Advice on first property investment (house hacking) - Denver, CO

[George Turner]

Hi all! I'm looking to invest in my first property in Denver and would like to acquire a small multi-family (3-4 units), live in one of the units and rent out the others. The desired area is next to a university and a hospital, and only about 15 minutes to downtown Denver. I'm open to other areas as well, but based on what my realtor friends say about where I live now makes we want to get my foot in the door here. 

While the market in Denver seems to be solid, and everything I find in my research seems to confirm that, I'm unsure of what the rental market is like and for what demographics (family, students, traveling nurses). Since I'll be living in one of the units, my personal preference is to find something on the newer side, which would likely mean higher rent/unit but I'm worried the higher price point would limit the tenant pool. 

I'd like to net at least 6% each year, and the higher end units seem to get me there whereas something like the place I rent and live in now (duplex) are somewhere around 2-3%. I might be overthinking things but how do I analyze a property that has multiple types of renters in the area? Is it all about how I market the units? Should I stop thinking about who would rent the units and focus on the numbers?

Essentially, I find myself in analysis paralysis when looking at properties. Some seem great for me, some are great for students, others great for a family, and some I just don't know. 

I want to be thorough as this is a big step for me, but I also don't want to stop myself from a great investment because I overthought it. Any advice? 

Cheers!

[Forrest Lloyd]

Agree with the advice you’ve gotten so far as I’ve done 3 house hacks now in Denver area. The part I slightly disagree on is being cognizant of who might rent your units as it’s important and will impact your rents/repairs/vacancies/headaches/etc. For example, my units this far have typically attracted younger couples. My headaches have been minimal thus far.

However, most important for you is to look for a base hit, not a home run. Your odds of a home run without a massive amount of creativity in denver area is minimal. You simply need a base hit. Take action within reason and get your feet wet. You can always pivot.