All Forum Posts by: Dalton Toelkes

@Matt Vohnoutka Thanks for the detailed reply, that’s very helpful to consider. We’re still working out if we’d self-manage or not and that was definitely part of the concern with the cash flow being thin. I’ll need to do some more digging on the tenant’s situation

I’ve got an opportunity to buy a rental house potentially for zero down, but I’m not sure if this is a good deal or not. The current owner has offered to put up the down payment and add that onto the total price of the house so they’ll be paid back and we aren’t putting anything down. It’s currently listed at $180,000 he’s offered to put $18,000 down for 10% and then add that to the purchase price, making it $198,000 total.

This house is in a great rental area right across the street from a major med school, he’s had no problems renting it out in the past. The area should appreciate over the next few years as well.

Some of my concerns are:

1) There’s a tenant currently in there that we’d either inherit or need to kick out. He mentioned they’ve had trouble paying on time lately.

2) This place rents for $1,500 now, could be as high as $1,650 fixed up more but the total mortgage payment with taxes and insurance would be about $1,500-1,600. So we’d be breaking even or negative until we could refinance.

This would be our first rental and I think it could be a good opportunity long-term, but it feels like there’s some red flags here. Is this something you would pursue, or move on?

@Account Closed That's a great problem to have! I'm currently looking for a house hack deal around Denver and I wouldn't be so quick to rule it out. Just like some others have said, it can lower your living expense that you'll have anyway and it gives you a chance to dip your toe into real estate without going all in right away.

If you're a first time home owner, you can qualify for a loan with 3% down on a SFH or 5% for multi family. I've talked to a few lenders here about this. For most deals I've looked at, you can get in that way for anywhere from $10-20K. From the numbers you gave that should give you plenty of room to work with and give you time to get more comfortable scaling up after that deal.

Good luck!

@Nick Gray I'm a 23 year old who recently graduated with a degree in Industrial Engineering and I know exactly what you mean. I think the toughest thing is knowing what you want to pursue and seeing the path there, but then having the patience for it to play out. I've been struggling with that myself. I think it may be best to stay with that job for a couple years and build RE on the side until it gives you more flexibility for a change.

@Scott Trench's book Set For Life talks about saving up and building a reserve of cash to give you the opportunity to take a lower paying job initially, but that gives you room to grow past your current income. This may be the best option for you to get out of your job now after a year or so and move into something like being an agent or another RE related job and build up the income over time.

Best of luck to you!

@Mike D'Arrigo Thanks for your input. A "gift" is more what I had in mind than an official loan here. I agree about reserves and feel uncertain stretching myself so thin. From the advice of you and others, I think I may be better off waiting to jump in and can find a similar deal when the time is right!

@Brandon Guite Thanks for the advice! I agree, I like to be conservative looking at the numbers just to be sure it keeps you covered. This area can make it pretty tough to do that so I may just need to look harder at it.

@Seth Wilcock Thank you! Those options from CHFA are really interesting, I haven't heard that from any lenders I've talked with here. Whether I pursue this deal or another one that's something I'll definitely look at.

@Chace Fraser Right now I have about $5,000 I could comfortably put towards the up-front costs your mentioning and then have steady income from my job right now. The house has a new roof, flooring, and heating and cooling so most big ticket items are covered. I agree though about having reserves for the unexpected which is why I'm hesitant on this and wanted to get some advice. I may just be rushing this process a little. It's definitely more exciting getting into a deal than saving up!

@Chris Lopez Thanks for the advice! Ideally that's what I'd like to do so maybe I need to reconsider the deal. I think that's sound advice to play it safe and be prepared for the unexpected.

Let me start by giving you some background. I just graduated and moved to the Denver, CO area about 3 months ago coming from the Kansas City area (currently living in Parker, CO). I've been getting started in real estate investing and learning as much as possible while looking for my first deal and saving up. 

I got a property sent to me from a local realtor/investor that I have the chance to house-hack for my first deal. It's a 5 bed/2 bath house in Centennial, CO for about $375,000. My plan would be to purchase it with a conventional loan using 3% down as a first-time home buyer (I've already talked to a lender and been approved for this loan) and rent out the other 4 rooms. After analyzing the deal on the calculators here, I found that I can be left with paying anywhere from 0-$200 per month for living expenses after doing this. For comparison, I'm currently paying $1,200 per month in my apartment. Obviously this savings on living would be great, especially in Colorado.

My concern is that I don't yet have quite the full down payment for this even at 3%. I can do about half and have considered looking for a loan from the bank of mom or friends to get the other half I'll need including closing costs and all. In addition, I've considered moving back to Kansas City in a year or two for cheaper real estate opportunities and being closer to family. I would most likely sell the house if I did move and would be fine breaking even appreciation wise to make the extra savings until then, although the market here has appreciated pretty steadily. 

I'm not sure if this is worth it to go through asking for this, moving into a new place, finding and managing roommates, and then potentially selling in a year or two in order to save on my expenses while I'm here, or if I should just wait. I may be getting too excited looking for my first deal and getting in the game so I thought I'd see what the BP community has to say! I would appreciate any advice you have!

You can see the numbers I used to calculate the deal below. (keep in mind cash flow is negative but is a savings from my current living expenses)

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Hey everybody!

I'm getting started and could use some advice from the BP community. I'm new to real estate and I've met with a few agents in my area and a couple lenders so far, but I know I'll need another 6 months or so to save up money and get my credit up before I start seriously looking at properties here. My question is how I can keep contact with these people in the mean time to keep that relationship, or if I would be fine just getting back in touch with them at that time when I'll be actively looking?

Any advice is appreciated, thanks in advance!

@Anton Ivanov Congrats on your success, that's very inspiring! I'm starting out in real estate and just moved from the Kansas City area to Denver so I'm looking at investing back there from out of state. I'm just curious if you have any recommendations on who to use for property managers, agents, or contractors there. Would love any advice you have on that area.

Welcome Adrian, congrats on getting started! I'm in the same boat as you, just graduated, new to real estate, and looking to invest out of state (currently living in Denver, CO). Best of luck man!