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Dan Kelley
  • Rental Property Investor
  • Leander, TX
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Denver House Hacking - What are the norms?

Dan Kelley
  • Rental Property Investor
  • Leander, TX
Posted May 17 2017, 06:08

To make a long story short, my wife and I are starting to set our sites on the Denver area to move within the next year or so. I'm self employed currently but I'm looking to sell/close down my business. We have a 14 month old and another due in June. If/when we move, I'll be looking for a job as an automotive technician (for which there seem to be an abundance of in Denver) and I'd expect to make approx. $60k-80k/ year. My wife will likely not work after the move as child care for two kids almost makes working pointless. We are currently in Iowa.

My current experience: I'm owner occupied in a duplex and I own a 6-plex that I self manage which is currently under renovations. I would probably sell the duplex and either sell the 6-plex or put it under management and cash-out refi. and hopefully pull at least a good 20-40k cash out of it. 

My questions for you are:

1. How would a lender in the Denver area determine my eligibility to afford a property? I found a 4-plex in the Denver area for $569 with all 2/1 units that I think would be ideal to house hack, but I know I wouldn't be able to "afford" $569k mortgage if they aren't considering the income of the 3 occupied units. Am I correct, or will the bank consider those units even if it's on a 30yr residential note? I have experience with commercial mortgages where your personal income doesn't really matter, it's the deal that matters, but I'm thinking residential doesn't work that way?

2. Is it common in Denver/ surrounding suburbs for tenants to pay all utilities or does it vary greatly by property?

3. In the event that I would want to move the property into management, what is a typical rate that companies would charge in Denver for a multi?

If you have any other input on getting started in the Denver area, it would be much appreciated. Also, any areas to avoid or areas that might be up-and-coming would be great as well.

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