Getting "Serious" About REI in 2022

[Steph S.]

Hi BP forums, 
I've been trying to learn more about REI over the past year. I'm very interested in real estate investing so as not to have to worry as much about financial security/retirement, but also to get out of the 9-5 rate race. I'm not looking for luxury and opulence (though of course, that would be nice), but 1) to be able to travel (better once we establish a new normal with covid), 2) quit my 9-5 job to be able to work on passion projects/non-profit work 3) feel comfortable having children in the future and not worrying about that financial burden and 4) establishing generational wealth.

I live in Denver, which feels like a HCoL ara, especially compared to my hometown in Georgia. Long story short: credit score is around 760, about $20k gifted for down payment use only, and about $12000 in debt at an avg of 6.44%, which I'm actively working to pay off more than the min. I'm sure there are additional facets needed to give a complete picture, however...

Who would I talk to to see if it make sense financially and they also understand REI ? Any suggestions for someone in the Denver area? In your opinion, am I in a position to join one of the many REI bootcamps that are out there?

Any thoughts would be greatly appreciated. 

TYIA

[Jeff White]

@Steph S. Congrats on taking the first step toward financial freedom!

I'm a local Denver agent and investor, and I think Denver is a fantastic market to invest in. It definitely isn't as affordable as Georgia, but you have a great credit score and enough of a down payment to qualify to get your first property. You can definitely still live for free and even cash flow while living at your property depending on your comfortability with roommates and location. 

It really comes down to your goals. Do you want to live in a specific area?  Are you open to areas outside the Denver hotspots?  What strategy to you prefer?  Rent by room? Airbnb?  Travel nurses?  Long-term tenants?  When are you looking to move? 

If you want the best cash flow, you can find a single family house with a basement apartment, and live in one bedroom, rent out the other bedrooms upstairs, and then Airbnb the basement. It is a little more work with the Airbnb portion, but you will achieve great cash flow, probably $1000+ net cash flow per month over your mortgage.

If you want good cash flow and less work than above, you can buy a 5+ bedroom/3+ bathroom single family house, live in the smallest room, and then rent out all the bedrooms. You will get $750-800 per bedroom that has a shared bathroom, and $850-900 for the master bedrooms with private bathrooms. Net cash flow will be between $500-$1000 per month. Of course, check out occupancy limits in the county/city that you choose.

If you want the least amount of work but lowest cash flow (cover 50-80% of your mortgage payment), I recommend finding a house with a basement/mother-in-law apartment, and live upstairs and then rent out the basement to a long-term tenant.

Denver metro has experience terrific appreciation like most metro markets, and over the last 40 years, Denver averages 5% appreciation, so Denver is a great bet long-term.

I'm more than happy to discuss further if you have any questions.  

Knowing the answers to the questions above will really help narrow down your search and figure out how you can find that first property.