All Forum Posts by: Kenny Smith

Investment Info:

5 bed, 2 bath Single Family Home in Westminster, CO bought in December 2021.

Purchase price: $505,000
Cash invested: $63,000

House hack! We converted this single family home into a quasi duplex. Separating the downstairs from the upstairs (door connecting both units to ensure it is not considered an ADU or duplex). We live in the upstairs and airbnb the basement.

What made you interested in investing in this type of deal?

Our strategy has been to buy 1 of these every year and live in it, so we can take out an owner occupied loan vs. an investment loan.  We are able to scale at a rapid pace and we want to do now before we start having kids.

How did you find this deal and how did you negotiate it?

MLS, self represented as I am an agent.

How did you finance this deal?

5% conventional loan, with 2.8% (realtor commission) towards closing costs and remaining back at closing

How did you add value to the deal?

We added a second kitchen in the basement, a few cosmetic items, new landscaping, central a/c, new electrical panel to accommodate the extra kitchen, and ran additional laundry upstairs.

What was the outcome?

Living for free upstairs, and cash flow during the busy months!  If you include the unit we live in, projected cash flow moving out will be $3k per month.

Lessons learned? Challenges?

Be creative!  The market always has opportunities, you just need to know where to look to find them.  Work with the right people that specialize in what you are trying to do!

Good to know! That is new to me, I was always under the impression only one FHA at a time. Thanks.

@Erica Ho

Another thing to note is you can only have 1 FHA loan at any one time. If you buy this next one with an FHA loan, just know you'll need to re-fi out of that one before you can take out another one.

Best of luck!

@Noah Field

Welcome to BiggerPockets! You have hit the JACKPOT of resources for real estate investors. You can literally find answers to all of your questions within the confines of this site. What’s the best way to get started using BiggerPockets?

1. Subscribe to the BiggerPockets Money and Rookie Podcasts

2. Attend the FREE WEBINARS

3. Attend a Meetup in your area/virtual meet ups

4. Purchase the Beginner Books: How to Invest in Real Estate, Set for Life, The House Hacking Strategy

5. Peruse the forums! Ask questions! Answer questions! If you are consistent with learning real estate over the next 4-6 months, you’ll be ready to purchase your first (or next) property in NO TIME!

Good Luck,

Kenny

@Colby Wartman

If you absolutely had to, you could always refinance with a different lender. Could be an option if rates drop below what your rate is over the next year or two. And put the property into your LLC at that time.

I've never done this, but I believe this could be an option for you.

@Asare Nkansah

I would highly recommend getting additional insurance on the property first. If you are doing an STR, look for a policy that has a "home share" clause in there. I have one through liberty mutual, and I am not sure any of the other big insurance companies offer it, but I could be wrong there. Do some shopping, maybe contact an insurance broker that can do that work for you.

As far as an LLC goes, I'd say it can't hurt to create one and put your property into it. It also depends on what your future real estate goals are? Are you planning on moving out and buying more real estate? If so, I think it may be the best habit in creating an LLC for each property for ultimate protection. I guess it really depends on your risk tolerance, and what you are most comfortable with.

Best of luck!

@Michael Pilcher

Welcome to BiggerPockets! You have hit the JACKPOT of resources for real estate investors. You can literally find answers to all of your questions within the confines of this site. What’s the best way to get started using BiggerPockets?

1. Subscribe to the BiggerPockets Money and Rookie Podcasts

2. Attend the FREE WEBINARS

3. Attend a Meetup in your area/virtual meet ups

4. Purchase the Beginner Books: How to Invest in Real Estate, Set for Life, The House Hacking Strategy

5. Peruse the forums! Ask questions! Answer questions! If you are consistent with learning real estate over the next 4-6 months, you’ll be ready to purchase your first (or next) property in NO TIME!

Lastly, there are certainly some creative financing options such as negotiating seller financing for a down payment would be an option. If you have another home currently, you could always pull out a HELOC for a down payment.

Best of luck!

Kenny

@Darrien Linton

Welcome to BiggerPockets! You have hit the JACKPOT of resources for real estate investors. You can literally find answers to all of your questions within the confines of this site. What’s the best way to get started using BiggerPockets?

1. Subscribe to the BiggerPockets Money and Rookie Podcasts

2. Attend the FREE WEBINARS

3. Attend a Meetup in your area/virtual meet ups

4. Purchase the Beginner Books: How to Invest in Real Estate, Set for Life, The House Hacking Strategy

5. Peruse the forums! Ask questions! Answer questions! If you are consistent with learning real estate over the next 4-6 months, you’ll be ready to purchase your first (or next) property in NO TIME!

Good Luck,

Kenny

@Lisa Roehrl

Welcome to BiggerPockets! You have hit the JACKPOT of resources for real estate investors. You can literally find answers to all of your questions within the confines of this site. What’s the best way to get started using BiggerPockets?

1. Subscribe to the BiggerPockets Money and Rookie Podcasts

2. Attend the FREE WEBINARS

3. Attend a Meetup in your area/virtual meet ups

4. Purchase the Beginner Books: How to Invest in Real Estate, Set for Life, The House Hacking Strategy

5. Peruse the forums! Ask questions! Answer questions! If you are consistent with learning real estate over the next 4-6 months, you’ll be ready to purchase your first (or next) property in NO TIME!

Good Luck,

Kenny

@Ancil Castillo

Welcome to BiggerPockets! You have hit the JACKPOT of resources for real estate investors. You can literally find answers to all of your questions within the confines of this site. What’s the best way to get started using BiggerPockets?

1. Subscribe to the BiggerPockets Money and Rookie Podcasts

2. Attend the FREE WEBINARS

3. Attend a Meetup in your area/virtual meet ups

4. Purchase the Beginner Books: How to Invest in Real Estate, Set for Life, The House Hacking Strategy

5. Peruse the forums! Ask questions! Answer questions! If you are consistent with learning real estate over the next 4-6 months, you’ll be ready to purchase your first (or next) property in NO TIME!

Good Luck,

Kenny