All Forum Posts by: Joel Heck

Like Matt said, get started today. It may seem daunting, but with each step you take it gets easier. There are lots of great books and podcasts out there, so read and listen to as many of them as you can to learn about the different ways to invest in real estate and the steps involved. Understand if you really want to do single family buy and hold or if there's some other strategy that will better match your goals. I was going along the house-hack/Nomad strategy with single family houses in north Denver for a couple years until I realized I wanted to go faster and decided to invest in multifamily properties. 

Since you're looking at Denver, I'd suggest the Denver Real Estate Investing Podcast by @Chris Lopez. There's lots of great information about different real estate strategies, local market updates, and interviews with local investors.

My girlfriend house-hacked a 3/2 condo (about 1500 sqft) in Broomfield for a couple years with no real issues. She assigned each resident a shelf or two in the fridge, freezer, and pantry, and some space in the kitchen cabinets. 

For messy tenants, you can add provisions to the lease that they are jointly responsible for cleaning up the shared areas. In my leases, I have a rule that dirty dishes can't remain in the kitchen sink or on the counters for more than 24 hours, and it worked well. I've also heard that some people walk with a prospect to the prospect's car to peek inside while finishing the conversation. If the car is messy, their residence is probably also messy.

I did have a guest policy. I think it was that they could have someone stay the night no more than 5 nights in a month. DM me and I can send you a copy of the lease I used for house hacking if you'd like an example.

I don't know about rent-to-price maps, but James Orr has a lot of stats on the Denver and Colorado Springs markets on his website.

I have rented by the room in two properties without issue. I make sure to run a background and credit check on applicants and use a 6 month lease that becomes month-to-month. 

I forgot to mention that Chris also has a podcast called the Denver Real Estate Investing Podcast. Episodes 25, 26, and 78 feature house hacks, and he has a 9-episode series on in-law suites/accessory dwelling units.

Welcome to Denver! There aren't many duplexes in general in the Denver area and the available ones are expensive. Many people have house-hacked single family homes here, including me. I'd suggest reaching out to @Chris Lopez. He's a realtor and investor in Denver who specializes in helping people find properties to house hack.

A: Question #5

B: As a few other people have mentioned, how did you build up your team to acquire and then manage your properties?

I'm looking forward to the videos and the book! Thanks

Investment Info:

Single-family residence buy & hold investment in Westminster.

Purchase price: $349,000
Cash invested: $64,000

This is a house-hack turned single-family rental. The goal was to lower my living expenses while I lived there, and break even on cash flow when I moved out to build up long-term wealth. While living there, I averaged about $800 in expenses with the roommates covering the rest, which is about half of what I was paying in rent before purchasing. Now it has a small positive cash flow, which will increase to about $100 once I get PMI removed.

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

House hacking is a good way to get started with real estate investing, and learn with lower risk. It allows me to increase my savings rate to buy other properties, and to get a lower owner-occupied mortgage rate and downpayment.

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

I found it on the MLS. I only negotiated that the sellers fix a few small things, like a broken sump pump.

How did you finance this deal?

Conventional 30-year loan with a 10% downpayment

How did you add value to the deal?

I finished the basement, turning the property from a 2 bed/2.5 bath to a 3 bed/3.5 bath and adding 50% more finished space. I also built a ground-level deck in the enclosed courtyard, which made the space much more usable and covered up a concrete swale.

What was the outcome?

I had three roommates over about 1.5 years, bringing in between $750 and $1495 total per month. I had about 3 months of vacancy between the first roommate and the second two because I found it hard to find applicants between October and January. I found a tenant within 3 weeks of moving out, and so far they have been great.

Lessons learned? Challenges?

The biggest lesson is to get the turn over period into spring or early summer when most people are looking to move. I don't think you need all of your documents and forms ready to go on day 1 for a house hack, though it helps. You just need a process ready for the next step so that you're not scrambling at the last minute. Over time, you'll figure out what systems you need.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I got my mortgage with Elevations Credit Union in the Denver area. They were easy to work with, and I used them again on my second property.

Investment Info:

Single-family residence buy & hold investment in Westminster.

Purchase price: $349,000
Cash invested: $64,000

This is a house-hack turned single-family rental. The goal was to lower my living expenses while I lived there, and break even on cash flow when I moved out to build up long-term wealth. I finished the basement to be able to add a second roommate and make it a better long-term rental as a 3 bed/3 bath. While living there, I averaged about $800 in expenses with the roommates covering the rest, which is about half of what I was paying to rent. Now it has a small positive cash flow, which will increase to about $100 once I get PMI removed.

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

House hacking is a good way to get started with real estate investing, and learn with lower risk. It allows me to increase my savings rate to buy other properties, and to get a lower owner-occupied mortgage rate and downpayment.

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

I found it on the MLS. I only negotiated that the sellers fix a few small things, like a broken sump pump.

How did you finance this deal?

Conventional 30-year loan with a 10% downpayment

How did you add value to the deal?

I finished the basement, turning the property from a 2 bed/2.5 bath to a 3 bed/3.5 bath and adding 50% more finished space. I also built a ground-level deck in the enclosed courtyard, which made the space much more usable and covered up a concrete swale.

What was the outcome?

I had three roommates over about 1.5 years, bringing in between $750 and $1495 total per month. I had about 3 months of vacancy between the first roommate and the second two because I found it hard to find applicants between October and January. I found a tenant within 3 weeks of moving out, and so far they have been great.

Lessons learned? Challenges?

The biggest lesson is to get the turn over period into spring or early summer when most people are looking to move. I don't think you need all of your documents and forms ready to go on day 1 for a house hack, though it helps. You just need a process ready for the next step so that you're not scrambling at the last minute. Over time, you'll figure out what systems you need.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I got my mortgage with Elevations Credit Union in the Denver area. They were easy to work with, and I used them again on my second property.

Thank you all for the responses. I was able to lower the fee, and my realtor agreed that the rental fee was for finding a tenant, which doesn't apply in this case. 

Hello,

I'm looking to purchase a duplex in Michigan I found that is currently rented. Looking over my realtor's broker agreement, I noticed that in addition to a typical 3.5% commission fee, there's a "rental fee" for which I would have to pay him one month's rent since it's an investment property. I haven't seen a fee like this anywhere in the forums or blogs. Is this typical? 

Thanks