House Hack in Colorado Springs

[Daniel Hillman]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Colorado Springs.

Purchase price: $383,000
Cash invested: $40,000

My wife and I found an amazing split level that we were able to househack into two units. We will be living in one and put the other on Airbnb. We are doing a bunch of upgrades and plan on starting to rent it out in early August.

What made you interested in investing in this type of deal?

We have been listening to the BiggerPockets podcast for the last six months and just finished reading The Book on Rental Property Investing. Househacking seemed like the best option for our current situation.

How did you finance this deal?

Conventional loan.

How did you add value to the deal?

Sweat equity.

[Joseph Yallop]

Very nice! First one is always the hardest

Do you have a plan moving forward on how you want to grow?

[Jordan Malara]

@Daniel Hillman congrats on taking action! My wife and I are also in the Springs and did a similar thing this past year by turning our lower level into an Airbnb and we are also in the processes of turning our detached garage into a second STR. After seeing how well our basement performs I definitely think househacking an Airbnb may be the best way to go right now!

We're still new to the STR side of investing, but if you need anything feel free to reach out! Always happy to help out where I can!

[Daniel Hillman]

Thanks @Joseph Yallop! Our current plan is to buy another property each year for the next 5 - 10 years. We are also considering going into a larger multifamily with some friends and family if the right deal showed up. 

@Jordan Malara I love the idea of turning the detached garage into a second STR! We have some extra space in the back of our property and have considered doing something like that. We are new to Airbnb and I'll definitely reach out if I have any questions!

[Account Closed]

This sounds like a great plan! Congrats on your first investment!

[Dmitriy Fomichenko]

Nice! Congrats @Daniel Hillman

[James Carlson]

@Daniel Hillman

Congrats on the purchase. That sounds like a great property. It's great to offset your mortgage and allow you to save more to buy another property in a year or so. That's awesome. 

@Jordan Malara That's awesome. We see a lot of clients do a successful house-hack in Colorado Springs where they rent the lower half as an Airbnb. It's a great setup if you can find it. Before you go through any work to convert a second space for Airbnb, I'd make sure the city will license that. I'm not sure the new ordinance that passed in late 2019 allows for two short-term rentals on the same owner-occupied property. (You can do two STRs on a non-owner occupied home if it's eligible under the Colorado Springs Airbnb law, but I don't know about in your primary residence.) Of course, could you do it without getting licensed? Maybe. The city enforces this law only through neighbor complaints, so if your neighbor doesn't complain, then you're good. 

[Jordan Malara]

@James Carlson excellent point on checking local regulations before going forward with any large investment such as a garage conversion. We did do our due diligence and have spoken with the city STR permitting office already to verify that we can have 2 owner occupied STR permits since we are zoned R2.

However, if that wasn’t the case and we couldn’t get it permitted, then as you said, we could just test our luck and try to operate without a permit, but I personally don’t love that idea due to personal convictions. The other option that I know you are familiar with would be to just turn it into a medium term rental which isn’t as lucrative, but still outperforms traditional long term rentals.

Btw my wife and I enjoy listening to your podcast! I highly recommend everyone check it out!