College Student wanting to get into house hacking in Colorado
Member since 2023 · 5 posts · 8 votes
College Student wanting to get into house hacking in Colorado
Most Popular Reply
Real Estate Agent · Loveland, CO · Member since 2016 · 85 posts · 26 votes
3yQuote from @Tucker Myers:
I am a college student graduating in December 2023. I have a great job lined up as a financial advisor and will be working under a team as an intern this summer. Once I graduate, or even sooner if possible, I would like to purchase a multi-family home. Real estate is crazy expensive in Colorado, and I would like to know any tips anybody has for me.
Hey Tucker!
Smart decision my friend. You should talk to @Lorenzo Prieto he's a local lender in Greeley and has first hand experience doing house hacking.
I'm also a local agent in NoCo and would be happy to meet up with you and your girlfriend to discuss different options. If you search biggerpockets networking events I just added our April event. It's really laid back and great for investors of all types!
27 Replies
- Rental Property Investor · Worcester, MA · Member since 2018 · 131 posts · 135 votes3y
Talk to a lender first to see when you will qualify for a loan, they want a certain amount of work history to approve you.
Then find somewhere with a decent multifamily inventory that you could live. If its expensive where you are you may have to sacrifice a long commute to find somewhere with better deals.
- Real Estate Agent · Boise, ID · Member since 2016 · 1k+ posts · 888 votes3y
@Tucker Myers get your finances in order if they are not. Make sure your credit is good or improving. Save Save Save. Cash makes things easier from traditional lending to creative deals. You likely won't be able to get a loan until you have some time in employment, so unless you go creative that will be the hold up. And even going creative they are going to want to know you can pay.
While you are saving and getting your finances in order start educating your self on everything you can about the area you will be in and start networking.Best of luck!
- Member since 2023 · 5 posts · 8 votes3y
@Chris Davidson @Brandon Gale Thank you both so much for replying! My finances are definitely in order. I have excellent credit, but I need to talk to a lender to see when and how much I qualify for. What would you recommend for a lender? Thanks again!
- Real Estate Agent · Boise, ID · Member since 2016 · 1k+ posts · 888 votes3y
@Tucker Myers Being an agent I am biased, but I would reach out to an agent and see who they recommend as they likely have done many deal with them and know they can perform. Or find a mortgage broker in your area and reach out to them.
Doesn't have to be local though.
- 3yLaura ShinklePro MemberRealtor · Charlotte, NC · Member since 2017 · 357 posts · 292 votes
@Tucker Myers I would actually start with finding a Realtor that is familiar with househacking and can guide you on locations to look as well as good lenders to help you navigate the loan and figure out what you need to do/how long you need to be employeed before you can qualify.
I am not familiar with the Fort Collins area, so I can't speak to what kind of inventory there is. That said, I would recommend that you be flexible when you're looking and not try to force a certain strategy. By that I mean, if multifamily properties aren't available and/or too expensive, look for something that has a second unit in the basement. or above a garage. Maybe get a construction loan to add value AND add the second unit. Maybe you'll need to househack a SFH and have roommates. maybe those roommates should be a mid term or short term rental rather than a long term roommate. Do what the market tells you will be the most feasible and makes sense financially.
Best of luck!
- 3yDerek BrickleyBusiness MemberLender · Ann Arbor, MI · Member since 2021 · 665 posts · 226 votes
Hi Tucker! You say you have a good job lined up, do you have an offer/employment letter? I am not licensed in Colorado, but having that letter will be good enough. In most cases, you will probably need to receive your first pay stub once you start working, but there is no reason you cannot start the process now. In certain circumstances, you may be able to close up to 45 days before you start, but you would need to talk details on what you’re goals and plans are. Hope this helps! Definitely reach out to a lender or a realtor who can recommend one. The company I work with, Gold Star mortgage, definitely has an office out there but I’m not sure how investor savvy they are
Gold Star Mortgage Financial Group548 Reviews - Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes3y
Awesome that you're already thinking about this. Congrats.
As others have said, talk to a lender first. You need to know what you qualify for. After that, the biggest piece of advice I have is to not overthink it. Buy a 4-5br home, maybe with two separate living spaces, so people can spread out a bit, don't furnish too much (you want them moving their own stuff in so it's harder for them to up and leave). You'll charge anywhere from $700/room to $1,000 (for a basement room w/ en suite that feels more private), and you should cover your mortgage plus some.
You obviously want a place that's in good condition and in a decent enough area, but the sooner you buy, the sooner the clock starts for you to repeat this in a year or two. And adding another property in a year or two, and then another and another is how you grow quickly.
Good luck!
- Member since 2023 · 5 posts · 8 votes3y
@James Carlson Thank you for the fantastic advice! I am planning on moving to the Aurora area once I graduate. Hopefully, we can stay in touch.
- New to Real Estate · Portland, ME · Member since 2020 · 13 posts · 1 vote3y
depending on a if your salary or hourly you may be able to get pre qualed on future income, you might need to get it in writing from your employer. This is what I did before however im in the military and was able to show my lender proof that I am advancing to my next pay grade and then he was able to go online and see my future salary since it is all public info. Definitely try to get a lender that is familiar with house hacking, you may have to shop around a bit but you should be able to find one that lets you use 75% of the rental income from the tenant units to help you qualify. Good luck man!
- 3yRyan ThomsonBusiness MemberReal Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
I wish I was thinking like you in College! Here is an interesting idea. Use your knowledge and drive to convince your parents (or other co-signer) to get a home near your college. Co-sign with them and put some money down with them if you can.
Buy it as YOUR primary residence with your parents as the co-signers. This would allow you and your parents to only have to put 3.5-5% down. Then you rent out the rooms to your college friends. This will probably allow you to live for free and your parents to avoid a dorm or expensive home payment while you are in college. Not to mention you can both cash in on appreciation and loan paydown.
If you really wanted to scale, you could do this each year. Rent out the last house to a new group and move with your friends to the next house. This is a great way to scale and you only have to put 5% down if its your primary residence each time.
You obviously need to convince your parents or (someone who would co-sign and help with the downpayment) about how good of an idea this is. But if they are savvy money people and they trust you (which I bet the do), then this seems very doable. Maybe give them part of the equity or a monthly fee until you refinance and get their co-signing off the loan.
The Assumable Guy544 Reviews - New to Real Estate · Texas Christian University · Member since 2022 · 118 posts · 56 votes3y
Tucker, congrats on taking that first step in real estate investing! Im a young investor just like yourself, getting started now will allow you to become financially free sooner then never. Get a credit card build up your credit. Save up cash for a FHA 3.5% down payment, based on your market will determine the money you should save for a down payment. Look for the biggest multi-family property that makes the most financial sense to invest in. Even if you are not cash flowing immediately you still are paying a significant amount less on your mortgage by having the other tenants pay off the rest. Make sure the multi-family property will pass a FHA inspection. (Talk to your lender) Remember once you have established residency for a year you can move out and start the same process over again. By doing this your first investment will likely cash flow because all the units are occupied by rent paying tenants. Make sure you have enough cash reserves for unexpected vacancy. Let's say you purchase a 4plex for your first investment and your second investment is another 4plex, now you are up to 8 units in 2 years! It gets even better. As rates slowly come down overtime look to renovate the properties so that you can refinance and pull cash out. You'll also be getting into a lower interest rate. After the rehab and refinance period look to raise rent to further create more cash flow. This is what I would do. Hope this helps. Good luck on your journey!
- Investor · San Diego, CA · Member since 2016 · 1k+ posts · 975 votes3y
@Tucker Myers Welcome to Bigger Pockets! I would start by reading books about multifamily and commercial real estate, go to meetups in the Ft Collins area, and once you feel a bit more comfortable I would join a mastermind group!
It's all about learning knowledge and getting connected with the right people!
- 3yDan SheeksPro MemberRental Property Investor · Denver, CO · Member since 2016 · 621 posts · 362 votes
Hey @Tucker Myers. I host a bi-weekly Zoom meeting for new/beginning investors who are between 15 and 25. It's a networking group, and we often have expert guests join our meetings. If you're interested, lmk.
Dan
- Investor · Fort Collins, CO · Member since 2016 · 32 posts · 28 votes3y
Tucker,
Awesome that you are getting started early and looking at house hacking opportunities. I believe that is one of the best ways to get started with investment properties because in most cases you can qualify for owner occupied financing which is more favorable than purchasing a pure investment property. It also allows you to get in with a much lower down payment.
One thing to make sure that you are familiar if you are looking in Fort Collins is the occupancy limit regulation commonly referred to as "You + two" It makes it hard to legally rent out more than one room in your home. Here is a link: https://www.fcgov.com/neighbor...
It sounds like you may be moving out of FoCo after you graduate so this may not be an issue for you.
- Real Estate Consultant · Texas City, TX · Member since 2022 · 7 posts · 10 votes3y
Hey @Tucker Myers,
Awesome job planning ahead while you're in school, sounds like you'll be an excellent financial advisor!
I lived in Aurora for about 5 years and rented rooms from house hackers that whole time. That is a great market for it. That being said, make sure you think about what area you would like to buy a house in. Staying near Fitzsimmons Medical Plaza and I-225 are really great bets for rentability and appreciation. As you get towards Buckley or DIA you will lose a lot of renters and the price that you can charge for rooms will drop drastically. There are multiple B & C class neighborhoods which are really great for starter homes where you can get more square footage for your dollar. If you are renting in these neighborhoods, set some strict screening requirements and set house rules to establish what your household will be like. If you're not familiar with the Aurora area, I would really suggest going down there for a day and just driving around. Something I like to do when I'm learning an area is pick a few houses that meet my criteria and to spend time driving around and looking at them. It took me 6 months to get my first house, and I looked at a lot of them in that time. Just looking at the outside of houses and the neighborhood around them gave me a good feel of if it would be a place I would be able to house hack.
Something that's mentioned a lot on the BP podcast is making sure that you have parking. That is especially true in Aurora. Ensuring there is driveway or yard space for your tenants can really help in a city where most people have to park on the street. If you do find a house with mostly street parking, make sure that its a large enough street that your tenants can safely and comfortably park on. As you may know from living in FoCo, if it snows, busy streets may be plowed and require people to move their vehicles or they will get a ticket. This is something to be mindful of if you have 4 tenants that all have to park on the street!
Finally, when I lived in CO there was a first time home buyer's grant available that provided money for first time buyer's to use towards their home purchase. This is definitely something you should look into if you haven't already to see if the program is still available, and if you'll qualify. Best of luck on you search and your future as an investor!
- Full time investor · Cincinnati, OH · Member since 2013 · 405 posts · 312 votes3y
We have an incredible non-residential commercial mastermind where we take on 20 members at a time. It is a paid mastermind but it is comprehensive and the program is five months long. After that we continue to meet forever to do deal reviews. The asset classes are retail, office, co-working spaces, industrial, flex, mixed use etc. I don't know what BP allows me to post but feel free to message me.
- Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes3y
Smart man. Get a 4 unit multi. House hack with 3-5% down. Have the other 3 units pay all the bills. Move out in a couple years, and RENT out your unit. Buy another 4 unit and do the same thing. Become financially free, and do whatever you want with your TIME :)
- House Hacking Specialist · Denver, CO · Member since 2016 · 411 posts · 396 votes3y
@Tucker Myers Way to be proactive and start thinking ahead. I remember back in the day when I was one year away from graduating college and my dad mentioned that I should buy a 4+ bedroom house house had rent out the spare rooms. He would cosign and help me out with downpayment. That went in one ear and out the other haha. Thinking back, I wish that I would have taken him up on his offer. Instead, I more focused on my next beer and chasing girls :) You are in an excellent position because you have time on your side!
In one of your responses, you mentioned that you would be renting in Aurora. Is there where you would like to HH or are you interested Northern Colorado?
Some of this might have already been covered above but here is my 2 cents:
Multifamily House Hacking- When researching house hacking, one of the first things you will find is house hacking a multifamily. That is very tough to execute in the front range. Mainly due to financing. Google FHA Self Sufficiency test. Where you would find your most success is 5+ bed homes to rent by the room. Even better if they have additional kitchen/kitchenette.
Lending- whether you are 3 months or 18 months out, I would connect with an investment friendly lender now. That will give you a good understanding what your buying power looks like now and could look like in the future. This lender will help you get a better understanding for multifamily financing as well.
Lending Qualifications- We are currently working with a recent college grade and running into challenges with home much he can qualify for and it really restricting his options. He is now working with his dad as a co-signer to boost the amount he can qualify for. Game changer.
Education- This goes without saying but education is very important. I just put together a 6 part analysis house hacking in Colorado (including analysis on some current single family homes and off market multi's). Ill DM you the details
Network, network, network!- Find yourself a some networking groups to connect with and hold you accountable on your short and long term goals.
Last thing- consistency is better than finding that perfect house hack. Base hits win championships.
Keep on crushing it. Best of luck!
- Investor · Boulder, CO · Member since 2017 · 304 posts · 347 votes3y
@Tucker Myers hello:) I just wanted to ask about your intention to move to Aurora? I grew up in Loveland and am very familiar with Larimer, Weld and Boulder Counties. I've also owned property in Adams County. I started investing right out of college too. 22 years later I'll offer that location is as important as the old saying ("Location, location, location") says it is. Buy the worst property in the best area you can afford. I'd caution you against Aurora. Lots of crime in most areas. The areas that don't have as much crime are valued similar to the homes in Northern Colorado. They may not be as big but the rents are typically higher. Why commute on 1-25 if you don't have to?
- Member since 2023 · 5 posts · 8 votes3y
@Shiela R.
Hello Shiela.Thank you so much for commenting on my post! The reason why Aurora is a place I am looking at moving to is because my girlfriend is going to be studying at CU Anschutz. However, she will not be studying there for another two years. As I am realizing this now, I feel it would be a much better idea if we house-hacked a different/better location while we have the opportunity to. I have looked at the Greeley and Loveland area as options. What do you think about those? - Real Estate Agent · Loveland, CO · Member since 2016 · 85 posts · 26 votes3y
Quote from @Tucker Myers:
I am a college student graduating in December 2023. I have a great job lined up as a financial advisor and will be working under a team as an intern this summer. Once I graduate, or even sooner if possible, I would like to purchase a multi-family home. Real estate is crazy expensive in Colorado, and I would like to know any tips anybody has for me.
Hey Tucker!
Smart decision my friend. You should talk to @Lorenzo Prieto he's a local lender in Greeley and has first hand experience doing house hacking.
I'm also a local agent in NoCo and would be happy to meet up with you and your girlfriend to discuss different options. If you search biggerpockets networking events I just added our April event. It's really laid back and great for investors of all types!
- Investor · Boulder, CO · Member since 2017 · 304 posts · 347 votes3y
Sure thing @Tucker Myers. I see. Both Loveland and Greeley are good options. I used to own a 4 plex in Loveland and it cash flowed rather nicely. Greeley has UNC and Loveland has so many lakes plus it is close to Ft. Collins. Still, find the best hood in your price range and look for a property that may need some TLC. Best of Luck!
- 3yTanner PileBusiness MemberReal Estate Broker · Colorado Springs, CO · Member since 2019 · 388 posts · 326 votes
@Tucker Myers house hack with roommates now while you are still used to having them and young. Going multi-family with as many units as possible or a single family home with 4+ bedrooms with be good options. A SFH will be better for having a higher chance of living rent free. The multi-family play will be more long term for more cash flow play. You still have a chance of living rent free but will depend on the units lay out for the property.
Tanner Pile4.931 Reviews - Lender · Seattle, WA · Member since 2022 · 482 posts · 768 votes3y
HI Tucker, it really depends on what your long term goal on investing real estate. You want to invest just to have a place to live and potentially offsetting your mortgage payment by renting out the vacated rooms or having x amount of cashflow in the future? In this case, I would recommend staying away from condo as they have high HOA fees and tends to increases every year. Also for condos, you only own the unit but no the actual land itself. You should always looking into single family houses or multifamily, as there is an actual land that you own and potentially build ADU/DADU in the foreseeable future.
Also, the beauty of FHA is that it allows you to put 3.5% down payment to invest in 1-4 units. However if you plan on buying 3-4units, there is a trigger rule for FHA, it is called the self sufficiency test. In order to past this SS test, your appraised market gross rental income at 75% has to be more/equal to your monthly mortgage payment (PITIA). These are something to be considered. Feel free to DM and we can talk more about it @Carlos Valencia @Albert Bui
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