Starting out in Denver: House Hack or nah?

15 Replies

Hi BP Community!

I’m just starting my real estate journey, and I’m not sure which direction to head. The only steps I’ve taken so far are to listen to the podcast every day, read the Ultimate Beginner’s Guide, and start moving my down payment money into something that will generate higher returns while I look for my first deal. My hope for this post is that I can tell you all where I’m at and get some advice about what my best moves would be.

I moved to Denver two years ago, and I’d like to invest locally. I’m a public school teacher, so I’d like to capitalize on any special mortgage rates for teachers and first time home buyers. I’ve been looking at this a bit, but I’m not sure how to go forward. Do I proceed with my bank to see what I qualify for, or do I seek out programs like “Teacher Next Door”, which claims to specialize in getting grants and low rates for teachers?

The hope for this first deal is to house hack, but, from what I've heard and seen in my limited research, it looks like most multifamily units in metro Denver have been converted into condos and sold accordingly. I'd like to find a multifamily house that cash flows well and BRRRR it into another deal. Investors in Denver: is this possible with enough research, networking, and lead generation, or would it be better to find myself a cash flowing single family unit so that I can make this deal happen sooner and build equity?

Any advice is welcome advice. Right now I’m focusing on educating myself, but I know that I need to take action ASAP or risk falling into the trap of diminishing intention.

Thanks I’m advance,

Luke

Look for a 5 bed with at least 3 baths(3/4 or more). Forget the multifamily. See what you qualify for first before wasting time looking. Price range will determine a lot. 

Hey @Luke Gates . If you're up for it, I'm available to talk more about the Denver area and what the recent market data is telling us. I sent you a request to connect. The Realtor data is showing us trends that might influence how you put together your business plan.

@Luke Gates

Similar to what @Matt M. said, I own 3 communal homes that started out as house hacks. They are rented by the room in the Denver area. They all have great cash flow and I agree with Matt that this is the better method to purchasing a home and having your mortgage covered by the other residents. It does, however, require more management and your expenses will be higher (monthly and cap ex). But I've always found that the benefits of this type of investment outweigh the drawbacks.

@Luke Gates :


 I’m a public school teacher, so I’d like to capitalize on any special mortgage rates for teachers 

Law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD's Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence.

https://www.hud.gov/program_offices/housing/sfh/reo/goodn/gnndabot

 

Thanks Alex. I found that program and would love to get in on it. The problem is that they don’t have a single property listed in the whole state right now, but I’ve been continuing to check on the site. I’ve seen some people post that the program is dying out due to a lack of foreclosures. 

Originally posted by @Luke Gates :

Thanks Alex. I found that program and would love to get in on it. The problem is that they don’t have a single property listed in the whole state right now, but I’ve been continuing to check on the site. I’ve seen some people post that the program is dying out due to a lack of foreclosures. 

It's been slim pickings for years from HUD. I got my home via HUD in 2013, and it was a steal even then.

 

Thanks for weighing in @Lia Martinez . I appreciate the advice. I think that will be the best route for me to go. Have you found it to be challenging living in a unit while renting out the rooms? I've been living without roommates for the past two years and am very hesitant to go back. I imagine the dynamic would be interesting to share a house with people while being their landlord. 

@Luke Gates I've never lived alone, so I'm probably not the best person to judge whether it's difficult or not. I prefer to live with others whether as the homeowner or not. I find that by living in a community with different people, I am more physically active, mentally engaged, and life is overall better. My husband and I share a room and the other 6 rooms are rented to others in my current home. 
I actually had to give one of my friends and housemates notice yesterday because he had been speaking negatively about another resident and had brought illegal drugs into the house. He was sad and so was I, but he understood that I always need to do what I think is the best for the community. In my experience, other residents do 'tiptoe' around you at first as homeowner, but once you share a couple of beers or bottle of wine together, everyone is friends and community is formed. 

Originally posted by @Luke Gates :

Thanks Alex. I found that program and would love to get in on it. The problem is that they don’t have a single property listed in the whole state right now, but I’ve been continuing to check on the site. I’ve seen some people post that the program is dying out due to a lack of foreclosures. 

12 CO properties are listed:

https://www.hudhomestore.com/Listing/PropertySearchResult.aspx?sState=CO&sLanguage=ENGLISH


 

@Alex G. Thanks for trying to find me a good deal. Unfortunately those twelve houses are not eligible for the Good Neighbor Next Door program. If you switch the buyer type to “Good Neighbor Next Door”, nothing is listed. I would love to be wrong about this though. If anyone sees something I’m missing please point it out.

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