All Forum Posts by: Ben Rhodin

Hey @Daniel Baran! Welcome to the forums and you will definitely get some solid advice here! 

What's causing the 1-2 year timeline to get out here? If you are able to get out here earlier, you'd be able to take advantage of a low down payment loan. Instead of having to do 10% down (if you do a second home loan), or 20-25% if you did an investment property loan. Just a thought there, but If you are stuck where you are now for another 1-2 years, what is stopping you from house hacking a property out there? You could take advantage of the 2 years and get 2 properties out there, and then get your third when you move out here, all with putting about the same down as 1 property out here. 

You could also grab a property out here now, if your current location isn't conducive to house hacking, and then pick up another one when you get out here. I wouldn't limit yourself to the thought that you can only get one property.

As for your questions... As @James Carlson stated there is never a guarantee as far as STR regulations, but Arvada, and Wheatridge are certainly the safest as of now. Personally I Airbnb a portion of my househack here in Arvada, and have numerous clients that do it as well and are able to cashflow with just STR a basement unit. I also inform my clients of Westminster's lack of regulations, it's a coin toss as to where they end up when they do choose to implement regulations. So it depends on your risk tolerance, and make sure to run your numbers so that you have back up plans if STR goes out the window.

I would also like to say that it isn't impossible to cashflow without STRs here in Denver, especially if you are buying an investment property. You could go with medium term rentals, rent by the room, or splitting a single family into more than one living area (Basement unit or ADU). It does require getting creative, but there are other ways to cashflow if you don't want to STR!

Wish you the best of luck, and please feel free to reach out!

Hi @Kitty Horeis!Definitely a great place to be in and good on you for starting to think creatively on how to utilize that equity! I would first ask you what your primary goal is, and when you want to reach it? Then on top of that it will simply come down to where your money goes the furthest. You have the most security with a paid off home. But if refinancing it, or taking out a HELOC will get you into a couple more properties and in total over your portfolio you are now creating more cashflow, then your money is working harder for you, and you have multiple properties that are appreciating, and gaining equity. That's typically how I work with my clients to look at their portfolios, and how to best utilize them.

As for whether doing a HELOC or Refinance, there are arguments for both. A refinance you would get better rates, and possibly pull out a bit more capital, but you'll be paying for it for the next 30 years even if you don't use all of it. A HELOC you would have worse rates, but you would only pay for what you use, on a interest only basis, and if you pay it off (through a BRRRR or otherwise) you can then reuse it, and recycle capital. I would get with a mortgage broker and explore the different options in detail!

Happy to help further! Also, where are you looking to invest?

Hi @Ramin R kamal! Wanted to jump in on the conversation! First of all, welcome to the forums and welcome to REI. I 100% agree with the comments above about preliminarily chatting with a lender, as what you can qualify for is going to be the biggest hindrance for your purchasing. I would stick conventional, and consider house hacking as some of my colleagues suggested above. The biggest bonus of it will be the utilization of a low down payment loan as you are buying the property as your primary residence. You could also look into using some sort of DP grants or first-time homebuyer programs, as for example, Bank of America runs a grant for using them, that can add up to about 18k towards downpayment and closing costs. Which can get you into a home much quicker, than saving for the DP. If you go any other route, as in buying a strict investment property, you will need to put down at least 25%, instead of the 3-5% with a primary residence loan.

Hard Money won't help you much, as they still have the same requirements and worse rates. I don't think anyone else asked, but what is your current living situation? Do you own your current home, or are you renting? If you do own your home, then you could look into pulling out some of your equity in the form of a HELOC or Refinance and use that to invest in real estate. If you don't and you are renting, then I would push you even further towards house hacking, as then you will get the double benefit of eliminating most, if not all of your living expenses, which in turn will greatly increase your savings rate.

Other options could be, find a partner who has the capital, and you do all the heavy lifting of managing, and handling the property. There is always a way to invest in RE and sometimes it just takes a second set of eyes to find it! There is no one size fits all solution :) Feel free to reach out with any further questions!

Hey @Alan Le! Welcome back, and congratulations on the house hack! It sounds pretty identical to my house hack and rental here in Arvada. It's one of my favorite strategies for house hacks and rentals here in the Denver area. Sounds like you are doing most of the work yourself? I completely redid and finished the basement unit of my rental by myself over a few months as well, its tough work but well worth it in the end!

What are your plans for the next one? Stick to the same principle or change up and diversify a bit more? Would love to connect and chat properties, since we are so similar would love to see how you are handling yours, and if I can offer any words of wisdom either on your current one, or preparing for your next one!

@Ramiro De Leon! Welcome to the Forums, and thank you for your service! You definitely are making the right choice moving out here to Denver, it's an amazing place to call home and has so much to offer! 

As @Stuart Grazier mentioned, the first thing you need to do is get hooked up with a fantastic team on the ground. I would focus on finding an investor-friendly agent, that both have the knowledge and experience working with out-of-state investors, and VA buyers. As there come some additional caveats with VA loans as far as competing in the market goes. Finding the agent first is the way to go, as they will have connections for Lender that they prefer to work with. Working with a well-oiled machine is much better than working with an agent and a lender who don't know each other. It makes the whole process that much smoother.

Once you have gotten set up and discussed your goals with your lender and your Realtor has given you the rundown of strategies here in the Denver market, it will be easy to identify where you are heading. You can fantasize as much as you want but if the lending or numbers don't support your goals, it's your Realtors's job to work with you to find the best course of action!

As @Jeff White mentioned there are some great strategies that work well to create cashflow opportunities while you occupy your property as a House Hack, but it's all going to come down to what you want as far as a living situation and income goals. So determining what your minimum comfort level would be as far living is, and what your goals are for income while you occupy the house hack will be the most important knowledge for your team. Cause if you want to live in an A+ property, without roommates, in Denver proper, and only do a long-term tenant in a separate unit.... but also want to cashflow each month, that's not going to happen.  So figuring out what your #1 goal is, and then what you are willing to sacrifice will set you on the path of success. Cause I tell every one of my clients, House Hacking isn't a one size fits all strategy. Everyone's situation is different, and what worked for one client isn't going to work for another. So working with an agent that will work with you to develop a plan of attack is super beneficial, especially when you aren't in town, or know anything about the city. 

Happy to answer any other questions, or provide any next steps for you! I have another client who is in a pretty similar situation, based in TX but is currently deployed in Korea looking to come out here in Summer!

Hey @Theo Georgelos welcome to the forums! What you will begin to find in the Denver Metro is that creativity is key if you are looking to create cash flow. Appreciation will be a strong constant in most of the Denver area, but if you are looking to get out of a W2 or just offset your expenses with REI as quickly as possible you will need to make deals, instead of just hoping that something off the MLS will cashflow as is. As @Bryan Balducki mentioned house hacking is a great intro, and safe way to start your investment journey. It will provide you the benefit of offsetting your living costs, collecting rent (possibility of cash flow), and utilizing a low down payment. It is much safer than buying an investment property as if you are unable to fill your vacancies at least you are just paying your own housing, and not your housing and another mortgage. 

That being said, there are still plenty of ways to create cash flow here in Denver, and your opportunities will depend on what you can qualify from a lending standpoint. But a few options are Short term rentals, Medium Term Rentals, turning a single-family into a multiunit through an ADU or a Mother-in-law suite, or renting by the room! It all comes down to how much hustle and time you are willing to put in as far as managing and setup.

Happy to connect more and provide some feedback! 

@Bog Morgan It is attractive for a realtor definitely, but the major thing is that there is no guarantee for the Realtor. Until that cycle has been completed we have no security unless you have signed an exclusive right to buy, and an exclusive right to list (which you wouldn't be able to unless there was a deal to list). And as I mentioned, if you are looking to flip, you are most likely going to have to go off-market in order to find the margins that you want. So we have even less security there, because now you as the buyer have to agree to pay us our commission, or else we are just hoping that you give us the listing on the end or we are working for free (which I don't know anyone that likes working for free). A lot can happen in the months during rehab, and maybe you never come back and provide that listing to us. 

And I don't mean to be rude or come off as stereotyping, but a reason agents don't like flippers is that unless the agent has a stake in the deal a lot of flippers are notorious for not being loyal. As long as you are providing buy-and-hold investors with solid deals, they will typically stay with you. But a flipper is looking at their bottom line, so if another agent pops in and says "hey, I'll list that property and all your other deals for 1%" what is securing us from you turning around and chasing that money. 

I totally do get where you are coming from and I know your reasoning, but in the end, it's the same thing as everything else. If the agent is doing a lot of business and has enough clients, you wanting special treatment and wanting to have deals handed to you isn't going to make them jump at the opportunity.  Sure you can say "well they would get a double commission isn't that worth it". But if they could bring 4 other deals together with other clients in less time and effort it took to find you your unicorn then that double commission isn't that attractive. I can also tell you that most of their other clients are thinking the same thing. So unless you are finding a way to differentiate yourself, you will probably be disappointed with it. We are also looking to make the deals happen, so like myself, I send all deals that I come across (flips or otherwise) out to my entire database of investors that I know will have a chance of picking them up. I do not tailor pick deals for clients (unless they have taken care of me) because you could choose to pass on it, and now it's too late for me to send it to someone else. 

It's kind of like going into a restaurant and telling your waitress, "Hey, if you only pay attention to me, I'll give you a 200% tip at the end" there isn't any guarantee for that waitress either. :) Just like to provide some insight on how your agent thinks as well, as at the end of the day we are running a business as well, and you are most likely not our only client looking for the same thing.

Hey @Bog Morgan! Just want to toss my opinion in here while most of it has already been brought up. As a realtor in the Denver market that does deal with flipper clients on a daily basis, there are ways to work with them as a Realtor. At the end of the day, you want to build a relationship that is beneficial for both of you. If you take care of your Realtor, they will take care of you. 

It is VERY tough to find flip deals on the MLS especially here in Denver, as everyone has pointed out, you are dealing with high competition and those sellers are dealing with commissions and other costs, so you will never get the perfect deal. Also, telling a RE Agent that you are looking for any deal in the Denver metro area is far too broad. It sounds like she set you up on an automated MLS email, and she is not hand-picking deals. Which as with any search you will be having to sort through properties, as even if there was a magical criteria you could click to sort out anything that isn't a flip opportunity, you are counting on listing agents to properly list their properties, which isn't always the case. So I agree you need to set expectations with them, but it's also important to understand what more an agent does for you other than just finding you a deal. We are not just sitting there searching for the property, that is honestly both party's job.

Also if they are working with other investors you need to find a way to make sure they send whatever deals they do come across to you and not another client. And this is why I say take care of your agent... In my instance, I still search wholesalers, off-market deals, the MLS, and other sources for deals, and when I do have a flip opportunity come up I will send them out. The issue with all the other sources of deals is that off-market, and wholesalers won't be paying a commission to the buyer's agent, so if we bring that deal to you, and you aren't willing to pay us a commission but you want us to represent you on the contract, you are basically asking us to work for free. Yes, you can "promise" to give us the listing on the back end, but that is not a guarantee for any agent. So if you want an agent who is truly scouring the earth for those deals, make sure to take care of them. If you offer to pay a commission (doesn't need to be full price) on the buyer's end and provide the listing, then that agent will be coming back to you for any properties they come across even if it's not an MLS listing. And then it will become a mutual relationship, where if you start doing multiple deals together, that agent will be happy to break their commission for you as it's a simple deal for them at that point, and they want to take care of you as well.

Just my opinion as an agent that does work with flippers, if you want your agent to do their best work for you, make sure you are the best client to work with. We do deal with a lot of wannabe flippers, unfortunately, just like we deal with a lot of wannabe investors, and hence why if you want to get into and start flipping, find an agent that has experience with it, and can accurately estimate repair costs, and ARV.

Hey @Ignacio Perez Losada! Welcome to the forums and excited for you to take these first steps!

Denver may be becoming expensive, but there are still affordable pockets around the Metro area that still produce great results for our clients. With your unique travel schedule you have the unique ability to Short term rent (airbnb) your living area while you are away, which could add a strong income for yourself! So honestly unless you want to move, I would explore the Denver market and see if you can't make it here. You will have the perk of taking advantage of the appreciation and since you already know the area you don't need to get to know a new area. Hence speeding up the process.

House hacking works great here in Denver, and I have clients that are pulling in $1000 a month over their expenses while still living there and for free. It all depends on your unique needs. If you don't care about sharing space, then a rent by the room scenario is the way to go. If you want your own area and space, you could look into either a small multifamily, or a single family with either an ADU or a mother in law suite. Then if you go the extra step and Airbnb your space while you are gone, you would definitely be able to live for free (and comfortably) and possibly pull in some cashflow.

House hacking will be the best way towards your goals, as if you factor in the rent savings it is hands down the best ROI you'll see. Along with exponentially increasing your savings rate, so you can put more capital towards other investments.

Hey @Christopher Lamp! Congratulations on the gift, and way to take the first few steps. Setting up an LLC is never a bad idea. If Flipping is the way you are going, you will need some hard money, or private money lenders in order to acquire and fund these projects. The first step however is honestly solidifying everything on the partnership end, I'm guessing you and your GF are going in on this 50/50? Get things figured out, who does what, what is the game plan, and how are you going to be scaling, and so forth. It will save you in the end, when you have differing opinions or someone thought something was the other person and job and vice versa.

I've got quite a few clients that are flippers, and have solid Hard Money contacts. Of course, as a new flipper, you won't be getting the best rates or terms as you don't have the track record. So I would focus on a small cosmetic flip to begin, just to test everything out before you sink everything into a larger project. You are going to want to get contractors, and other vendors lined up so you can hit the ground running. Another reason to start small, don't want to hire a contractor for a massive job just to find out they suck or are ripping you off.

Then it's onto the fun part. Finding the deals... the Denver market does have tough margins, but I know a lot of flippers that do well and create a business here. It's good to get hooked up with Realtors that have access to pocket listings, off-market properties, and wholesalers. Building a good relationship with a Realtor, in the beginning, will mean you are set up for when the time comes to listing the property, treat them well, and they will treat you well.

If you need recommendations, I have most things set up for Flippers, in terms of lenders, contractors, and deals as well as solid contacts for other bigger flippers that may be willing to help out and partner. Just let me know!