All Forum Posts by: Jeff White

@Zeona McIntyre I have a few rentals on Section 8 here in Denver, and I'm more than happy to provide any information that you need since I really like the program. 

I don't do it as much as Joseph Asamoah does with all my units since I like to spread my risk with rent by room, long-term tenants and Section 8 tenants. 

I have two 3 bedroom one one 4 bedroom units in Denver County with the Denver Housing Authority. Also, I'm about to add a 5 bedroom unit in Aurora, so I will be able to comment on that Housing Authority as well. 

 

@Josh Zeb That's fantastic that you already have the down payment saved up, that's usually the biggest hurdle with qualifying as a first-time home buyer. 

Have you talked to a lender yet to get pre-approval?  That would be the first step to determine what properties that you qualify for. If you have a W2 salary and current reside here, I think you should be fine.  

As you probably already noticed, 2-4 units in Denver metro are sold at premium, and in order to cash flow, you definitely need to put a larger down payment to cash flow.

@Josh Zeb Welcome Josh to BP!  It is a great resource to have this site available.  Congrats on planning for your first house hack, which particular strategy are you looking to employ?  

I've found great success in rent by room and finding unique properties with mother-in-law apartments, and also, I've seen clients utilize Airbnb as well, so it really depends on your goals?  Are you looking for cash flow?  Appreciation?  A little bit of both?   

@Chris John That really depends on your goals, are you looking to be a passive or active investor?  Obviously, if you employ a creative strategy such as rent by room or Airbnb or even both, you can definitely achieve higher than average returns relative to standard index fund investing. Also, you can still find rent ready properties that work for those strategies, you just need to know where to look and what's the best strategy for you and your goals.   

@Dixie Larson Welcome to the forums!  That's a great idea to buy long-term wealth, and it is much easier to cash flow with condos than other property types.

You can still find tenants in the fall/winter months, but it is definitely harder than spring/summer. Thus, we are similar to Kansas City in that way.

One way that I personally make it work for my investing strategy is to fill the vacancy during the fall/winter months at a reduced rent where you know you can find a tenant in under 30 days. Vacancy is the biggest killer of landlords, and you don't need to be greedy in the cold months. Also, give them a 6 month lease that expires around 3/31, and then when renew comes, you can raise it closer to market rents or find a new tenant that will pay market rents.

That's precisely why I have all my leases end between April to August, so I don't have to fill vacancies in the fall/winter.
 

@Robert Washington Great start to your investing journey, what's your next step with the property? Do you want to 1031 exchange it?  Self-manage long-term?

@Logan Ashley 

Hi Logan! Welcome to the forums, you are in the right place to ensure your success long-term.

Denver is a fantastic place to invest, we have had amazing appreciation these last few years, so it is more challenging to cash now than before. The most important thing is being open-minded to creative strategies beyond just 2-4 unit properties. It is still possible to cash flow here, you just need to approach it differently.

Househacking is a great option since there are lots of ways to accomplish that here too. I've successfully done it personally multiple times and I have clients that have done it as well.

First step would be to take to a lender to get pre-approved, that will determine what properties that you can look at and what price points. They will be able to determine that based on your income and reserves. You can find a few local lenders here in Denver, or if you need one, I'm more than happy to recommend a few.  Great news for you and your husband is that you are utilize plenty of first-time home buyer programs. 

Next step would be to determine which property type fits your goals. There aren't many multifamilies here in Denver that cash flow due to the high purchase relative to rents, and most of them need work and have trouble qualifying for a FHA Loan.

The three best strategies for house hacking right now in 2022 in Denver:

1) Rent By Room - buy a large house (5+ bedrooms/3+ Bathrooms) in the Denver metro area (Thornton, Northglenn, Westminster, Lakewood and west Denver work great) and live in the master room and rent out all the other bedrooms. This strategy works great because there is a huge need for affordable housing here in Denver and paying 750 for a bedroom is a good deal for people that want to live here but can't afford a one bedroom apartment. With this strategy, you can expect to live for free and make $500-$1000 per month cash flow. It is a little more work in the front end (ie. furnishings, finding 5 tenants, signing leases), but it is worth it!

2) Airbnb - similar to the above strategy, Airbnb is a fantastic one as well since Denver gets a lot of tourists. I've seen clients live upstairs and rent out the basement on Airbnb, so you get the best of both worlds, privacy and your own space while the lucrativeness of Airbnb, so you can definitely live for free or close to it with this strategy, but you have to know which areas allow Airbnb after you move out, and it is a good idea to have a 2nd option if the city or county changes their policies and you Airbnb anymore.

3) Combination- you can easily do both strategies if you find a house with a walkout basement or separate entrance to the basement, and if you are willing, you can Airbnb the basement and then rent out the rooms upstairs. This strategy you will probably cash flow the most at over $1k per month, but it would be the most amount of work, but worth it for the right people.

You are in a great position, and Denver is a fantastic place to live and invest.

@Brea Christopherson So sorry to hear about your situation. That's very unfortunate. Good news is that you have lots of equity to work with, and you have some options because of that. 

The decision to sell and then buy is a tricky one, especially now with rates being close to 5.5% for owner occupied properties, and especially since you bought in a good area that has experienced lots of appreciation and probably know the neighbors, school district, etc. 

The main thing to think about is your goals. It doesn't sound like the best property to rent out, and you don't want to have negative cash flowing property when you have lots of equity in it. 

Do you want stay in your current area?  Have you considered a smaller house or a townhome in your neighborhood if it is just you, two kids and a couple of pets?  Do you want to house hack and live in a separate unit with your kids and rent/Airbnb the other unit? Do you want to be located in a certain part of town? Lots of things to think about.   

@David Mulholland FirstBank is local Colorado one and they give a $300 bonus for setting up a checking account. 

There are other credit unions and even some national ones that work as well, so it really depends on what your goals.

You can accept rent payments via Zelle for a majority of banks out there. 

@Shannon Beahler Hi Shannon!  Welcome to the forums, you are in the right place to ensure your success long-term.

Denver is a fantastic place to invest, we have had amazing appreciation these last few years, so it is more challenging to cash now than before. The most important thing is being open-minded to creative strategies beyond just 2-4 unit properties. It is still possible to cash flow here, you just need to approach it differently.

Househacking is a great option since there are lots of ways to accomplish that here too. I've successfully done it personally multiple times and I have clients that have done it as well.

First step would be to take to a lender to get pre-approved, that will determine what properties that you can look at and what price points. They will be able to determine that based on your income and reserves. You can find a few local lenders here in Denver, or if you need one, I'm more than happy to recommend a few.

Next step would be to determine which property type fits your goals. There aren't many multifamilies here in Denver that cash flow due to the high purchase relative to rents, and most of them need work and have trouble qualifying for a FHA Loan.

The three best strategies for house hacking right now in 2022 in Denver:

1) Rent By Room - buy a large house (5+ bedrooms/3+ Bathrooms) in the Denver metro area (Thornton, Northglenn, Westminster, Lakewood and west Denver work great) and live in the master room and rent out all the other bedrooms. This strategy works great because there is a huge need for affordable housing here in Denver and paying 750 for a bedroom is a good deal for people that want to live here but can't afford a one bedroom apartment. With this strategy, you can expect to live for free and make $500-$1000 per month cash flow. It is a little more work in the front end (ie. furnishings, finding 5 tenants, signing leases), but it is worth it!

2) Airbnb - similar to the above strategy, Airbnb is a fantastic one as well since Denver gets a lot of tourists. I've seen clients live upstairs and rent out the basement on Airbnb, so you get the best of both worlds, privacy and your own space while the lucrativeness of Airbnb, so you can definitely live for free or close to it with this strategy, but you have to know which areas allow Airbnb after you move out, and it is a good idea to have a 2nd option if the city or county changes their policies and you Airbnb anymore.

3) Combination- you can easily do both strategies if you find a house with a walkout basement or separate entrance to the basement, and if you are willing, you can Airbnb the basement and then rent out the rooms upstairs. This strategy you will probably cash flow the most at over $1k per month, but it would be the most amount of work, but worth it for the right people.

You are in a great position, and Denver is a fantastic place to live and invest.