All Forum Posts by: Ian Jimeno

Hi @Bryce Renicker, glad you're moving so quickly! Financing is a good problem to have (vs. analysis paralysis...)

I would look into partnering. I have a couple other properties, so my cash was tied up in them. "I'm not poor, I'm just broke!"

I thought: I can provide the hustle, the analysis, the purchase, and ultimately the management of the property, and my partners could bring the cash to close, furnish, and upkeep the property.

We closed on the property on May 3rd, 2022, and operate it as a short term rental/house hack. My 2 partners provided $25,000 each, which provided the down payment, closing costs, and basic furnishing to the property. My wife and I brought in $4,000, just to put skin in the game and for reserves. 

My wife and a partner signed on the loan, so the DTI was not a significant opposition. The partners will get a guaranteed 10% cash on cash return per year, and get a portion of equity on reversion (sale or refinance of the property). We get a property, partners get preferred return, we all get equity. Win win situation!

We ended up putting down 5% down because it's an owner-occupied loan and strategy. Case in point: You don't have to be the only one in the deal. Leverage your partnerships, and if you have to put down 15% down, find a good enough deal where your partner will benefit from it!

Hit me up if you have any more questions. I'm based in the Denver, CO area. Best of luck!

Awesome job @Ryan Williams! I'm also house hacking in Denver, specifically Sherrelwood/Westminster. 

I recently received a request to get a 2 month "lease" done through AirBnB from Jan to March. I have a discount set up of 15% for the 60-ish days, and based on Beyond Pricing, those days are in low demand. 

What's your take on this? Would you take on this guest? Thanks!

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $615,000
Cash invested: $15,000

House hack + Short term rental = profit! My wife and I utilized private money loans to acquire this deal, and are looking to break even on the investment while we're living in it. Based on our projections, year 2, when we move out, we will be cash flowing approximately $980/mo, split 3 ways (myself and the two private money lenders).

What made you interested in investing in this type of deal?

It's the most lucrative way to house hack and generate income at the same time with the exception of living in the living room while the bedrooms are rented out (looking at you, Craig Curelop haha)

How did you find this deal and how did you negotiate it?

We found it on the MLS. We were approximately 65k over asking price (Denver is a hot market!).

How did you finance this deal?

We used the commission of the deal towards the down payment and closing costs (I'm a realtor) as well as private money loans to finance the down payment. 5% Conventional loan.

How did you add value to the deal?

We will be operating the main unit and basement as separate units for AirBnB. The basement will have a separate unit, which will allow us to operate two units in one single family home!

What was the outcome?

Still exploring the income generation capabilities of this property

Lessons learned? Challenges?

Let the transaction coordinator, lender, and selling party that you'll be using the commission for the down payment funds.

It's the deep questions for me!

Having two gentlemen like Craig and David who run teams of agents really brought up our guest on a pedestal. Great answers to great questions, can't wait to hear what it'll sound like with Craig's voice at 100% :)

@Ben Einspahr Thanks for your input! Seems like you had to go through the same situation that I was recommended as well. Maybe in my case, with 3 parties total, 4 LLCs will have to be formed (+1 for the property itself).

Thanks for the BoA Grant Program as well. I'll have to look into it. Looks like we meet most of that criteria, however, it looks like the area we're investing in is considered "Middle" (assuming it's different than "Moderate"). 

If you know of a RE Attorney that may have some good input, let me know! I'd love to get a second/third opinion on my situation.

Hi BP'ers,

My wife and I are looking for our next house hack in Denver, with which we are very familiar. As we continue our investing, our capital is tied up in several assets, so we are working with capital partners (family) to assist with the DP and closing costs on the deal. My wife and I will be finding, analyzing, and managing the deal instead of providing capital.

We're looking to operating the single family home as a short term rental by finding a residence that we can separate as two units (i.e. mainfloor and basement, mother in law suite). After running some numbers, we're able to distribute 10% CoC for their ~$25,000 capital investment per couple ($50,000 total). This only works if we can secure an owner occupied loan, 5% Conventional, at around 3.75% (conservatively speaking, yes?) interest.

We want to set up a proper partnership among us three couples - operating agreement, structure of the business, etc. We want to eliminate all emotion in the deal and still come home to each other's company knowing no emotion is involved with the decisions. 

After talking with a real estate attorney here in Denver, she was recommending we set up one Wyoming LLC for each party (one party = one couple) and have a partnership agreement tying in all three LLCs developed. I did not confirm why we should choose Wyoming other than no state income tax on LLCs, sales tax is low, and WY has very minimal reporting obligations and limited LLC fees.

My question to y'all: How do we develop a solid partnership agreement for our three parties? Do you think it's right to have separate LLCs each and then set up an agreement, or do you think there should be one LLC for all three parties, or something else? And should it be out of state (not in CO)?

All of the partners and myself have been going over the Joint Venture Basics - How To Structure the Agreement PDF, which has been tremendous help to answer difficult questions or questions we haven't thought about yet. What say you, RE Attorneys??

Thank you kindly!

Ian

House Hack! I find it to be the only way to potentially cash flow day one. Of course, this may be extreme for some people, as house hacking and trying to cash flow means you'd have to live in the living room to rent each room out. 

If that's out of the question, and you're only looking to buy an investment property, I'd suggest finding a way to buy an SFR and separate it out to two units internally. Hope this helps!

Hi @Joshua Hughes,

First of all, congratulations! You're already ahead of the curve of those who don't commit.

There are several places you can look: Zillow Rental Management (I've had solid leads here), Facebook Marketplace (another good one), and Craigslist (you can get weird people). 

No matter where you look and no matter how the potential renters act when they meet you, SCREEN THEM! Credit history, employment history, criminal background, etc. Also, look to see if they are on time to your meetings with you, check how they maintain their car, how they hold themselves, and see what their day-to-day schedule is like. You don't want someone working graveyard shifts if you're working during the day, or maybe you do because you can be quiet around them! I would suggest getting a book like The House Hacking Strategy by Craig Curelop (I'm an agent with The FI Team headed by Craig here in Denver) to help you with that process.

As far as managing your own rental, I go through Apartments.com. It's free, simple, and you can write state-specific leases through it, although BP has some solid places you can get leases as well. You can set up rent, lease terms (annual? month to month?), and even have operational items such as maintenance requests processed through it. Renters can go through Apartments.com as well to pay rent to you. I can't speak on any other platforms just because I haven't used them, but there are several out there! Do your research, of course.

Let me know how it goes! YouTube is a great place to get started as well. Hope this helps.

Ian

I'm with @Jorge Rivera on this one: Time IN the market always beats Timing the market.

Even if the housing market comes to a slow-down/crash, you're looking at interest rates going up. In the grand scheme of things, the interest rates are still VERY low, but a 1% difference can be hundreds of dollars of difference.  Get a property that suits your goals, live in rehab it, and force appreciation. That equity you build is tax free when you cash out refi it! 

For house hacking specifically, SCREEN WELL! 90%+ of your problems will be prevented with tenants if you screen your tenants well. Meet them in person, note how quick they respond, note their manners and how their car looks, etc. All in all, you're going to be living with this person(s). Hope this helps! Hit me up if you have more questions.

Ian

 I used a CO CPA, so I'm not sure if he works nationally. Check out Steve Fradin of Muirfield Accounting