All Forum Posts by: James Carlson

@Kyle Wahl

Like others have said, I'd pay off that credit card first. But after that, it's never "too early" to buy again. It's just a matter of if you have clear goals in mind and can achieve those goals. How long have you had your property in Colorado Springs? And where is it exactly? We've got a number of clients who've bought there for either Airbnb rentals or long-term rentals. (Or some variation of house hacking.) If you bought in the last year or so, it can be a little tough to cash flow as prices have seen a Denver-like increase recently. 

But if you bought, say, five years ago, you should be doing alright. I'll PM you.

I wish you luck with the CC debt pay down. Cheers!

@Chukwuemeka Ogbonna

First off, a premature welcome to Denver! It's a great place to be. More sun and less humidity and heat than Austin, proximity to mountains, and a solid job market (or what used to be a solid job market. Who knows what the next few months/years will bring.)

It can be tough to understand a market without living there for awhile. That's okay. You can search for Denver in this forum or Denver and house hacking or whatever it is you hope to do and you should find some good content. If you ever come out here, you can attend a few investment clubs or meetups, as well.

Your idea to house hack is a good one. We've had a number of clients do well with it. (You can see their deal diaries here and here.) That's the rent-by-the-room model. You can also buy a duplex, but that's a steeper entry price point. A third option, if you like having more privacy, is to find a SFH with a basement apartment or some sort of separate entrance to the basement that would allow you to rent that out. We have a number of clients who have also done this with success.

I wish you the best of luck!

Great job, @Dan Mackin.

@Kyle Spearin

Awesome to hear you're about to close on a place. We had some clients close recently on a house hack in Denver's Barnum neighborhood and are doing well. Be sure to let everyone know how it goes when you get it finalized. 

@Mary Seo

Good for you for taking a leap. It can be a bit tougher in expensive cities, but it's possible. (We're in Denver, for context. We own a a few rentals ourselves and help a lot of investors and first-time homebuyers.) 

If you don't have a ton of cash, I'd opt for some version of house hacking. If done right, you drastically reduce your monthly housing costs and can save that money to repeat in a year and within a few years, you own a few properties. (As an example, here's a deal diary of some Denver clients who were paying $1500 in rent and then bought a place, house hacked and were actually living for free plus $700 in cash flow. That's a $2,200 swing in monthly expenses.) 

What kind of house hack you do is up to your comfort level. In general, the more privacy you want, the less revenue and the inverse is true as well. If you can afford a small SFH, then great, buy that and take a few roommates to offset your mortgage. I don't know what the housing stock is like out in LA, but in Denver and Colorado Springs, we find a good number of homes with basements that have a separate entrance so you can Airbnb or rent it separately while you're there. (The latter option gives you slightly less rent but more privacy.)

If you don't have the cash for a SFH, go for a condo. Our first few purchases were condos and they did us well. You can still take a roommate as a house hacking option.

Either way, find a good investor-friendly agent and go for it. Good luck!

@Roger Kelley

Just thought I'd reiterate that we find renters for our Denver properties (and Colorado Springs properties) on Facebook Marketplace and Zillow. (Zillow gives you one free listing and charges $9.99/listing/week after that, though I think they're doing $4.99/listing/week right now because of CV-19.)

We also use Airbnb and Furnished Finder for our medium-term rentals in Denver and Colorado Springs, but that's for furnished properties. Good luck!

@Wade Megan

An early welcome to Colorado Springs! Great place to live. Sun, beer, mountains. Can't beat it. 

Three thoughts:

1. If your goal is to offset your mortgage while living there, you could house hack by finding a home with a basement apartment or a walk-out basement that you could lease or use as an Airbnb. 

2. There are still occasionally duplexes for around $300k. The location's won't be as ideal and you might have to do a little work, but it'd get you in to a multi-unit. 

3. If you want to keep your price point even lower, a condo is a fine first place. It's how we started in Denver, and that place is now a great little medium-term rental for traveling nurses. And you can also find SFHs for under $300k.

I wish you luck!

@Bryan Cavellier

Like @Evan Polaski, I am not a lawyer or even local to your area. That said ... 

We know the laws here in Denver. If you're zoned single unit here in Denver, then you can live in one unit and rent the other. That separate space is considered, under this scenario, accessory to the primary use of the land. 

But as soon as you move out, you can't rent out two separate spaces to separate parties. Now there does appear to be a kind of loophole that hasn't been tested by any court cases yet, and it's where you rent the "whole house" to one long-term tenant and allow in the lease those tenants to sublease out a portion of their house. How you share the revenues of that sublease is between you two. Maybe you've offered a decent rent to the LTRer so that you keep most or all of the Airbnb money. I have some Denver clients who do this successfully, but -- as I told them when buying -- this is a gray area that appears to circumvent the intent of the law.

Again, talk with a lawyer or other local expert in your area. I wish you luck!

@Victoria Radcliff

Oh, and to your other questions.

Any good investment-minded real estate agent should be able to find duplexes on their MLS search. I'd also make sure your agent invests themselves. We have four properties (five doors) between Denver and Colorado Springs, and we've learned more running those rentals than we have in any books.

And what do you look for in a single-family home for rent-by-the-room? In general, I tell our clients to look for # of rooms and potential for separate living spaces. I think 4br houses is where you start to see a good return. Five bedrooms is better. Six is killer. I have Denver clients who closed a few months ago on their first house hack with a 6br house.

Then also, I think having two living spaces can help as well. You want the roommates having as much space as possible to reduce conflicts. Two separate living spaces (maybe upstairs and downstairs) with TVs can help alleviate some of that tension. 

Good luck!

@Victoria Radcliff

Awesome to hear you're taking a big step. That's exciting. 

There is no "right" way to house hack. It depends on your goals and priorities. Think of house hacking revenues and privacy on a spectrum and broadly speaking they go in opposite directions. More revenue, less privacy. More privacy, less revenue. 

You'll likely make more money renting out a SFH by the room than simply the other side of a duplex. And the cost to get into a SFH might be lower as well. But then you have to live with roommates.

You'll have a lot more privacy with a duplex but a little less revenue. 

Just be honest with yourself about what is most important to you. Me and my wife? We don't like other humans enough to want to live with them all the time, so we'll sacrifice a little revenue for quality of life. Maybe you're different.

And of course there are variations on the themes. You could buy a SFH with a basement apartment and rent that out separately on Airbnb (when coronavirus finally goes away). We help a lot of buyers in Denver and Colorado Springs house hack with these mother-in-law setups. You could also buy a duplex, rent the other side but also take roommates in your side. I have a buyer doing this right now as well.

I hope that helps. Good luck!