All Forum Posts by: Brett Deas

I was just in your situation on my first property and here is what I did.

I found partners on the unit we split all profits and expenses 50-50 (As I have later learned a very generous split for me). This allowed me to continue saving up for my own down payment while earning money and more importantly gaining experience while managing the first place. All in all, I think it is the best thing for a beginner investor to do because you learn the lesson without being overleveraged, and you can make money while not doing too much work until you can get your own. 

Quote from @Jewel B.:

Quote from @Brett Deas:

Have you thought about house hacking a single family? I don't know your situation but I would look into making the basement a separate unit and renting it out. I think a Duplex would also not be a bad idea, but from what I see typically duplex's are more expensive. If you would be going to the top of your budget I would recommend house hacking the single family. 

 How do you find out the legalities or practicalities of converting a basement to a rental? Or of splitting a house into two units?

Legalities go just look it up in your HOA, city, county, then state. If you go through that then you should have your answer. Or look up owner occupied rental and that will probably tell you. Splitting a house in two is a little more tricky and I would ask someone in your area who has done it before because it differs too much even state by state. 

Rental properties are not passive, they are a small business that require some work. 

Not every market works for SFR buy and holds. The price to rent ratio is an important thing to look at when evaluating an area and it sounds as if it doesn't quite produce a good deal in your area. I would suggest looking at other towns/cities nearby, seeing if they can work with the 1% rule.

Another solution could be looking at possible alternatives to a normal single family. Whether that is multi-units or short-term/midterm renting it out. 

For the places I have in Denver vacancy ranges from 3% over 3 years to 20%. It is becoming a highly saturated market and you really need to make the place nice in order for it to get traction. As far as estimating goes I would look up furnished finders report to give some insight, combining that with other places like Zillow and other long term sites. 

My suggestion is to decide what you want out of the property first, that could be cash flow, appreciation, or tax benefits. My first property was about 300k below the avg price for the area but gave me exactly what I wanted. 

Didn't do it personally but finished helping a client set himself up. it only has been a few months but he currently has a separate basement unit that he has put on Airbnb. It is accomplishing his goals and is currently problem free.

I would recommend you find a local STR manager and work for them for a while. Pay may not be great but once you get experience people will invest with you. In my experience, no one will partner with you unless you bring either the money or the real working experience.

As for needing money now, I would not recommend buying a property. It is not something to rely on as STR especially are unpredictable in their revenue and is highly seasonal. I do not know the area you are in but I would suggest getting a second job with a property manager and live very cheaply for a while.

Quote from @Isabel Andrade:

@Brett Deas

That’s actually a great idea! But with that how would splitting up the utilities happen ? Adding into the rent I would think would be the best deal ? 

 That depends on how you want to rent it. For short to mid-term rentals I would just eat the cost because no one wants to pay for utilities. If you are long-term renting it I would reach out to your utility provider and ask for the steps required to get the separate meter as I do not know. 

Have you thought about house hacking a single family? I don't know your situation but I would look into making the basement a separate unit and renting it out. I think a Duplex would also not be a bad idea, but from what I see typically duplex's are more expensive. If you would be going to the top of your budget I would recommend house hacking the single family. 

That is a question that brings in too many other questions to answer. Things to look at are Location, style of the house, bed/bath count, how many units are on the property, are you renting short-mid-long term? 

I would recommend you find someone in the area you want to invest in and ask them. It is very localized and market dependent.