All Forum Posts by: David Williams

Trust is key in working with anyone and of course this is no exception with contractors. A strategy that has been a win for me and a win for the contractor is to have the contractor go and pick up material then I pay by phone once the contractor is at the contractor's check out. This allows me to receive email or paper receipts, allows the contractor to not cover materials upfront prior to getting paid for the job and I didn't have to make the run to pick up materials. If you can't trust them more than that, then probably best to look for another contractor. 

Hi Katelin! That's awesome you're ready to take your next step in real estate investing! You're absolutely on the right track by landlording/househacking your current home!  In Denver the 1% rule is hard, in fact extremely hard or impossible to reach. But don't let that deter you as investing in this market can be fruitful.

I think when getting ready to invest further its important to have know what your long term goals are. What does your ideal life look like and what role would real estate play in that? Do you need to cashflow quickly to get out of a W2 job, are you looking for long term equity to supplement retirement? Are you looking to grow a large portfolio or just a few properties.  Knowing where you want to end up will help guide your next step in the investing journey and keep you on track toward those long term goals! 

If looking to cashflow as much as possible and grow long term equity it is hard to beat househacking as a strategy. This is where you would buy a property as primary residence for as little as 3.5-5% down and then implement the same strategy you are using in your current home by renting out the rooms, basement or ADU (the more creative you can be and more discomfort you can live with the more cashflow you can achieve). This then allows your current home to be a full time rental, where you can maximize tax benefits and on the new property you are at least making a significant dent in your mortgage from the rent of the new tenants! This also keeps your out of pocket costs lowest with the ability to get a conventional loan for less than 20% down.

Other ways in this expensive market to improve cashflow would be to buy and run a short term rental/Airbnb. Short term rentals are now legal in Arvada, Littleton and soon to be Wheat Ridge. Of course this comes with some extra work to manage or cost to have a property manager for a short term rental.  

If playing a longer term equity game and less focused on initial cashflow I like to find houses in which the rent can pay the mortgage and also cover savings for vacancy, repairs and future improvements (these costs depend on the property and often range from saving between 5-10% toward each category). If you can find a property that does that and is in area you believe will only appreciate..ie NW Denver metro (Arvada/Westminister/Wheat Ridge), then to me the property makes sense. The property will grow with appreciation and the rents will also follow. 

Other than that, it is crazy times out there as a buyer, there is no denying that! But if you have a good agent who can help make strong offers, know (and stick to) your numbers, and use patience you will find that property and you will be well on your way!

I too invest in Arvada and have seen great results. Shoot me a messag if you would like to talk more I'd be happy to help in any way!

Sounds like a great plan! I would start with the book Long-Distance Real Estate Investing by David Greene to learn the team and systems to put in place to have long distance investing, then dial in on the additional members of a team you would need to to run a STR.

Totally dependent on your risk tolerance, desire to leverage and scale quickly and other reserves that could be used on property. Traditionally you want to set aside a % of rental income for vacancy (usually between 5-8%), this is variable based on your area, your property and also the time of year you are renting. For me in Denver finding tenants in winter is more challenging and thus more vacancy cost. Then you want to set aside a % for potential repairs (usually between 5-8%), your property is newer, so maybe you do less here. Lastly you want to set aside % for cap-x or property improvements (traditionally 5-8%) again your property is newer so maybe little to no money here. Then depending on the cash flow of the property, each month this money can be saved, because no matter what something will happen and I promise it feels much easier paying this money out of your property's account and not out of your personal account. Then grow this savings to an amount you feel comfortable with, often people recommend 6 months worth of PITI. After that, grow, grow, grow!

Again this will be a very personal decision for you and something lots of people have their own 2 cents on, so take it all in stride and do what is best for you in your situation. 

Hi Lakshman! Excited for you to take your first steps into real estate investing. My first advice is to find you a real estate agent that focuses on helping investors, that may help you in your search to get what you are looking for faster. You can find awesome agents here on BP that are investor focused! 

In a hot market it can be very difficult/impossible to meet the 2% rule. I recommend thinking through what your longer term investment goal is. If it is to cashflow quickly to make more income, then you may need to look at other markets that allow for better cashflow. If it is to buy hold, build equity and play a longer game, then buying in a hot area is going to provide you with that long term appreciation and rents will also improve. If you are trying to stay local and entry into the market is difficult then strategies like househacking can be a fantastic way to get in with low money down, offset or completely pay for your mortgage and then allow you to quickly save for the next property! You got this! Good luck!

@Alecia Williams

I used to be a travel physical therapist and look for this housing all the time. There was a great need for housing when I was traveling! Once you have a property near a medical campus that you know uses travel nurses or therapists (usually can find this out if you know anybody who works at the hospital). Then reach out to the medical staffing companies. One quick google search will get you plenty to contact. They are the ones who coordinate all the jobs, moves, housing etc. good luck!

Awesome! Sounds like you're in a great position. I say go for it! You're motivated and the sooner you take action the better! Househacking has the smallest barrier to entry to real estate investing and If your long term goal is to have multiple rentals then the sooner you start the better! Of course make sure you have an excellent agent that can best help you on your hunt for a place, and you can find one wherever you end up living here on BP and they will specialize in helping you  grow your investments!

Hi Louis! I think it probably depends on what your goals are for the property. If looking to flip then get I'd find an excellent agent, lots you can find here on BP and have them give you the CMA for with dry wall and without and see if the cost justifies it. If looking to rent then I always ask, will this make me more dollars/month? If not then not a necessary upgrade to get it going as a rental.

One other thing to consider if holding as a rental; does the house need the added sheet rock and insulation? I'm from Arizona myself and I know how some areas of the state need all the insulation they can get to keep the home efficient in the summer. Hope that helps!

Ditto @Jeff White said. Great advice man!

I think a way to make a house hack a deal in a hot market is to look for things that others don't see. Lots of people are looking for a duplex and its hard to find. Maybe you find something with a large square footage that you could add a bedroom or bathroom and increase rental rate, or a basement with a potential separate entrance that can be its own unit. Depending on your personal situation you will need to determine if you'd like 2 units or a rent by the room situation. Renting by the room is a way to maximize income, but of course comes at the cost of comfort, totally an individual decision. Good luck!