Finding A House Hack Deal Near Denver Colorado

[Taylor Burns]

Happy Friday Everyone!! 

My name is Taylor Burns and I am looking to get into a SFH 4 bed 2+bath house hack deal. I am looking around outside edges of Denver. I have been looking on the MLS and supply is very limited.

One thing I have heard over and over is that you need to make money when you buy the deal. All of the properties I have found on the MLS put me in a negative cashflow situation with renting the rooms out. I am starting to think I may need to start doing direct mail marketing/ finding off market deals.

Does anyone have experience in doing this for a house hack? My approach here would be using a 203k loan to fix things up or find hard money financing then refinancing once the updates were complete. I have currently been looking at FHA and CHFA loans, as my start up capital is limited.

Has anyone taken this approach to a house hack??

Any insight is helpful!  

-Taylor 

[Eric VanKirk]

@Taylor Burns When you say the properties put you in a negative cash flow, is that in the hundreds of dollars or thousands of dollars. The way I look at it is I definitely want to pay as little as possible while house hacking, but paying a few hundred dollars a month while others pay the bulk of my mortgage is the goal. As long as I am not paying more than market rents for my portion then I believe it is worth considering. My big question is, how much will I be netting when I move out? If your PITI is $2,500 and you are getting $700 a room, that leaves you with $400 to make up the difference. This means if you moved out and could potentially get $2,800 in rent you would have $300 per month in income. Are you comfortable with that? That is how I look at my house hacks.

     I assume you are looking at 4 bedrooms to maximize your income, but don't ignore three bedrooms with a basement in which you could possibly add another bedroom and/or bathroom.  If you can have a separate entrance to the basement you could potentially rent that unit out for even more.  Just a thought.

As for the direct mail marketing I have been doing that for years in regard to pre-foreclosures with much success. If you are trying to find something off market then I would warn that the return comes through continuous marketing, and takes time. While still looking on the MLS keep an eye out on your drive and, if you see a house that looks interesting, check out the public records, write the owner a letter, or several, and see if they are interested in selling. You may even find a great owner finance or lease option this way.