All Forum Posts by: Brian Bohrer

Hello to all my fellow House Hackers and Biggerpockets enthusiasts! I want to share with you a strategy that not only unlocks the benefits of assuming existing loans but also pairs seamlessly with another powerful wealth-building tactic - House Hacking. As an experienced realtor who has assumed a loan myself, I'm thrilled to share with you the exciting terrain where these strategies intersect and share how they can supercharge your real estate investment journey.

Unveiling the Power of House Hacking

Assumed Loan + House Hacking: A Dynamic Duo

Imagine stepping into a property with a lower interest rate and an existing mortgage, ready for assumption. Think this isn't possible? well it is! All VA, FHA and USDA loans are assumable and even a few Conventional loan products out there are assumable as well. This is not a Subject-to transaction, and you will have to be capable of qualifying for the loan, just as if you were taking out a new loan. Now, pair this strategy with the concept of house hacking, where you live in the property and rent out rooms to cover your mortgage expenses. This dynamic duo creates a powerhouse of wealth generation!

Accelerated Wealth Building: Room by Room

House hacking allows you to tap into a unique source of income by renting out portions of your home. With an assumed loan providing a lower interest rate and accelerated amortization, the income generated from house hacking can be leveraged to pay down the mortgage principal even faster, or the extra cash could be saved to be used towards your next down payment! The power of that interest rate is a game changer in today's market condition.

Financial Flexibility: House Hacking's Cash Flow Cushion

Assuming an existing loan often leads to a lower monthly payment. When you add the income from house hacking into the mix, you not only cover your mortgage but also create a surplus that can be reinvested or used to bolster your financial stability. This financial flexibility is a game-changer, especially for those navigating the unpredictable terrain of real estate. In most cases, when you assume a mortgage say for example with a 3% interest rate you can save tens of thousands of dollars per year in monthly mortgage payments alone when compared to loan written with todays rates! This is not even considering the increased debt (principal) paydown you will be taking advantage of as well. In most cases, you will be paying off your debt twice as fast!

Primary Residence Financing: A Strategic Move

First Home as an Investment: Buying Smart

As many of us have heard directly from David Greene and others on the Biggerpockets podcast, the strategy of buying a primary residence every year with a low 3.5%-5% down payment and then renting the previous home when you buy the next, is a strategy that all new and experienced investors should be taking advantage of! The advantages are twofold - you secure favorable financing terms for your primary residence, and when you're ready to move on to the next property, you have the option to turn your initial purchase into a lucrative investment. With rents falling in many areas, and with the cost to buy going up in relation to higher interest rates, this strategy is becoming harder and harder to implement. Many are finding that when they attempt to rent the home the following year they may have to cover a portion of the previous home's mortgage as the rent won't quite cover the full payment. With the power of assuming a loan, we have a tremendously better chance to cover this payment in the future, and maybe even take home some actual cashflow! What a concept!

Renting Out, Moving Up: A Progressive Portfolio Approach

Assuming an existing loan on your first property and renting it out when you move on to your next home amplifies your wealth-building potential. The lower interest rate inherited from the assumed loan and the rental income from your initial property can be instrumental in financing your next real estate move. It's a progressive portfolio approach that can align with your evolving goals. Even if you do have to shell out a little cash to cover the previous home's mortgage, you still have the powerful advantage of the increased principal paydown working in your favor! Let time be your friend. Rents will increase over time, and when you sell that home in 10 - 20 years (most likely for a substantial profit) you won't remember any of those short rent payments you may of had to cover in the first couple of years!

In Closing

As you navigate the intricate world of real estate investment, consider the symbiotic relationship between assuming existing loans and house hacking. The combination of lower interest rates, accelerated amortization, and the income potential from renting out spaces within your property can set the stage for remarkable wealth generation.

And for those taking the plunge into first time homeownership or those implementing the buy-one-house-per-year strategy with primary residence financing, remember that strategic moves today can lay the foundation for a robust and dynamic real estate portfolio tomorrow.

Here's to unlocking the full potential of your real estate ventures - may they be as rewarding as the strategies you employ!  Happy investing!

Hey @Christopher Turpaud,

Great to meet a fellow Colorado Springs Investor!  I agree with Jordan and others above that you should get involved with local real estate groups to start building your network.  This is the key to becoming successful!  The more people you meet, the more stories you hear, the more you start to get an idea of what aspect in real estate you are drawn to.  Flipping can be a very unforgiving avenue if you do not have someone to help you along the process who knows the right contractors and lenders to get you started.  Also, you may find yourself falling behind on your flip if you are trying to manage it all yourself while holding down the W2.

Get involved in your local community and find your niche!  

If you want to get started asap in real estate, I think the most powerful thing you could do to get started is to buy yourself a home to live in that you can house hack (rent out spare rooms etc).  If you don't want to live with strangers you could also do what my wife and I are doing where we buy a new home every year with 3.5%-5% down and then rent the previous home out to a long term tenant.  If you don't want to manage your properties yourself there are many alternatives to this as well!  I personally run a Professional Landlord business to manage our own properties and others for a significant discount compared to traditional property managers!

I wish you the best on your journey and please feel free to reach out if ever have any questions about the local Colorado Springs market :)

Take Care,

Brian Bohrer

Hello @Patrick Wiggins,

James has covered most sticking points regarding your desire to Mid-Term or Short-Term rent your home.  You will definitely have to weigh your options.  I am curious, how long will you be relocating for the job?  Also, will this be a fully furnished home?  

I ask, because I run a Professional Landlord business and may be interested in renting your home with the intention of sub-leasing it to Mid-Term or Long Term tenants (depending on your timeframe).  It sounds like you do not plan on managing the rental yourself and I would love to speak with you about some options I may be able to provide for you.  Feel free to reach out if you are interested and we can discuss further! :)   

Wishing you the best in your new adventure!

Take Care,

Hello @Jose Sosa,

I see this post is a little dated, but I will provide some assistance in hopes that you are still in need of help. :)

I would suggest speaking with a local attorney to provide the paperwork. A realtor cannot provide this type of paperwork for you, nor can they be a part of the negotiation when there is a subject-to transaction in play. There was also some recent legislation in Colorado that does not allow any Title companies to be involved with a sub-to transaction that involves an FHA or VA loan.

I know Bill Bronchick does work with investors and has a sub-to course you can purchase with his contracts. You may be able to reach out and purchase his paperwork only, but I would strongly suggest educating yourself on this topic, if it is your first sub-to transaction that is.

As far as property management goes, I know Muldoon & Associates works in that area and may be able to provide you with some assistance.  I also run a Professional Landlord business and may be interested in leasing your property to sub-lease to a end-use tenant. But, Pueblo is about a 45 min drive for me and may not be the best fit currently.

Please don't hesitate to reach out if you have any other questions and I would be happy to assist!  Good luck and have a great day :)

Hey @Cameron Enger,

It is true that there are no additional permits required when renting for longer than 30 days per stay in Colorado Springs.  But, in my humble experience it seems you really have to stand out among your competition to have a successful mid-term rental in this competitive market.  

Similarly to Short-Term rentals, the market is becoming a bit saturated and you must be able to offer amenities, location, marketing or pricing that place you above your competition.  With all these factors, plus the cost to furnish the home, it can really add to your initial investment with no promise of a return.

If you need to move quickly and are not confident in your skills to self manage your long-term rental, I would love to speak with you about leasing your property as a professional landlord!  My company solves many of the headaches of traditional property management all while saving you time, money and the hassles of dealing with tenants and toilets!

I would love to connect if you are interested!

Have a great rest of your day :)

You are definitely not alone!  I attend Real Estate industry related business meetings monthly at the local Realtor's Association in Colorado Springs and the insurance agents who attend have all attested to drastic premium increases over the last year...  

In addition to some Insurance companies pulling from the area, these increases are related to the rising costs of building materials, labor, and frequency of hail storms etc.  

Some association have volunteered to convert from a group policy to an individual policy format.  This may decrease the amount of dues owed per unit, but also creates major issues when there is a hail storm or other loss that effects the exterior and shared spaces of the property.  For example, say you have 4 side-by-side townhomes that share a roof and if there is a hail storm and one of the units is un-effected.  How would you address this?  What if there are multiple units per level of the property, would only the top level units be responsible for a roof replacement?  

With as much talk about creating affordable housing in Colorado Springs, there is going to have be some discussion about how to address these rising costs in housing that are not directly related to the sales price of the home.

I wish I had a better answer for you, but this is going to be an issue for HOA's in the area for years to come...

Hey Kate,

Here are a couple of articles that will provide with some recent changes, but this is not a complete list.  This site provides a small summary of some of the recent changes that went into effect this year.  https://frascona.com/2023-colorado-residential-leasing-chang...

I would also recommend checking out the Nolo website for a nice summary of some of the other current laws in place.  https://www.nolo.com/legal-encyclopedia/overview-landlord-te...

and you can also find a complete list of laws from the state site here... https://leg.colorado.gov/bill-search?field_subjects[0]=58&am...

I hope this helps! :)  

Hey there, fellow Colorado property owners and investors!

If you're feeling the ripples of those new landlord/tenant laws that kicked in this year, you're not alone. These changes are shaking up the game for all of us, making self-management tougher and traditional property management pricier.

You might've noticed the tweaks in tenant screening, radon disclosures, deposit rules, and even pet-related regulations, all making it trickier to keep things profitable. And let's face it, those increasing rates from professional managers aren’t making it easier either!

But here's the good news: there's a way to dodge the headache without breaking the bank. I've got some solutions up my sleeve that could help you trim those management costs or bid farewell to the self-management stress—without the hefty bill of a typical property manager.

Wanna chat about it? Let's talk strategies to keep those properties profitable and hassle-free despite these new laws. Give me a call, send me an email or drop me a message, and let's navigate this together!

Wishing a prosperous and profitable 2024!

Welcome to the Family James!

Love the profile pic, I have 2 huskies myself that keep me more than busy this time of year as they never want to come inside from playing in the snow! haha 

I love connecting with other like minded investors in the Colorado Springs area. vIf you ever want to grab a cup of coffee, feel free to reach out!  I am a part of a great investment mastermind group that can definitely help you get on track if you don't know where to start.  I hope to hear from you soon!  Best of luck on your real estate journey! 

Take Care,

Brian Bohrer
HomeSmart / Next Gear Mortgage Company
Colorado Real Estate License #100099780
Lender nMLS#2415373
(308)258-0226

Hey Michael,

Congratulations on beginning your journey with the greatest wealth generating asset known to man! I agree that when you are over-analyzing you can definitely feel like you are spinning your wheels in the mud. I would suggest getting out there and getting involved with local real estate investment groups. You will find other like-minded individuals who may be willing to JV (joint venture) with you into a deal that is already in motion. 30% of something is better than 100% of nothing! Otherwise I would just suggest that you continues analyzing deals until you find the right one that works with your numbers! Feel free to call insurance agencies, look at assessor records, call the utility company or do anything that is necessary to help lock in your variables. Then like Nike used to say... "Just Do It!" as part of the process is learning as you go along.

Listen to the most recent Biggerpockets podcast #722 where the Guru, David Greene, talks about how many mistakes he made with his first property.  It is a really eye opening episode that shows you don't have to be perfect, and the real value can come from the education of just doing!  I hope this helps and I wish you the best on your real estate journey!  Take Care,