All Forum Posts by: Ben Einspahr

@Brian Kooienga I would recommend Andy Rhones with CCI. Here are his contact details + interview with him taking about the process

@Travis Tinnes welcome to BP and congrats on that first post! I really like the last part of your comment at the very end wanting to create long term generational wealth. That was one of many reasons why I originally got into REI.

A combination of flipping and STRs can be a very successful strategy. Finding properties that need a little love, put some sweat equity into them to make it really shine, then rent it as a STR.
Side Note: there are only a select few cities in the Denver Metro Area that allow non-owner occupied STRs.

On the other hand, just flipping by it self is more of a job imo. You are only as good as your last flip. Vs rentals/ STRs can create passive income that will produce multiple streams of income.

One thing that I would recommend doing until that boot camp is get out there and network. Connect with others that are where you want to be in 3-5 years. Here is a link to all upcoming networking events in Denver

Best of luck!

@Kevin Sobilo @Alan Asriants @Scott Trench  @Conner Olsen
All excellent responses! I am glad to hear mixed answers and spark a small debate :)

My thoughts

While living there: 

Liability. Whether you are living in a home with or without a renter, it is a liability. Home = liability. 

The only exclusion is if you are making money while living there.

After moving out:

Asset. After you move out and turn it into a renal, then it transitions into an asset. Puts money into your pocket every month.

Part 2 of my question

You move out of the house hack but your are still negative cash flow every month. Your overall ROI is 70%+ but from a cashflow prospective, you are negative. Still a liability, right?

Example:

Note: These comments do not change the fact that house hacking is a EXTREMELY powerful tool to build long term wealth through REI

It is a common argument whether buying a home is considered an asset or liability. IMO that home is a liability b/c it takes money out of your pocket, not back in. Even though, yes it is appreciating.

Now, my question to the BP community...

If I buy a house hack and it decreases my living expenses to $500/month, would you consider that house hack a liability or asset?

Excited to hear everyones thoughts!

@John Bolstad Excellent work! Great job thinking outside the box and adding the additional bedroom in the commons area for you to live.

The great thing about house hacking is the amazing return you receive from the low downpayment. 

I have been lucky enough to execute the same strategy a few times in Denver. Living there and decreasing my living expenses was great. After moving out, turning the house hack into a rental and repeating the process is when my eyes really opened and my wealth accelerated.

As an active house hacker who enjoys helping others do the same, I find myself analyzing properties every day. 

Unfortunately, many of the deal analysis I have done in the past have already been sold.

Going back through my old analysis, I have 2 choices:

1. 1. Let them sit on my computer and collect dust...
2. 2. Share them with the BiggerPockets community for others to learn from!

I'll choose number 2!

Analysis Date: June 2023

About this house hack

• -5 bed / 3 bath.
  • -Main level is 3 bed/ 2 bath
  • -Basement mother-in-law is 2 bed/ 1 bath
• -$530,000 price point
• -2,000+ sqft

Why I like it

• -Separate entrance to the basement
• -High bedroom and bath count
• -Ability for 2 sets of washer and dryer
• -Basement bedrooms already had egress windows
• -Plenty of parking

Potential renovations

• -Framing small wall to give guest on the main level privacy
• -Exterior landscaping
• -backyard privacy fence for guests

What my numbers look like AFTER moving out

A Few Photos 

Summary:

Numbers for this property are VERY tight with the higher interest rates. 

Might make more since as a life style house hack vs future rental house hack?

Benefit, you are getting 60% + return on your initial investment.

Deal Analysis Spreadsheet

If you would like a copy of the spreadsheet I used for this analysis or see some others I have done, reach out! 

I am happy to share.

@Ralph Noyes Great post! 

Breaking your lease- Your rental lease ends July of 2024. That does not mean you have to wait until July to buy. $2000+ cost to break a lease can be a lot but when looking at the numbers (decreased living expenses, appreciation, dept paydown), the $2000+ cost is typically recovered in a few months.

Buying detached vs. attached- I can relate. Having a family of our own, we are wanting more and more privacy after each house hack. Here is Denver, the less expensive solution is a walk out or walk up basement mother-in-law. Detached ADUs come with a premium price tag and after getting under contract appraisers can have a tough time getting it appraised for your purchase price.

What I would recommend

1. Connect with an investment friendly agent and lender now and start building the relationship. 2. Get pre-approved. If something comes on the market you like, you will be able to act fast.

3. Target buying between Halloween and New Years! People that are selling have to sell. Not many buyers. Easier to negotiate seller concessions to buy down interest rates.

@Emiel Winkelmolen big congrats on you upcoming acquisition. Very exciting. Rent by the room is a fantastic strategy for your first house hack. You are getting hands on land lord experience and with cost of living increasing, individual room rentals are becoming more and more popular.

I have a lease agreement that is tailored for our rent by the room clients covering maintenance of property and common areas, utilities, and rules and regulations. However, Colorado Law will be different than Kansas Law so when executing lease agreements make sure they align with your local laws. 

It is very common to hear "have an attorney review your lease agreement before executing". This is easier said than done b/c that can be an expensive pill to swallow being a first time landlord. This is a personal decision and comes down to your risk tolerance. See if your agent is able to help you out?

A couple expectations to clearly communicated upfront with tenants:
-parking

-food storage

-common area cleaning

-quiet hours

-communications with land lord (email vs text).

Best of luck!

@Jake Andronico great post title. Got me to click :)

Way to crush it and set yourself up for long term wealth building!

Having parents co-sign for the loan (if possible) is such a powerful tool that I do not see used enough.

You mentioned renting to college students? Were these people you already knew? I have found it very helpful to have their parents co-sign on the lease agreement too.

Rent by the room house hacking is not sexy if people do not "get it". After they see the full benefits (decreased living expenses, appreciation, debt pay down from your tenants, depreciation), then their mind will change :)

What is the business plan transitioning from HH#1 to HH#2?

@Ken Thom who we typically refer out depends on portfolio size and what you are looking to do. Someone with 1 or 2 investment properties does not need to be paying big bucks every year to get their taxes done. 

On the other hand, if you have 5 plus rentals, looking to 1031, and qualify for REPS,  I would recommend going with one of our more seasoned CPAs that will cost you but worth the money.

What category would you fit into?