House Hacking in North Denver \ Boulder area.

[Mathew Fuller]

Hello,

I'm new to the home buying process, and  currently looking to buy a home to house hack in the general north Denver \ Boulder area (Erie, Broomfield, Westminister, Longmont, Arvada). I am approved for 450k for metro loan, and 400k for conventional, and looking for 4-5 bed room homes. However, I am debating if I should go with the no money down metroDPA loan, that carries a 5.5-6% interest rate, or the 3.5% down conventional that is rated at 4.5-4.7%. My goal is to rent out all the rooms except for my own, and have that cover my mortgage. What's attractive about the no money down is that the money I have saved I can use that for cushion. As of right now if I put a 3.5% down payment, it would eat up all my savings, which I know isn't smart. I am hesitant to wait until I can do a 3.5% down payment without running me dry, but I don't want to miss out on potential appreciation \ cash flow opportunity. Also, looking at posts on Craiglist for rooms, I feel fairly confident I could cover most of the mortgage and some, even with the metro no money down loan, although metro loan would leave me with less money to pocket.

My goal is to rent out my rooms and have my mortgage paid for, or most of it paid for. I am just worried about making a catastrophic mistake, either be jumping in too early or jumping in too late. 

Thoughts? And thank you very much for your time.

[Joaquin Camarasa]

Hi Mathew, 

I bought my house in Alameda & Havana in Aurora two years ago. I have used exactly the strategy you are describing. I house hack for the past two years and I have not paid a dollar on mortgage. I used an FHA loan. I did not know all I know now when I bought my house.

You described exactly how I did my first deal in Denver area. My mortgage is fully paid and I still have cash flow. I would recommend you to wait until you have a bit of savings and use a conventional loan. 

I have not gone a month without a tenant for any of the 4 rooms I have been renting but It can happen. In the area my house is I have been renting each room at $650 - $700 without problems.

As soon as you save a bit go ahead and do it. I recently moved to Virginia but still have the house in Aurora. If you need any help with trusted real estate agents who are investor friendly in the area. Let me know. I got good friends in the business.

I miss Colorado man, let me know if you have any more questions. I'd be happy to answer.