All Forum Posts by: Brendan M.

My advice is sell it, move into something with better returns. That combo of rents, HOA, and current value is not nearly as strong of a return as you could get if you 1031ed into a 4-10 unit multi using your proceeds for 20% down. Even if you exchanged into a middle of the road MLS or loopnet deal you could almost guarantee better returns, even in this hot market.

@Anthony, yes. People on here seem to gloss over this a lot, keep in mind a refinance is not free. Expect this to cost a couple thousand at a minimum, probably wrapped up in the loan amount, with risk for an increased rate.

When I started out people talked to me about refinancing like it was some magic bullet but if you're on an owner-occupant loan and refinance into a conventional/investment loan, there is a real chance your rate will go up substantially. I just refinanced out of a VA loan into traditional investment on a 4plex and my rate jumped from 3.5% to 4.85%, and my principal increased $9k. Now for me, this was worth it to access the VA benefit again for future use, but it's not always easy to pull the trigger to restructure into lower-quality debt.

Reach out to an agent, they can get you set up with the actual MLS listings instead of zillow/redfin. I'm sure you'll have half a dozen reach out just on this post.

As far as expectation management, you wont find a cash flowing 2-4 unit on the MLS using FHA with 3.5% down and PMI in Denver. You may, however, find that you can live for less than market rent doing this, while squaring away money via equity paydown. Which can be just as good as cashflow. But it's gonna feel more like getting a rent discount than making money.

Have used VA loan to buy several small multifamily in Colorado Springs. Keep in mind the type of neighborhoods you find 4plexes in are generally not super great so keep that in mind since you'll have to live there. Old Colorado City is nice but houses tend to need a lot of work as theyre 100+ years old. Lot of multis by Ft Carson but it's a sketchy area. North of Peterson is not too bad. Theres a large 4plex community west side near garden of the gods, these tend to fetch higher rents than the rest. You can look near Fountain but there are unresolved water issues there recently and also it's not as in demand as more central places.

I wouldn't buy 1b/1ba units, they're much harder to rent with the abundance of affordable 2/1s.

Feel free to message me with any questions or if you want to discuss locations or exoeriences buying multis with va.

For sewer and trash, i used to bill tenants a flat rate of $60 per door for a 4plex (4x2/1) and that usually covered it. Now i just have a billback clause in the lease so they cover the exact amount.

Matt,

I'd consider myself a literal resident expert (pardon the pun) on house hacking in Colorado Springs. Have done it 3 times in this city. With your service youre in a good position to house hack. 2-4 units are ideal since you can get a VA loan on these for 0 down.

Regarding laws, a lot of the discrimination laws have limitations for if you're also going to occupy the residence, so I encourage you to research the protections you're offered as an owner-occupant under these. Feel free to shoot me a message if you have any specific questions.

@Christopher Morin, you might be interested in this.

Yes theoretically it should be able to be used but check with your lender to be sure for your specific circumstance.

I'm using this as an opportunity to diversify my holdings. Currently, my portfolio is exclusively small multifamily. As appreciation in this market segment has outpaced (locally at least) other parallel segments like SFRs, I think this provides a good opportunity to capture the appreciation experienced while mitigating potential risk of any one segment taking a hard hit.

Additionally, the appreciation appears to be largely unjustified (i.e. NOI has not increased nearly in proportion to the appreciation). In my opinion, that's not a sustainable trend and some bounce-back at some point would not be unexpected or unwarranted.

Best advice I can offer i shop around a ton. Ive gotten quotes ranging from $1200 to $15,000 (no joke) a year for the approximate same coverage from different companies. I shop around annually and find even the same companies can change significantly in a year. The more you shop around the more likely you are to find the right fit for you. Just be aware of what exactly you're getting if you find a deeply discounted rate.