@Daniel Dixon and Patricia Dixon bought this ranch home in February 2020. It's their first step into real estate investing. (They've already taken more steps out-of-state in Indiana.) The home is in unincorporated Adams County, right on the line of Westminster, just northwest of Denver.

It's another good example of how even in crazy markets like Denver, Colorado Springs and elsewhere, if you get creative, you can offset your mortgage or even live for free with a good house hack.

Here are the numbers, the story and some pictures at the bottom.

The numbers (big picture)

Purchase price: $376,000 w/ a 10% down payment and about $7200 in closing costs.

All-in monthly payment: $2144

That's $1,844 for the mortgage payment (principle, interest, taxes and insurance); and around $300 for gas, electric, water, trash and internet

Rents:

They rented it different ways over the last year.

STR/Airbnb: $2,360
Medium-term furnished, rent-by-the-room: $1,550 ($750 for one room; $800 for the bigger bedroom.)

Cash flow: between -$594 and +$216.

Put another way ... depending on how they rented it, they paid either a total of $594/mo in rent or they lived for free plus $216/mo in cash flow. Not bad.

Put yet another way ... If you had been paying the average Denver rent of $1631, then the above scenario is a net positive swing of between $1037 and $1847 per month!

Quick side note on their Airbnb numbers. That's an incredible revenue haul for two bedrooms in a basement in the suburbs, and it speaks to their hustle.

The home

A 1,650sf 4br/2ba SFH. Remodeled nicely, with 2br/1ba up and 2br/1ba down. The big draw was the back door that could serve as a separate entrance to the basement. We love searching for these homes in Denver and Colorado Springs (the two markets we work) to give house hackers the option of a little basement apartment separated off from where you live.

Location was close to the highway to get into downtown Denver in 15 minutes, up in Boulder easily, or out into the mountains.

How'd we source the deal?

A good ole' MLS search.

The offer/negotiation

It was originally listed for $385,000. It had fallen out of contract twice -- once after just a few days under contract when buyers got cold feet; the other time for a lending issue.

With the sellers a little bitten by this, our buyers -- Daniel and Patricia -- came in lower at $370,000 but offered to take it as-is and with a 20-day close. (A quick close and removing the possibility of asking for anything during the inspection were intended to ease the fears of sellers twice bitten by failed contracts.)

The sellers countered at $380,000. We pushed back at $375,000. They declined. We offered $378,000 with $2,000 of seller concessions. They said no to concessions but offered to drop the price to $376,000. Buyers agreed!

It was actually a longer negotiation than most -- about 3 days. Negotiations are much quicker just a year later when inventory is literally half of what it was when they bought and sellers have as much power as they've ever had.

Repair/rehab costs

Buyers intended to rent the two basement bedrooms out separately either as a short-term rental/Airbnb model or a mid-term rental. Either way, they furnished it and had some other costs up front:

Door installation (for stairwell to basement unit): $400
Keyless lock: $80
Radon mitigation: $850
New basement windows, including 2 egress: $8500
Furnishings for downstairs (all second hand from FB marketplace): ~ $2000

TOTAL: $11,830

Home value now?

Based on comps, I think it would sell today, one year later, for between $395,000 and $400,000

Considerations

Future house hackers should be aware of your city's laws on two topics:

What are the city's Airbnb laws?

Most cities allow short-term rentals only in your primary residence. Two notable exceptions in the Denver metro area are Arvada (read here) and Littleton (see here).

What are the city's unrelated adults occupancy restrictions?

For a look at what most cities currently allow, see this post.

Pictures