Hey @Wyatt Nauman,
I think you have the right idea and investing in real estate anywhere is a great plan! I don't know if you mentioned anything about your current career or if you would have a job lined up upon moving out to Colorado to pursue your house hacking dream. I would caution and encourage you to look into the general cost of living difference from where you currently live and where you are looking to move.
When we arrived from Nebraska, we were quite shocked in the difference in costs relating to fuel, groceries, services and night life. I understand that you are attracted to the Denver and Boulder area and I would be curious to know if you have planned for the additional costs of living in these areas including the large(r) mortgage payment you may be taking on when financing 95% of the purchase price?
My wife and I have the same strategy of buying a primary residence every year and then renting it out when we move to the next home. We moved to Colorado Springs from central Nebraska in May of 2022 and bought a home to house hack by renting out the basement as a STR. The issues I ran into was the local market was already flooded with STR's and in order to be profitable you had to stand out with a home that was either near an attraction (ie great view, Garden of the Gods, Downtown, or a College) or the unit had to have amenities (Hot tub, Instagram Wall, Pickle Ball Court) that would place your listing far and above other similar listings.
I think you should strongly consider if you more interested in moving away and starting a life somewhere else, or in creating a cash flowing investment to supplement your income? We kept our house in Nebraska when we moved and were cash flowing over $600 per month. In comparison, we moved out of our first Colorado Springs home in November 23' and we are just barely breaking even as a LTR. Yes, there is potential for more equity growth here in the Springs compared to the Midwest. But, the fact is that our home has been declining in value since we purchased in May of 2022 because we bought during the "Covid Bump", and the market has been depressed for the past 2 years. The market very well could continue on this path until we see substantial changes in local wage growth or a decline in interest rates. So do not expect appreciation to be your savior, the facts remain that this market will bounce back and will appreciate more than the Midwest, but can you carry the debt for that long until it does?
So in conclusion, I would heavily weigh your desire to move from the area and your desire to turn a profit in an area that you already have some market knowledge of. Also, who is to say you can't find a steadily appreciating multifamily in your area to buy and then use that income to help you move out to the front range and begin your real estate education out here? Or maybe you can use some money to buy real estate locally and use the rest to buy your house hack in Colorado.
Lastly, if you do have your heart set on moving out to the area, the absolute best way to by ANY primary residence in ANY local market is to look for homes with an assumable FHA or VA loan! My wife and I bought our most recent primary residence in this manner and locked in a 3% rate on our loan in an (at that time) 8% interest rate market! I feel this is the ONLY way you can buy real estate that will rent for more than the mortgage payment once you move out in a year. I have a blog post you can read here (www.biggerpockets.com/forums/922/topics/1175338-maximizing-w...) that dives into the advantages of combining house hacking and assumable mortgages.
I wish you the best on your journey and would be happy to answer any questions you may have! Good luck Wyatt and take care :)
Brian Bohrer
