All Forum Posts by: Chris Freeburg

@Richard Biddle Welcome to BP! Lots of great networking and overflowing with a wealth of information.

Colorado doesn't shows any signs of slowing down. The Front Range population is expected to double by 2050. There are deals out there, just depends on your goals and the best strategy play to make. House hacking, live-in STR, NOMADing (move from one SFH to the next via owner-occupied financing) are all good cash flow plays in an expensive market like Denver. And while Colorado might be a little harder to cash flow at first, but you'll ride the appreciation wave.

Hey CJ! Congrats on the first property and good idea to keep moving on the second. There aren't many Tri's & Quads and they move fast!

Focusing on any particular areas? What are your long term goals?

I'll send you a PM to connect to see if I can help.

@Steven Tawresey 

Answer I like to publicize: I read. "Self-Improvement" books (Ryan Holliday, James Clear, David Epstein, etc.)

More truthful answer: Spend too much time reading posts on BP, posting answers, etc.

Maybe it's time for a passion project that can sit for extended periods of time. Now, there's a question I'd like to hear from BP: What is your non-investment passion project?

@Christian Albright Nice! With your background, I would seriously consider what work you're willing to do: new floors? egress windows? full kitchen? That specificity (instead of just value-add or willing to do some work) will help with budgeting time and cash, and estimating ARV. Also, check out rentomer for rent estimates. I think you get 5 searches for free, so you may want to wait until you're ready to make an offer unless you're willing to pay a little extra.

@Candice De 

I think @Matt M. has a good point. If they have been working hard to qualify, 350K is their true max (what the bank says they can afford), and the market is this hot, their goal may not be realistic. I always tell clients they cannot get everything they want, but to choose 3 make-or-break criteria. If it's >$350K, 3 BR, and near U-Hills, a SFR may not be in the cards.

I wonder if advising them to consider a condo or townhouse may actually be good advice for them? It gets them in the market for both appreciation and to build equity. A big cause of the last housing crisis was homeowners would could not pay their mortgage (along with lenders, etc who took advantage of them and sold them a bill of goods), so I don't think it's wise to reach beyond their budget and bank on an appreciation play. It's both wishful thinking and even if fulfilled, the potential home value has to be sold to be realized.

Now, that being said, I don't know when you started to look in the summer, but middle of winter is historically the bottom of inventory. The pandemic buying rush has us 50% below last year's low winter inventory. My guess is that things will start to pick up and homes will likely come on the market, as we move into the listing season, out of the pandemic and beyond the election. I may be wrong. More than anything, don't stop looking. (I mean they started looking in the middle of a pandemic!) Be patient, and see what comes this spring. It's time in the market that matters (part of the point I was trying to make above). Leaving the market is probably the worst thing they could do.

@Thayer McKeith

Before even looking for a PM company that will manage while you live in the property, do you really want that? They will charge at least 10% (1-2 months rent). And, I think you’ll find it’s not much work while you’re living in the property.

Down the road, when you have 3+ properties, it might make more sense and the numbers may work out too.

I can tell from your post, you’re playing the long game, which is what this is all about. First things first, so for now focus on your first deal. I’d identify the criteria for your first house hack (storage, parking, BR/BA, etc), get to know the market in your target area (avg price for your target property/days on market, etc), calculate a budget for down payment, closing costs, maintenance, emergency repairs, etc. Once you know all that, then decide if you want to (and can afford to) pay someone else to manage or want to hang onto that $$ yourself.

@Kevin Noonan I know you said moving from your home wasn't an option. I just want to dig in a little before you move on from this. Have you heard of NOMADing? You buy a new investment property with an owner-occupied loan, and rent out your former property. It's not house hacking, but still takes advantage of the little money down and good interest rates for primary homes (as opposed to the 20% down for investment properties). Investors using this model move from home to home (hence the "nomad" term). It's a lot of work, but any investment will take work (from sweat equity to analyzing deals), it's just figuring out the type of work that aligns with your life, goals, and even personality. I'm sure it's a lot of change and work to move a family and 2 young kids, but want to make sure you're exploring all the options, not just the traditional house hack I think you referenced as the live-in method.

@Christian Albright That target area makes a lot of sense to me. I think it's important to consider where you want to live. It is also likely where other people want to live and so it creates a strong tenant pool. There's a lot of upside in those neighborhoods but still a price point that will let you get in the market.

It's important to have a clear target. I work with my clients to help them identify their top 3 non-negotiables. You're not going to get everything you want, so identify 3 make-or-break criteria. It will help you: 1) save time house hunting 2) better understand a good deal 3) act with confidence to make an offer when a property checks those 3 boxes

Some questions to get you going:

1) Do you plan to rent by the room or have separate/semi-private spaces?

2) Do you need storage (bikes, skis, climbing gear, construction equipment, other toys, etc).

3) What type of parking is there? (if no off-street parking, is there enough street parking?)

4) You mention your construction background and willingness to do some improvements. Do you want fully unfinished basement?

Once, you have your top 3, start to educate yourself on the market in this area. Even if you're not in a position to buy yet, follow the market to see what your target homes go for and how long until they are under contract. Not all realtors will go through this type of goal setting process with you, but there are some good ones who will. I think it's especially important for investors and house hackers because a typical agent does not always understand what you're trying to do. They're used to just buying SFHs for a single family. Regardless, take the time to do it for yourself.

If you haven't seen this already, you will quickly learn how fast the Denver market moves. For this reason, I cannot overestimate the importance of moving with confidence in placing an offer. There are some other things you can do at that point, but aren't worth going into detail here as your agent will write the offer and should know those tools.

There is normally no seasonal inventory in December/January anyways and with this COVID demand we're 50% below normal, so I'm not surprised by those numbers at all. More homes will be coming on the market as the weather warms up. No inventory is not a good reason to give up looking.

@Christian Albright I agree with the advice to keep looking and really get to know the market so you know the true value of a property. That will make you way more confident when it comes time to make an offer. Because Denver is so competitive, it's easy for buyers to get stage fright when it comes time to sign for the biggest purchase of your life. Even though that's normal, it leads to offers that just don't stand up against the competition. Sometimes it's better to over pay $10k (which is the same cost of ordering pizza once a month) when the property will be worth that the next month. Some buyers learn that the hard way when they get beat out a few times, but if you have time to consider that ahead of time, use it to your advantage!