Advise a Newbie Who's Moving to Denver Area in September - HH?

Question

Hi all,

New on the forums, but over the past month I've consumed about 100 hours of podcasts and have read a few RE books. Next on the list is BP's House Hacking book because of the below..

I'm likely moving to the Denver area in September for work (in DTC Denver Tech Center) and will be making around 85k.

After all of the podcasts and reading, I'm very eager to start my Real Estate Investing career with a House Hack in the Denver area, within 30-45 minutes of DTC so my commute isn't so bad.

Me:

- 27 years old living in NYC for the past few years so am used to small living spaces, multiple roommates, low standard of living (relative, I still feel very lucky to be where I am in life). During Covid I'm living with my parents in Philadelphia suburbs so no expenses currently.

- 3+ years employment at the same job, but on furlough for the past 3 months and collecting NY unemployment (1k / week post-tax).

- 10k savings, anticipating about 14k by the time I move.

- ~20k student loans (on forebearance until 9/31 given the current Covid law). This is the only debt I have. I have a low interest rate and pay appx 400/month.

- 800+ credit score.

- ~85k salary, as I previously stated. Could be higher depending on how my job goes.

Extras:

- I have an uncle in section 8 real estate in Philadelphia with 40-50 properties who lives out of the country (this could mean I have access to additional capital if needed).

- I have some family in Denver, including a great-aunt who is a Broker there (lives in Boulder, CO). She is getting me set up on MLS.

- I have a great uncle who is a master fabricator in the CO area which leads me to believe he has a lot of contractor connections in the area.

- I have an uncle/aunt who live in Englewood, CO, not real estate related.

- Will be making a couple trips to Denver before moving at the end of August.

My initial research has yielded the following:

Using an FHA I should be able to afford appx 300k property with a little bit left over for rehab/reserves. I've seen a few properties on Zillow in the 3/2 - 5/2 bed/bath criteria in this price range. Looking in the Westminster, Lakewood, Asmar Park areas currently. I live in the smallest bedroom and rent out the others to qualified tenants. At the very least, this will drastically reduce my housing cost if not covering the entire cost and the mortgage. I know I have some deeper analyses to do, but am waiting until I have MLS at my disposal to start doing deep dives.

My process after that will be FHA pre-approval, monitor Zillow/Redfin/MLS daily for new deals, offer on 5-8 deals per week, and hopefully make something happen!

My main question is, IS it possible to achieve a House Hack through FHA in the Denver area by September given my current situation?

Thanks to all those who have read through my post! PLEASE respond with any advice, pointers, feedback of any kind! Have a great weekend, everyone!

Craig Curelop · Answer

@Jake Couzens - Denver is a great place! And in my opinion, one of the best places to house hack. I am going on my fourth house hack, have helped hundreds of others around Denver, and thousands of others around the nation! I've never heard anyone regret getting into a house hack.

It is 100% possible for you to get a house hack with your criteria. You will want something that is pretty turnkey because you won't have much left over for a rehab.

DTC is a great area and you won't have much trouble getting renters. However, property prices do tend to be a little higher down there.

You will not be able to get a loan while in forbearance. So... I would recommend continuing to make payments on those student loans if you are able to.

Hope this Helps!

Matt M. · Answer

If you work in DTC and have to drive there, I wouldn't move too far North passed maybe 6th. I'd be looking in Aurora and possibly Littleton(the other areas will be above your price point).

Writing 5-8 offers a week will be torture for your Aunt. Lowballing won't work in our market. It will just waste your time.

Steve K. · Answer

@Jake Couzens Considering your price point, and that you’ll be working in DTC, I would agree with Matt M’s comment that you will want to avoid commuting across town from the Northern suburbs. He gave you great neighborhood suggestions. Athmar Park is also a good call (and Barnum just to it’s north). I’ll add to the list Ruby Hill, Indian Creek, and Harvey Park. All are still among the most affordable Denver neighborhoods, relatively close to DTC and also downtown. All are historically low income but are rapidly being redeveloped with new parks, mixed use developments and public transportation, and definitely “up and coming”. In your price point unfortunately you will have lots of competition. You may need to have your aunt write 5-8 offers a week even if you’re offering above asking price. As an example, an agent in my office wrote an offer on a condo priced at $270k last week, and lost to an offer that came in $50k over asking! The “entry level” price point is super hot in Denver right now. Ideally your aunt will have access to off market/ premarket deals, as properties in that price point in reasonable locations and condition are selling really fast and often above asking price currently. Good luck, and welcome to Denver! I think we may actually be turning into NYC right now though. But hey, at least we’ll always have the mountains nearby and the sun shining 300 days a year!

Lizzie Carver · Answer

Hi @Jake Couzens! I relocated to Denver 2 years ago and my boyfriend and I bought a duplex in Athmar Park for BRRR and currently live in one of the units. The neighborhood is a great value, one of the few that isn't crazy pricing like Wash Park and Platt Park but still just as convenient (we used to drive 10 minutes to our downtown jobs without getting on the highway!). I will say that we don't see anything come on the market for $300k and if it were to, I can just about guarantee it will only have 1 bathroom which could be tough with roommates and it would need a lot of work which would push your deadline a couple months. Since you'll be working in DTC, Westminster will be quite a hike so I would look no farther north than Lakewood which has good deals or just south of Denver in Englewood and possibly parts of Littleton. Townhomes will get you farther for the $, but keep in mind any restrictions they may have on things like renting and parking. I try to avoid HOAs because the board can always change the rules...always helpful to get on the board if you are in one though!

Jake Couzens · Answer

@Craig Curelop I'm very thankful to have the GOAT of house-hacking respond to my thread!

I will resume the payments as you suggested (even better since it's all principal with 0% interest during Covid) and will keep searching.

Since my savings are just enough for a basic down payment at this time, I'm considering asking some of the family to consider partnering so I can swing a higher-value property closer to DTC area.

I've listened to your podcast and was wondering, do you have any advice unique to the Denver area?

Thanks for taking the time to comment!

Jake Couzens · Answer

@Steve K. Thanks for the recommendation - I will definitely add Barnum and the others you mentioned to the list, and dig deeper in that general area given the consensus so far on the thread.

It sounds like I might need to leverage my family connections in the area in hopes of sourcing a pre or off-market deal. Your story about that condo makes it seem like that would be my best bet!

-----

As an update on my previous response to Lizzie where I mentioned a Lakewood property I saw, that property as well as 3 similar ones I saw have all gone under pending sale within a week of being listed - looks like the market is red-hot right now as you mentioned!

Jake Couzens · Answer

Matt, I am honored to have an experienced BiggerPockets member comment on my post!

I will definitely be adding Aurora and Littleton to the search. Thanks for suggesting those areas.

On the podcasts, there is an emphasis on consistently making offers AND on being okay with a lower standard of living while keeping eyes on the prize - that was my justification for pushing further North, as while it would be a longer commute, the consensus I have gathered is that North Denver is the next up-and-coming area. When I plug in Warminster and my office I get 30-40 mins on Google Maps. That being said, I will look closely in the areas you mentioned because I'd obviously prefer not to travel so far.

Do you have any other insights to the Denver market in my price range?

Any obvious things I might be missing?

Based on what you said about offers (I don't want to torture my Aunt) should I expect to be paying around or above asking price on any property?

Jake Couzens · Answer

Lizzie,

First off, thank you for replying! There's a lot of useful pointers in your post.

I will look further into Athmar park given your recommendation - appreciate that! I will also highlight those other neighborhoods you mentioned as they seem like really nice areas.

Are there any obvious areas or microneighborhoods that you would avoid completely? Warzones? etc?

I recently saw a listing in Lakewood area that was a 4/2 and basically divided into 2 units with separate kitchen areas etc for 320-330k range. I know you mentioned you don't see much like that on the market in the 300k range - did you mean Athmar specifically, or perhaps this is a dishonest listing that doesn't show the true condition of the property?

Advise a Newbie Who's Moving to Denver Area in September - HH?

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