House Hack help in Denver metro?

13 Replies

I am hoping for ideas here. My situation is, I currently rent, through next March. I have an option to buy on the townhome I'm in, for about $20K under current sales, but by the time I get HOA and PMI on it, I can't qualify. And it really doesn't fit my needs.

I'd like to house hack a MF.  Ideally, further SW than Aurora, but I'm open.  I know that in Denver metro I'm not going to house hack and get to live free.  I'd like to do it, and keep my payments close to what I pay in rent.  I'm good with a dump that needs work.  My husband has done MF maintenance, and I have contacts in maintenance for anything we can't handle.  I'm good with something that has problem tenants. Handled quite a few of those.  I'm willing to take on considerable risk.  I have very good to excellent credit, but not a lot of cash.  I've seen a lot of people here say "save up a down" and "have a good cushion."  I dont have those options.  I'm surviving on a single income in a dual income town. 

I'm hoping maybe someone sees an opportunity that doesnt fit their goals, but might work for me.   Or someone who is moving out of the small MF category into something else.  Or something someone is just tired of.   Or any other ideas someone with more experience has.  

I'd also like to talk to someone who invests in the downtown area. I have a friend who is looking to retire out of the country within the next year. She owns a lovely large home in the down town area, that is zoned for a duplex. It will need some work but from my inexperienced eyes, it would BRRR. I can't touch it, but someone else might be able to.

What about lender paid PMI? What do you qualify for? True MF is probably out of your reach unless you are approved for $350k+. House hacking something with a separate living space is probably your best bet.

I'll PM you about the downtown property. 

yeah I can't qualify for $350K on W2.  I would need something that I could use the rental as income.  I found one duplex in Sheridan, I might be close to, but the numbers are tight.  I'm looking at lenders that do LPMI now.

Yes MF is crazy here in Denver, low supply and high demand, coupled with high ask prices. Many of the quadplex's and duplex's I have seen come on the market may not even make sense house hacking with what people want for them. Even further south in Colo Springs, quad's come on the market for 399K ask needing rehab work in undesirable parts of town and get snatched up. I looked at a duplex in Denver a few weeks ago that had structural issues and even though it had been on and off the market for 6 months and they had come off original asking price considerably, it still did not make sense unless you could get it 20% under current ask or unless you had a GC that was a whizz at foundation repair.

Consider looking at non-traditional MF, i.e. I heard about a house hack a couple was doing in North Aurora whereby they were renting the 1st floor and going to live in the basement after putting a few K into it to get it ready. They basically turned a SFH into a duplex.

I was looking at something in that regard.  A duplex, but both sides have basements that are unnecessary to the upper, and potentailly have a way to separate.  I sincerely doubt I could get it legally converted to a 4 plex, but was wondering how nasty the city can get.  

Yeah, I've looked at the Springs too.  It's about equidistant from the grandkids, but wayyy to far to commute to work, and so far, I'm not seeing a job there, especially when you look at staying in the "same field".   I don't know the areas, but still didn't see anything that looked like I could make it work.

Still looking.

@Terre B. If the current townhouse won't fit your needs, don't buy it. Unless it makes sense both financially and personally to live there and move out after a year (which is typically what owner-occupy loans require.)

As @Buckner Toney pointed out, multi's don't make sense to house hack. 

We've been focusing on two types of properties for house hacking:

  1. 5+ bedroom homes in the burbs. More beds = more heads. Rent them by the room and it's possible to cash flow $500-$1000 /mo while living for free. Then when you move out, keep renting room by room or just rent to a family. There are a lot (a lot for Denver!) of these properties on the market.
  2.  Single family homes where previous owners have added a second living space or has the opportunity to add on. I'll send you a private message with a link to one I looked at a client with last week.

My advice: don't get tunnel vision on multis! There are better opportunities out there in the current market.

Thanks for the reply, Chris. I can't do a SFR and rent rooms.

We rented a room to a young man who was a student at EcoTech in 2012.  He attacked my husband, resulting in a broken neck and skull fracture.  I can't blame my husband for now insisting that our space be ours. It's been a challenge getting him in on the duplex plan. 

What do you think of 3415 S Canosa Ct?  

Hi Terre,  your situation sounds like it has a lot a twists and turns to make it work. Are you working with a Realtor that can help you find the right situation.  There are amazing realtors on this site and they usually have a few great lenders that can help to handle your situation. Since as a buyer, in most cases, you don't pay the realtor you can get some great advice from the right realtor who can help you walk through your situation with their expertise. 

Yes, Kevin, lots of twists and turns.  Much like my husband always said...I'm difficult.  LOL.  

However, I do think, thanks to BP, I have found a realtor who understands where I am coming from and where I'd like to go, and may be able to point me in the right direction.

No, unfortunately we do not qualify for a VA loan. Ideally, looking for something like the Bank of America 3% down, but not sure if that will combine with a down payment grant. If not, then FHA/CHFA using the 75% rental income to help qualify?

Or am I being totally unrealistic?

Just a thought, you might be able to turn that purchase option on that property you're renting into some cash. You might be able to assign that 20% option to purchase to someone else as a 10% reduction for them. You pocket the other 10% and get some help with your down payment. I know a lot of people in the Denver metro area that would do about anything to get a property with 10% off. Good luck.

I had wondered if there was something I could do with it.  Debated taking the risk of making some improvements while I'm in it....flooring, paint, etc. and trying to house hack it, but didn't think the margin was there.   I hadn't thought about selling the option.  

Hi Terre, 

Have you had any success in the last two months? My family is moving to the Denver area in December and we'll be in corporate housing for a couple of months, but I'm hoping I can find a house hack in a short time frame. 

I'm considering doing an FHA 203k to build some equity on a fixer upper - if I can rent out part of it, that would be ideal.