All Forum Posts by: Daniel Kenney

Agree with previous posters that your approach is solid.  Do some research on "house hacking" on the BP forums and blogs... there is a ton of great information out there.  Do some networking on BP and at your local real estate investment groups to find an investor-friendly real estate agent, and when I say "investor friendly," they should have experience investing in their own properties in your area.  Many will claim to be investor friendly and honestly have no idea how to evaluate a good opportunity.  Good luck!

Hey @Brandon Trafford. Congrats on taking action! However, before jumping into a deal, I strongly recommend you take some time to educate yourself on apartment deal analysis and due diligence (plenty of decent books out there to give you a decent foundation - The Ultimate Guide to Buying and Selling Apartments by Berges is one of the better ones IMO). The world of commercial apartment investing is a bit more complex than SFH or small multi-family investing, and there's typically more capital at stake. Before spending any significant time on physical due diligence, does the deal make sense from a financial standpoint? Have your reviewed historical financials, rent roll, etc.? Do you know what sort of financing you will likely be able to get and how that will impact the deal? Do you have or will you be able to source sufficient equity? There are more bad multifamily deals out there than good ones, which is why it makes sense to evaluate deals financially first. Only if it passes your financial criteria should you move into more in-depth analysis. You could also look into finding someone in your area who is more experienced and can help you evaluate whether it is a deal worth exploring. Hope that helps!

@Brandon Trafford

@Andrew Syrios I agree entirely although let's be honest, we are in uncharted territory with interest rates being so low for so long, and no one knows for sure what the reaction will be to a rate hike.  I think Denver is better or as well-positioned as any other U.S. market at this point to digest a small rate increase and start slowing things down.  I would accept a slow down or slight correction with open arms at this point :).

@Bill S. I don't disagree with anything you said.  I posted the article not because I agree with it, but more so because it's not particularly common to find an article exclusively about Denver in the NYT.  They actually do mention the impact of a rate hike on a monthly mortgage payment (~$178 per month for a 1% hike on a $300K mortgage).  Not sure how you calculate your $100 increase per month for every 1% increase on $100K - it's actually much less onerous with today's rates... more like $60 per month for every 1% increase.  

Interesting article in NY Times business section on the state of the Denver economy and real estate market...

http://www.nytimes.com/2015/12/14/business/economy...

@Chris Knutson Congratulations on making the leap!  That's the hardest part for most.

Just curious, where did you find cash flowing SFHs in Denver (assuming you used financing and didn't buy cash)?

Good luck with your endeavors!

@John Blythe If you're looking for risk aversion, I would consider house hacking a 2-4 unit (i.e. you live in one of the units and rent out the remaining units).  There is a TON of info on this strategy on BP if you search it.  The advantages are significant, including lower down payment, minimized personal living expenses (rental income offsetting a significant portion or even all of your mortgage), property management experience, opportunity to keep great financing in place when you leave, etc.  Otherwise, I still agree with the small multifamily approach but please, please stay away from cheap properties in bad neighborhoods that seem like cash flow machines.  For your first investment, I think you are better off with something more boring but less of a headache... think B neighborhood with decent cash flow and maybe better opportunity for appreciation.  I don't know your market but hopefully that's helpful....  

Also, check out the BP podcast. If you listen to all the episodes in your free time or while driving, you will have built a great foundation of REI knowledge.

Definitely A, although my guess is it's much less than 5%.

Welcome to BP Jackson!  No stable proof of income will certainly make thing more challenging from a leverage standpoint.  I would start networking and discussing your goals with local lenders and investors...  Also, check out the BP podcast... lot's of good content related to all facets of real estate.

Congratulations Mark! Looks like you are taking care of business up there in Greeley.  Hope the flip works out for you and that you can achieve your 2016 goals...

Note - I'm not an insurance expert.  You should let your insurance company know it will be used as a rental as there is additional coverage that can be a part of a rental property such as lost rent reimbursement.  Also, getting into the world of land lording brings you into a whole new world in terms of potential liability.  There are many previous discussions from the forums and blog articles written about umbrella policies, LLCs, asset protection, etc.  Podcast 109 has some great stuff on asset protection and if you are serious about this land lording thing you should definitely speak to a lawyer.

Hope that helps and good luck!