Arvada House Hack to Stabilized Rental |Update

[Ben Einspahr]

Investment Info:

Single-family residence other investment in Arvada.

Purchase price: $435,000
Cash invested: $32,000

This is a house hack purchased in April of 2019. This property was a 4 bed/ 3 bath (main lvl= 3bed/2bath and separate mother-in-law suite above garage= 1bed/1bath)
While living there for we operated the M.I.L. as an airbnb and lived in in the main lvl.
After moving out in February of 2021 on to House Hack #2, we rented the main lvl out to a family on a 24 month lease and turned the M.I.L from a STR to Furnished MTR for traveling nurses and your professionals. They make excellent tenants!

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

At the time (late 2018, early 2019) I was looking to get out of renting rabbit hole as well as get my foot in the door in the competitive Denver real estate market. House Hacking was a win-win. The challenge was getting my wife on board. Only way to make this work was to find a SFH with separate dwelling unit so we had our own living space and privacy. All of the multi-units out there were over priced and needed a lot rehab. This house was the perfect fit!

How did you find this deal and how did you negotiate it?

This property was right off the MLS. Came on the market on a Thursday. We saw it Friday morning. Offered that day. There were 3 other offers on the table. Our real estate agent with suggested we do a quick close (my memory is a little fuzzy but I believe we closed in just over 2 weeks). That was the deciding factor that got us under contract. Not the offer that was $5,000 over our asking price. That is the benefit of having an investment friendly agent.

How did you finance this deal?

Nothing fancy here. 5% down, conventional, 30 year fixed.

How did you add value to the deal?

Main lvl was 100% remodeled so no work was needed there. The M.I.L suite was a bit out dated. We wanted to go with the airbnb route so we remodeled kitchen and bathroom. Total rehab and furnishing cost was +/- $5000. All labor was self-preformed by my wife and I. Rehab took about 2.5 months
Rental comps in M.I.l as is on 12 month lease were $1,100/month.
Airbnb comps in M.I.L after update was +/- $1,800.

What was the outcome?

Average mortgage payment through out the whole time we were house hacking was around $500. Our mortgage was not 100% paid for but it was still a hug win. With the decreased fixed expenses, this property was able to snowball me into house hack #2 that was purchased February 2021.

Lessons learned? Challenges?

Rehab will always be more expensive and take much longer than expected. When you run into a challenge, someone else out there has ran into that same challenge and probably also made a video about it too!! Youtube is a great thing!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Chris Lopez and the Envision Advisors have their process dialed in from their market specific podcasts, deal analyzing spreadsheets, and investor friendly agents. 5 out of 5 stars.