Wary First Time Investors

[Bryon Fugitt]

My wife and I are 60ish and have never invested in real estate (other than our primary homes). We'd like to get into it but are wary. I have done a few estimations via BP and I think because they were MLS listings, they weren't good evals (cashflow wise). We're from MI and spent the last 3 yrs renting in CO. We're at tail end of summer in MI. This month, we plan to return to Colorado maybe COS area. We'd need a primary residence and want to get into investing. Would like to do both at once (ie house hack) but not hung up on that idea. We're hung up on pulling the trigger without screwing up to the point of losing savings and throwing in the towel.

[James Carlson]

@Bryon Fugitt

I hear two different goals and they may collide with each other. One, you want a primary residence in Colorado Springs that you can house hack. Two, you want to cash flow. Those aren't always compatible, depending on what style of house hacking you want to do.

Don't mean to stereotype, but at your age -- hell, at my age of 40 -- most people aren't excited about taking roommates. If I'm wrong, and you are open to renting out a house by the room, then you may be able to cash flow. Obviously the more rooms you get the better it looks. If you can find a 4br and you and your wife rent the other three bedrooms at, say, an average of $750, then your rents are $2,250. That will offset a healthy mortgage and may even cash flow. 

Now, if you're not interested in having other humans in your space at all times (again, that's me), then you'd want to find a home with a basement apartment and separate entrance or walk out basement. Or even a carriage house/mother-in-law type setup. Those aren't super common but they come up often enough in our searches that several of our Colorado Springs house hacking clients have nabbed them. In this scenario, if you're long-term renting that separate space, then you're offsetting your mortgage, but maybe not cash flowing. However, if you decide to Airbnb or short-term rent that space, then you may be able to live for free or even cash flow a bit, depending on that size, condition and location of that separate area.

And you didn't ask this, but I'd throw out another thought: Don't overthink it. Find a good agent (ahem, ahem), establish clear goals, and nab a place. Every month of rent is just lost money and lost appreciation in a hot market like the Springs.

Whatever you decide, I wish you luck! Cheers.