All Forum Posts by: Jeff White

@Christian Albright Congrats on taking that first step to wanting to invest. Lots of people don't ever make that decision or wait around for a perfect deal. Since you have a construction background, you are more adept than the average house hacker to handle fixing things and repairs and know how long things take to fix, so you won't get ripped off as much with contractors, especially if you want to buy a multifamily, those usually require the most work since most of them are investor-owned and not as nice as single family. 

BP podcast is a wonderful tool, but the key thing is getting started and buying your first one. You can have all the knowledge in the world, but application is more important. 

I agree with the poster above that house hacking with a single family and renting by the rooms is your best ROI in the Denver metro market today, and another side benefit long-term benefit, when you decide to sell, you have more buyers since single family houses are more in demand than multis as well.

There are lots of ways to approach it, but I would find a qualified mortgage lender that can tell you how much you are pre-approved for, and then you can start your search from there. Denver has a lot of great pockets of growth.  

@Chris Lopez I'm definitely interested in going for a ride along:

Investing Experience: Three years real estate investing experience with three house hacks and looking for more. I also have some experience with long-distance investing.  

What you want to learn:I want to learn how add value to achieve the greatest ROI and achieve the highest rents. I know different improvements add value, but what are the best things to improve? What do renters value the most? Do renters care if you have stainless steel appliances and hardwood floors? What do commercial appraisers look for besides NOI? Those types of questions.

Roadblocks: My current roadblocks are understanding construction costs, scope of work, and finding good and reliable contractors. 

A little about me: I'm a aspiring investor that is very passionate about real estate, specifically using house hacking and conventional financing as a means to grow my portfolio in the slow and steady way.  Long-term, I'm very interested in the 5+ units, so this would be a great educational opportunity that I would really enjoy. 

@James Carlson Thanks!  Likewise!  

We are on our third place now over near Belmar on the east side of Sheridan. It's the best one yet.   

@David Chen As others have mentioned, I wouldn't go into a new build townhouse for house hacking purposes unless you were putting 40% down payment, when looking at properties to house hack, you want to run the numbers when you live there and when you move out. The most important number is cash flow per month after you move out since you won't live there long-term. 

If you don't cash flow after you move out or at least break even (maybe lose a little bit per month for a nicer property in a good location), then it isn't a good property to house hack.

Based on your price range, I think you could definitely find a 4-6 bedroom house in Lakewood, Westminster, Thornton, Northglenn, Wheat RIdge, and west Denver locations. In might not be a new build, but you could probably find a decent 1960-80s ranch house that is fairly updated, doesn't need much work, and move-in ready. 

I'm currently house hacking in west Denver and cash flowing every month, so it is realistic. It is definitely possible to achieve your goals here, you just might have to work with your sister and sacrifice a little on location and living in an older house.  

It is important to think about cash flow and appreciation here in Denver metro. 

For example, Edgewater is a great spot due to proximity to Sloan's Lake and Highlands. If you live in Lakewood, which is right next to Edgewater, you are a little further from the Sloan's Lake and all the bars, restaurants, and redevelopment; but the house prices aren't as expensive, and you could probably get pretty close to the same amount of rent per room. Edgewater will have a higher appreciation rate, but probably not as much as you think. 

The big difference is what you get for your price $430-450k, in Edgewater, you are looking at 2-3 bedroom house, but in Lakewood, you will get a 4-5 bedroom house, that extra bedroom or two or three is an additional $700-$2,100 cash flow per month right there. 

I think Lakewood is a good middle ground that can give you cash flow, and you will get the side benefits of appreciation. It won't be as much as prime areas of Denver, but it still be a solid 5-6% (which is the average last 40 year annual appreciate rate in Denver). 

With that, you will live for free or be really close to it, and still be close enough to fun things in the city while setting yourself up for a successful first house hack. 

@Chris Gouveia Welcome to BP!  Even with the price points of Denver compared to other similar markets, the annual appreciation over the last 40 years has been ~6% per year, so you can definitely achieve your goals long-term. 

Denver doesn't have the 1% deals much anymore unless you look for condos/townhouses, but there are still deals out there, and I believe in the long-term growth of Denver with all the people moving here, great beer, Red Rocks, mountains, and so many things to do.  

@Ryan Garrison Hi Ryan, I doubt you will find many 3-4 plexes that have more than 2 bedrooms per unit. I think the most I've ever seen was a 3/1 for each unit for a 4 plex, but they were counting the basement as a non-conforming bedroom, and it was really small in total square footage for a family. 

If you still want to pursue the house hacking strategy, have you thought about a large duplex? I have seen 4/2 units for each side of a duplex. It won't be a perfect cash flowing deal, but it would definitely be something to consider. I'm not sure what the multifamily market is in Olympia, but here in Denver, there are some duplexes that fit that. 

You probably won't live for free, but would most likely would cut your living costs in half with renting the other side and living comfortably with your family.

The other option would be to be a large single family house that has a mother-in-law suite attached or the ability to wall off the basement and make it a separate rentable unit, I've found lots of houses like that here that have worked for me. 

My current house hack is a 7 bedroom/3 bathroom house, with a 4/2 unit upstairs and a 3/1 unit downstairs that I rent out to a family. I don't have a family myself, but it would work for someone that has a family. 

@Walker Noon I agree with Craig. Treat it like a business, and in Denver, you don't need to rent to friends, that's easy. Denver has so much demand for rent-by-the-room tenants that you can find plenty of people to fill those rooms.  

For your first house hack, it would be much better to rent to people that you don't know so you don't fall into the friend trap of trusting them since you know them. It will be a better landlord education for you, and also, not potentially ruin a friendship from living with your friends. 

@Angie DeNardo Hi Angie, I'm a local Denver investor that is on my third house hack, so I know it can be done and can answer any questions for you.   

In 2019, finding Class B/C areas that are turning to A areas is a challenge though because that is a lot of speculation and most of those areas are now closer to B have A price tags (ex. Cole/Five Points neighborhood). 

If I was starting new and not knowing any neighborhoods and I wanted to house hack, I would spend time time driving through these neighborhoods to get comfortable and see if you could live there for one year or more.  Drive around at night and during the day to see how it is.  Also, go to a few meetups and talk to some local investors and see what neighborhoods they personally like or dislike. 

If you have no job to drive to, then you have a lot flexibility. Denver metro includes the surrounding suburban cities.

As Steve mentioned, I also like the west side of town which is defined as west of I-25 interstate. It is one of the last affordable parts of town while still close to downtown Denver, the mountains, Red Rocks, etc. 

Regarding Denver neighborhoods, here's my personal favorites:

Villa Park, Barnum, Westwood, Athmar Park, Harvey Park, Ruby Hill.

Villa Park is interesting because some of the scrap and builds are coming down there from Sloan's Lake area, so you have these older homes from the 50s and 60s and then a couple of new builds, so that is one neighborhood that is trending from C to B sooner.  

All of those other neighborhoods are closer to C, but long-term they can definitely become B due to benefiting from Denver appreciation over time. 

Also, all of those Denver neighborhoods are still reasonably affordable relative to other Denver neighborhoods, so you can still make the numbers work on a house hack.

Outside of Denver, but still close by, the cities of Lakewood, Wheat Ridge, Westminster, Northglenn, and Thornton. Each of these cities are close to downtown, some are Class B already, some Class C, but each one will have options for good sized houses to house hack. 

I agree with Steve that it might be a good idea to rent for six months and then use that time for educating yourself on finding the best location for your first deal. 

@Chris Mason Do you have any clients that have moved more than 10 times to get that primary residence financing advantage?  Does it become a problem with the underwriter if they see someone move every year?    

@Parker F. Hi Parker, those are very ambitious goals, but very achievable too.  Have you thought about house hacking with your family? With a property that you are living in now, I imagine that mortgage is a huge % of your after tax take home pay.  If you could downsize and minimize that expense, that would greatly accelerate your savings rate.