Any first time home buyers cash flowing in Denver \ Springs area?

Question

Hello,

Wondering if any first time home buyers in 2018 \ 2019 have had luck finding a first time home cash flowing property in Colorado? I am finding it hard to find a property in Arvada, Broomfield, Westminister area that cash flows doing a house hack with 3.5% down.. I am wondering if I should be looking in Colorado Springs or Greeley where properties are quite a bit cheaper, or maybe continue to save and just buy out of state.

Would like to hear any success stories \ opinions.

Thanks

Chris Lopez · Answer

@Mathew Fuller You'll have a hard time finding an off market place with a 3.5% FHA down. Occasionally you will, but it's not worth making it your primary focus. The MLS see 95 to 97% of all transactions. With a house hack, you're looking for a long term rental. You can sift and sort on the MLS to find places in better locations and more upside than taking what you get off market for a $30k discount.

Don't lose the forest through the trees on buying a cash flowing house hack. I have a few clients cash flowing, while they are living in the property, but many have severely reduced living expenses (they are paying $200 to $800/mo to live.) That's what you can rent a room for in Denver! They now own an asset and are living for cheap.

The power of house hacking is not cash flowing while you're there, but it's buying a place with a low down payment, then moving out after one year and repeating. It's the repeating of buying multiple owner-occupied places at 3.5% to 5% down that builds wealth, not one single house hack.

I'm teaching a house hacking class on Wed at 6PM https://www.biggerpockets.com/forums/521/topics/713742-free-denver-house-hacking-class

We go through a detailed walk through of buying 4 places over the next 8 years. It's amazing the wealth it builds. We discuss what's working in the current state of the marekt.

Matt M. · Answer

How many bedrooms are you looking for? 4-5 is better with those higher price points. What about a 3 bed townhome? I just closed one here in Arvada for a client at ~$400k. It is a 4 bed. What are you qualified for?

Joe Massey · Answer

Hi @Mathew Fuller,

2019 is an excellent time for investing in Colorado! @Chris Lopez is a knowledgeable realtor in the Denver area who just recently published a book.  The 2019 Guide to Denver Real Estate Investing Strategies compiles many real estate investors from the Denver area who share their experiences and strategies.  Chris is co-instructing a house hacking class tomorrow night at 6!  Please stop by or click on Chris above to find out how to obtain his beneficial book!

Derek Diamond · Answer

I have but years ago. I am guessing it will be harder to do now, just using the MLS. Are you finding sellers off the market for better prices?

Mathew Fuller · Answer

@Matt M.

Thanks Matt, I’ll have to look into that a bit more. Just trying to find a good place to sink my money into that isn’t going to work against me, that’s my biggest worry. Good to hear it worked out for your client.

Matt M. · Answer

It is actually a SFR in his case. It had sat for some time, but just needed new carpet. IIRC we got ~$10k under asking with $3500 in closing cost help and another $6k in concessions. He's renting the entire basement out at a higher price. The guy taking an upstairs room is only going to be there M-F. He is going to live in 1 room and keep the other as an office.

HOAs are not all bad. You just have to know the rules.

Mathew Fuller · Answer

@Derek Diamond

I’m wasn’t aware that you could do that, still new to this. I will look into that further.

Thanks Derek

Mathew Fuller · Answer

@Matt M.

I am qualified for 400k, I’m a bit weary of properties with HOA’s since they have restrictions on what I can do and eat into my money, what was the strategy with the 4 bed town home if you don’t mind me asking.

Thanks Matt.

Any first time home buyers cash flowing in Denver \ Springs area?

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