@Account Closed...
> I was unaware of the "nomad" method until this thread, but apparently that's what my wife and I are doing!
That's awesome!
> We bought a SFH in 2017 in Colorado Springs (5% down), rented our spare bed on AirBnb in the summer and had a friend live with us in the winter.
Yes, combining Nomad with House Hacking is a power combination.
> Great way to supplement our income and increase our ability to save!
Yes, it is.
> We just closed on our second property (also 5% down) near downtown COS.
Awesome! Congratulations!
> It has a walkout basement that we have turned into a guest suite.
Love it. House hack away!
> We are renting that on AirBnb as well!
Yes.
> I would definitely recommend House Hacking to get started.
Yes, there are some folks that are willing to house hack; many that are not. It is personal preference and prioritization.
> It is the best way (in my opinion) to lower your cost of living to save up faster for the next deal.
House hacking or side hustle both work. I have clients doing both. If you rent out a bedroom for $500 per month, it is like getting a $500 side hustle. Some people are not willing to house hack, but are totally willing to put together a side hustle like an fulfillment by Amazon business or whatever they're interested in.
> While CO overall is a competitive market, there are still some great growing areas.
Yes.
> I lived in FoCo for 5 years and loved it!
This is a great city.
> I don't know enough about that market to speak to the ROI at all.
We've seen ridiculously strong overall ROI the last decade or so.
> I do belive that Cos is still undervalued compared to the rest of the front range.
Maybe. Historically, I think the challenge with Colorado Springs has been the relative shortage of jobs. Have not looked at the numbers recently though so maybe that's been resolved.
> Overall it is tough to find a property that you could buy with 20% down and cash flow right away.
Yes, we have the same challenge here in Northern Colorado.
> Which is why I recommend house hacking to get started.
House hacking can definitely help improve cash flow.
> It is a great, low-risk way to get your investing started.
So, I primarily measure risk in two ways: debt to net worth and resiliency (like rent resiliency). Debt to net worth allows you to see how much debt you are carrying divided by your net worth. For most people doing Nomad with a small down payment (like 5% down payment) with little other assets is not really low risk in my definition. It is one of the higher risk ways of getting involved in investing, but it does front load your risk profile since you're able to acquire the properties sooner which gives you a lower risk than even 20% down later on (if you have to wait). So, you trade much higher up front risk for lower risk later.
As for resiliency, you're right that getting more income on your property from house hacking (and getting owner occupant interest rates by Nomading) can help reduce your risk in this measurement.
Hope that helps.
