. Now you had talked a 10% increase — 30% increase, 40% increase. And these are not….we don’t have a garage. We don’t have a private yard. We don’t have too many amenities. It’s a pretty standard one bedroom apartment with air conditioning, but it’s also an hour away from campus.

10:53 Zach: I always host PhD students in the spring who are prospective students. And I always, when I show them apartments, I ask not only for the current rent because a lot of major cities have market rent, which means it changes, with the ebbs and flows of moving season throughout the year. Don’t only ask for the rent now and move in, but ask for it three years prior because they have records of all the leasing contracts and all of the, um, leasing and rental agreements. So you can see how rent has changed and gone up or gone down in a certain area. And actually I just helped a friend from Michigan move in just the other week and he and his partner made a very specific decision to go to a certain complex and neighborhood because the rent had been somewhat stable over the past three years and had only gone up about $180 over three years. Whereas my neighborhood is in a different kind of more developing area of Austin and it is growing like crazy.

Zach: Especially when you’re moving into a new city, getting an idea of historical trends and then do the exact same thing for the stipend. How much was the living stipend, how much was the assistantship five years ago? What does it now and do you anticipate a cost of living increase and is that going to be compensated by the university? Something that UT Austin recently did was dedicate new money to try to keep up with cost of living and try to develop some new graduate student housing, which we haven’t really talked about, but always inquire about graduate student and subsidized housing because some universities still do have it. Even though in a very landlocked, city locked university like UT Austin, there’s not a lot of room for expansion anymore, but always ask about the cost of living increases in historical rent in the city, how that relates to the stipend from the university and then what the university is going to do to keep up with that cost of living. I couldn’t agree more.

12:56 Emily: Yeah. I’m so glad you made that point.

Commercial

13:02 Emily: Emily here for a brief interlude. Tax season is upon us and while no one loves this time of year, it’s particularly difficult for post-bac fellows, funded grad students, and postdoc fellows. Even professional tax preparers are often thrown for a loop by our unique tax situation. And don’t get me started on tax software. I provide tons of support at this time of year for PhD trainees preparing their tax returns. From free articles and videos, to paid at-your-own-pace workshops, to live seminars and webinars for universities and research institutes. The best place to go to check out all of this material is pfforphds.com/tax that’s P F F O R P H D dot com slash T A X. Don’t struggle through tax season on your own. Visit my website for the exact information you need in the most efficient form available. Now back to the interview.

Understanding The Role of Cost of Living Increases

14:05 Emily: Really, a new idea for me is actually asking about those historical rents and seeing the increases. This might be a silly question, but does Austin have any rent protection in place? Like increases can only be a certain amount over time, like in terms of laws in place?

14:21 Zach: Not that I am aware of and it doesn’t seem to have translated to people who have actually been into leases and stayed multiple years. Our rent has only gone up $60 in two years, but for the same apartment, for new leases, it’s that new elevated price. However, and this to me was just absolutely ridiculous, I was actually outraged by this, that we have a valet trash fee that is mandated. That we have to pay $14 a month to have somebody pick up our trashcan outside the door and take it to the dumpster. Now the dumpster is a half a block away and I don’t want to pay for valet trash, but I have to because it’s part of the lease and it’s an industry that Austin supports. So there are some fees — you know I’ve heard a lot about the fee creep and higher education where you might have a tuition freeze, but you can keep charging student fees and those add up. The same thing happens with amenities and fees in Austin. The trash fee has gone up, water has gone up, electricity has gone up. It used to be that we would come in a close to $100 over the summertime for air conditioning. Now it’s closer to $140 or $150, and it’s a dramatic increase. So not only understanding the rent, but really understanding what fees you have to pay, what are mandatory, what are optional, and then how those feeds are going to be adjusted over time, because in some big cities they’re just mandated and you just have to bite the bullet and pay for them even if you don’t want to. But those really add up just in fees. We pay an extra $95 or $100 a month just in fees.

16:09 Emily: Yeah. What I’m getting from this part of our discussion is just the importance of interrogating every single component of your offer, of what your living expenses are going to be. And all the time that you put into researching these different components before you actually move to the city that your graduate school is in, or after graduate school, same story, it’s really going to be worth it. It’s going to pay off when you do this research, because the less you have to learn on the ground once you’re there and make changes, the easier it’s going to be. If you can find a place you want to live for several years right from the beginning, it’s a lot easier for you. I did want to go back to make one other point from what you said earlier about asking about the historical stipends. I definitely think you should and can ask a graduate program that, but I wanted to plug my own website, which is PhDstipends.com and also I have another one for postdocs, postdocsalaries.com. PhD Stipends has been around for five years now, I think. And people enter which academic year, the stipend their listing is for. So if your university has enough data in there, you definitely can look back, even potentially at your own department and see what they were paying five years back to compare it to what’s in your offer letter.

17:24 Zach: Yeah, absolutely. And to your point about having that access to data and actually seeking that out, now that you mentioned that, I don’t know anyone else who did that when they came. A lot of folks were really excited just to be able to come to Austin and to be in a PhD program. It’s a very highly ranked program. It’s very prestigious around the country, so a lot of folks were just happy to be there. But then down the road they really kind of regretted not understanding where they were going to live, how much they were going to make. Also the time crunch in making a decision. I had to make my decision in a series of three or four weeks. I mean really in graduate student visits when I was admitted to PhD programs, I the beginning of February really until about mid-March to visit places, do my research. So also understanding how that’s going to affect whatever job you have at the time.

Zach: When you’re exploring PhD programs, it is a serious time commitment. I mean just finding a PhD program in a city that fits you and your budget and that you can continue to maintain your expectation of living whatever that is, is like a full time job. It’s like being on the job market and people should take it with the same seriousness and explore all of those resources that they can because like you said, I have been very, very fortunate. It was some good planning, but I’ve been very, very fortunate not to have to move every year, not to have to sublet. That means my computer workstation has stayed the same. I have a routine. I’ve been able to write. I’ve been able to travel because I haven’t had to worry about where I’m going to live, how much money I’m going to make. It’s all very budgeted, all very meticulous and I think that has really made the PhD program a much more fulfilling experience, because like you said, I have gone through those hoops initially to make sure that I was in a place that I could afford and I would feel comfortable in.

Final Words of Advice

19:24 Emily: Yeah, absolutely. I’m so glad that you brought up that point as well. Any final advice for other early career PhDs?

19:31 Zach: Yes, so I guess lastly, and it’s kind of more of a philosophical point, is I did make the choice not to go to a PhD program that wasn’t going to financially support me. And I think, most people who pursue a PhD, it’s right in the prime of their earning potential, right? So you’re talking early twenties to anywhere in the late thirties like that 10 to 15 year period, you can make a lot of money during that time of your life and pay down a lot of debt. You have to understand that going and getting a PhD, you’re going to forego wages and you might take on debt. It’s such a double edged sword because you’re losing money on one hand, and you’re kind of having to borrow more money. So really, really committing and making that sacrifice, because understanding how many hundreds and thousands of dollars you may be foregoing in the future, and having to pay back debt, and having lost wages.

Zach: The sacrifices I made were having a very compromised social life and a very kind of frugal living down here because I knew it’s going to be four or five years of just extreme sacrifice. I am not going to go out. I am not going to go out to eat very often, I have only gone out for drinks three times in three and a half years and all three times were for professional networking, and to work on projects. I just don’t do it. A margarita is $12 and that’s my food budget for almost an entire week. I have made that kind of level of commitment to stay out of debt and to do it frugally. Not everyone can do that, but if you can commit to doing that, you can get out without debt or with very low debt and 10 or 15 years down the road, you’ll really thank yourself, and you’ll look back and you’ll realize, you know what? I think that sacrifice was worth it.

21:27 Emily: Yeah, I think so. I mean your point about opportunity cost is a very, very important one and not something that people, I think think about enough going into PhD program. For me, it’s another reason to work before you go into a PhD program because you have a better idea of what you are giving up on the one hand in terms of salary potential during that time. And you also have more context for your PhD work. What is this going to do for me on the career side?

Financial Plans After Grad School

21:51 Emily: I’m gonna surprise you with one last question, Zach. This is not what I prepared you with, but what do you think you’re going to be doing with your finances once you’re done with the PhD? And hopefully, you have a job you enjoy that pays you much better than whar you’re being paid right now. Do you see yourself shedding some of these mindsets and habits that you’ve carried with you to this point? And if so, how? How can you even step away from this since it’s been going on for so long in your life now?

22:22 Zach: Yes. It is such a lifestyle. I cannot emphasize that enough. I have thought about what I want to do with my money when I graduate and get a job and now I don’t have debt and the money is mine to spend. I don’t want a larger than two bedroom house because I’ve never lived in a place larger than that. I wouldn’t feel comfortable in a four bedroom house in the suburbs. That’s just not me. I would not feel at home there or comfortable. I could never buy a new car. I could never do that. I would not feel comfortable driving in a 2019 anything. I’ve always bought used cars. I wouldn’t even feel comfortable doing that. If you remember actually from HEFWA, though, what is really, really important to me is donating. I wanted to stay out of debt and get a PhD and have the earning potential to donate to certain programs that I was a part of as a kid and that really helped me out. I think when people are asked about “why do you save money?” I saved so I can give more. Since I’ve been a PhD student, I have been able to donate about $700 to my alma mater and a mentoring program that they have going that I was a part of when I was there. For me, that is such a better use of the money instead of going downtown a couple of weekends and having drinks. I feel so much better about it.

Zach: I think having an understanding of the kind of money I will make when I’m done and then how I’ve grown up, it’s going to allow me to do a lot more good and amplify a lot of the philanthropy that I’ve started doing, and that is really how I’m going to be spending a lot of my expendable income as you could say. I’m going to start a savings account. I’m going to start a 403B or a 401k or some employer sponsored a savings account. If there’s a state pension program, I’ll participate in that. But it’s really going to free me up to spend money where I think it needs to be spent, which is education and low income kids. And like I said, I’m going to look back on my time at UT and Austin and say, maybe I was able to send some kid to community college because I didn’t go out. I was able to help some kid get their associate’s degree because I made those sacrifices and I will trade that any day of the week.

24:56 Emily: I’m so glad to have that incredible perspective from you on the podcast today. It sounds like a really bright future and happy for you that you’ll be finished quite soon, and you’ll get there before too long. Zach, it’s been an absolute delight to have you on the podcast today. Thank you so much for joining me.

25:16 Zach: Absolutely. Thanks Emily.

Outtro

25:18 Emily: Listeners, thank you for joining me for this episode. PFforPphDs.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. Three, recommend me as a speaker to your university or association. My seminars covered the personal finance topics PhDs are most interested in, like investing, debt repayment, and taxes. Four, subscribe to my mailing list at PFforPhDs.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

This Grad Student Defrayed His Housing Costs By Renting Rooms to His Peers

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On today’s episode, Emily interviews Dr. Matt Hotze, an administrative director at Rice University and co-host of the Helium podcast. When Matt moved to Durham, NC for his PhD, he immediately purchased a 3-bedroom house and rented the two extra rooms to his labmates. The rent Matt collected from his two housemates covered nearly all of his mortgage payments during his years in grad school, though he had some financial bumps in the road as well relating to house repairs and his dual relationship with his housemates. Ultimately, his decision to sell the property also hinged on his personal relationship with his tenants. Matt shares the overall effect this investment had on his finances and his three key pieces of advice for another early-career PhD considering this route.

Links Mentioned in the Show

PhD landlord

Would You Please Tell Us More About Yourself?

Matt has a PhD in environmental engineering. His advisor moved from Rice University to Duke University near the start of his PhD. He purchased a home in Durham when he moved there in 2005. After he finished his PhD in 2008, he did a postdoc in France and then another postdoc at Carnegie Mellon. Subsequently, he had a career in publishing with the American Chemical Society, serving as the managing editor for four journals, where he learned the business side of science. Currently, he works at an engineering research center at Rice with 80% of his time, and the other 20% of his time is dedicated to the Helium Podcast.

How Were You Able to Purchase a Home During Grad School?

It is no mean feat to buy a home during grad school!

Further reading: Purchasing a Home as a Graduate Student with Fellowship Income

First, Matt was “blessed” to not have any debt from undergraduate degree.

Second, when he started grad school in Houston, lived with his parents for most of his first year and banked much of the stipend. Living with his parents in the suburbs was cheaper because the distance from home to campus impeded going out and spending on entertainment. His motivation to save money was due to his upbringing; since he was able to save, why not do so? He expected there to be some use for it eventually, though he didn’t have specific plans to buy a home when he started. Saving the money wasn’t a big sacrifice as living with his parents was comfortable.

Third, in 2005-2006 the houses in Durham were not that expensive. This was after the dot com bubble burst in early 2000s and the housing crisis hadn’t hit yet. Matt hadn’t necessarily planned to buy, but he saw that the nice, recently built apartments were rather expensive to rent.

Though Matt had enough money for a 20% down payment, he still needed his parents to co-sign his mortgage because his income alone wasn’t sufficient to support the mortgage payments. He bought a modest 3BR home and rented out the other two bedrooms for below market rate. The purchase price for the home was approximately $200,000.

Further listening: How to Qualify for a Mortgage as a Graduate Student or PhD, Even with Non-W-2 Fellowship Income

Matt bought the house even before he moved to Durham, so he never rented there. He felt he was on a time clock to own the home for long enough during his PhD to make the transaction costs worthwhile. He decided he would either buy right when he arrived in Durham or he wouldn’t do it at all.

Emily had a similar thought process a few years into grad school when it might have been possible to buy, but since she was already a couple years into grad school she decided against buying due to the time clock.

Matt’s first tenants in Durham were the other grad students in his lab also moving with his advisor, which also influenced his decision to purchase right away.

What Were the Pros of Renting Out Rooms to Peers?

1) Matt had almost zero housing expenses as the rents from the two bedrooms basically covered the mortgage each month.

2) Matt’s house became the gathering spot for his grad school friends, so instead of spending money going out they would drink beer and play board games at home. (Emily had a similarly inexpensive social experience in grad school.)

3) Didn’t have any issues with the great majority of his tenants.

What Were the Cons of Renting Out Rooms to Peers?

1) Once Matt moved on from his PhD, he didn’t know his tenants quite as well. One of his tenants asked to pay his rent late a couple times. It wasn’t possible to handle this completely professionally because of the social ties between him and his tenants. This did end up working out, but it was stressful to handle this, especially from afar. Matt was especially concerned about being fair to all his tenants but not establishing a precedent that it’s OK to pay the rent late. The rental agreement between Matt and his tenants was helpful in this case, not only the legal components but also to set expectations.

2) The home inspector didn’t catch some flashing around the chimney, so a water leak developed soon after the purchase. Matt used some additional cash he had on reserve (~$500) for this repair, so it was a good thing he hadn’t used all his cash on the purchase. Another time, the water heater exploded. Thankfully replacing it didn’t cause an issue because Matt already had cash built up for these kinds of repairs. Emily references the 1% rule: You can expect to pay 1% of the home’s value in maintenance/repairs each year – but that’s only an average! It can be much higher or lower in any given year.

Why Didn’t You Sell When You Left Durham?

When Matt left Durham for his postdoc in France, it was not a difficult decision to keep the property. He still had tenants in place who would take a couple more years to finish their PhDs, and with three rooms rented out the property was now earning money above expenses. One of Matt’s friend-tenants served as the property manager so he didn’t have to hire a professional company.

At the end of grad school, Matt had a good amount of savings built up, and after the postdoc he had even more saved. This really set him up to be financially successful in subsequent stages of life. He lived in Pittsburgh for his second postdoc. When Matt married his wife and combined their finances, he was able to significantly contribute to their nest egg. It was great to not have to worry about (non-mortgage) debt.

All of this financial success came from the germ of financial parental help during college and that first year of grad school. Good financial fortune and bad financial fortune early in life do not guarantee any particular financial outcome, but certainly put momentum behind your finances one way or another.

How Did You Decide When to Sell the House?

When his friends finished their PhDs at Duke, Matt no longer felt able to hold on to the property. He didn’t have the bandwidth at the time while working in an intense postdoc position and applying for faculty positions to figure out how to hire a property management company from afar. Deciding to sell was really a trust issue. If he didn’t trust his tenants through personal relationships, he didn’t want to be a landlord any longer. It’s not always about numbers, sometimes it’s more about your feelings!

Matt ended up selling in 2009, which was pretty bad timing with respect to the national economy. He sold the house for just about the same price that he bought it for. Even without the property appreciating, the financial benefits he experienced through those years made it a good financial decision. Even though he didn’t make any money on the house, he defrayed all his housing costs when he lived there and continued to make money afterwards.

What Advice Would You Give to a Grad Student or Postdoc Who Is Considering Buying a Home and Renting Out Rooms?

1) Use a calculator to figure out whether buying and renting out rooms in a home makes sense financially in terms of the costs you will incur and the rental prices.

2) Are you OK having uncomfortable conversations with your tenants? Someone will inevitably not pay rent or break something or something stupid in the house. This will happen whether you know the renters or not!

3) Are you comfortable making basic repairs on your own? It’s expensive to outsource it all the time! Are you able to talk with vendors and negotiate? This is a needed skill.

4) What’s your gut feeling on owning rather than renting? You’ll make a good decision!

What Is the Helium Podcast?

Christine and Matt co-host the Helium Pocast. They help early-career researchers – senior grad students to early faculty – navigate the transition from grad school into first faculty position, from landing the position to navigating the position to advancing within the position. They bring on interviewees to talk about career transitions. Check them out! New episodes come out every Tuesday.