All Forum Posts by: Ben Rhodin

Hi @Ty Wright ! 

First of all welcome, and congratulations on starting your investing journey! With that sum, and moving to the Denver area I would definitely suggest you House Hack for your first property here. It will allow you more opportunities in the long run, and keep more money in your pocket. With that amount of cash, you will be able to get into a nice house hack ( based upon qualifying for a mortgage of course) since you will be utilizing a low down payment loan and you should still be able to have some leftover for reserves, and making certain repairs if necessary. Then after a year you move out, rent your room, and repeat the process.

House Hacking will provide you the opportunity to get into your first property and start learning the ropes with less risk than a traditional rental. What you need to figure out is what you want out of the house hack, however. Do you want to completely cover your living expense, live for free, and potentially even cash flow above it? In that case, you will most likely do rent by the room situation and take the smallest out of the areas for yourself. Or do you want to live comfortably and only cover maybe most of your living expenses? Then you might look into a duplex, or find a single family with a separate living space, or one that can easily be converted.

It's all going to depend on your priorities, are you looking to sacrifice some comfort in order to jumpstart your investing, or are you OK taking it slower, and living comfortably while you do it? Either way, I would always suggest house hacks as first investments. If you want to discuss more, I would love to connect and chat more about your goals here in Denver!

@Conrad Grimm It can be a tight market for sure! But finding deals all depends on your personal needs/goals. Sometimes you have to get creative, not just in your means of finding the deals, but also what a "deal" looks like. From house hacking, rent by the room, to creating non-conforming duplexes there are always opportunities to make a deal happen, even on the MLS.

@Dare Adebonojo Welcome to the area! If you would like to connect when you get here there are some great monthly meetups and groups to get to know other investors in the area. I am also happy to help any way that I can when you get here! Feel free to reach out with whatever.

Is that $600 what he is getting in rent, or true cash flow? You have to factor in expenses as well (Insurance, management, taxes, and reserves), if that is true cash flow than that is a crazy good deal for him (36% CoC return)!

I agree with @Joe Villeneuve that partnering would be the best bet for your first property, and in the same idea why I would suggest house hacking in your own area first. It is the best way to learn the ropes and understand all the aspects that go into managing a property without all the inherent risks. Knowing the ins and outs of managing a property, finding good contractors, and working through everything that comes up will help you in the long run when you have to put your trust in other people out of state to manage your investment.

Also, a factor to consider is that if you are able to house hack, you not only get the cash flow (if you accept being less comfortable, it's not hard to cashflow a good amount) but you also cut out your living expense. This will give you more money, and freedom to invest elsewhere because you have cut out your largest monthly expense.

Hi Taylor, It all depends on what your goals are. A lot of those cheaper markets in the Midwest are high cashflow markets, which is good if you want to subsidize your income and be able to get out of a job as quickly as possible. Versus somewhere like here in Colorado, where you can find cash flow but you also get a high appreciation, which is good for long-term goals, and if you arent looking to quickly subsidize your income. 

Like the others have pointed out there are other challenges with going out of state, where you can't personally be there. You really have to take the time and build up a team that you trust out there and can act on your behalf. It is more work upfront, and has a steeper learning curve, but can pay off once you have a well-oiled machine working for you in the market.

My personal opinion and how I tell my clients is house hack here in colorado each and every year, getting a low down payment loan. This way you get the appreciation with only investing 3-5% for the downpayment ($12k - 20k for a $400,000 property). Then for the rest of the year, if you keep saving and have additional capital, then look into an out of state market, and invest there in a lower-priced area, but making sure you have enough for the next house hack next year.

Welcome! I'm going to echo what Steve said somewhat. Since you mentioned your cash situation I would suggest a House Hack, because of the low cost of entry with a low down payment loan. If you can sacrifice some comfortability and rent by the room it can be a lucrative option considering that you will also not have a living expense. Then you can use the savings and cash flow from that to start investing in other areas. 

@Dashiel C Neimark

Denver and Boulder are definitely tough markets, in terms of regulations and high prices. The surrounding areas however there is still great potential in either traditional rentals or House Hacking. House Hacking is especially lucrative because of the low initial capital that is required. Broomfield is tougher because of their zoning regulations (like boulder and Denver) so makes rent by the room House Hack harder. Rehabs are not necessarily worth it unless you are able to get a fantastic off-market deal. You just aren't seeing that value add opportunity here as you do in other markets, you put 40k into rehab, you usually get 40k of value. Duplexes/triplexes are hard to come by and thus come with a high price tag. 

My personal suggestion is looking at the Denver Metro Area, and doing a House Hack with rent by the room, or finding a single-family home that you can turn into a quasi duplex, either through a basement with a separate entrance that you can block off and make a separate unit downstairs.

@Dashiel C Neimark Its most certainly not too late to invest around Denver, or down in the Springs. The surrounding Denver areas, Arvada, Aurora, Westminster, and so on are great opportunities for House Hacking. With renting by the room, and taking some comfortability hits you can certainly find great opportunities. Can take some creative thinking, and being able to move quickly, but certainly possible! I recently closed on a deal in Arvada for myself as a rental.

Hi @Jorge Valdez ! Welcome to the forums, I would agree with the others that narrowing down your focus is going to help. From your list, you have a lot of good markets for house hacking, and so you will just need to pick a few to really narrow your focus, otherwise, you will find yourself overwhelmed, and not be able to pull the trigger. 

Finding a duplex will be more challenging, especially here in Colorado, they are just too popular and pricey. I would suggest trying to find Single Family homes where you can have separate living spaces (walkout basements, separate entrance) that way you get the comfort of a duplex without the price. 

Good Luck to you!

@Jessica Mead You're welcome! Feel free to reach out whenever I'm more than happy to help. Good luck and please do come to share any details!

Welcome, @Jessica Schenk ! I am once again going to agree with @Jenny Bayless on getting a base hit. BRRRR properties are getting tougher and tougher to find, especially a full BRRRR. If the expectation is to completely pull out all invested capital, then that will be hard. That being said a partial BRRRR and getting out a portion of your invested funds will still provide you a great deal.

I would suggest focusing more on the process, instead of finding the "perfect deal" so you can learn and get comfortable with how each step works. So next time when you do find a great opportunity you aren't stuck on the how, and you are able to move quickly. 

That being said, an agent is a great resource for you as a new investor, to help guide you through the process, and they will most likely have the connections you need for lenders, contractors, and so forth. They are there for more than just finding a property.

Best of luck to you!