All Forum Posts by: Matthew Cook

@Mart Brosas yeah we were very happy to find this opportunity. The home is in the Denver metro suburbs. Most homes here are like a giant box, not like a row home. So the stairs to the top floor are exposed in the middle of the home. However, if we moved out we could rent our portion of the home for probably $2500-2800. That plus the basement rental, makes the property cash flow between $800-1100. Plus it's in a very affluent neighborhood with luxury HOA amenities and a award winning school across the street. The property is projected to appreciate well. It's a great investment for us!

@Jaime Mejia Sure! We were always nervous that after we bought the home, the dig out wouldn't work or be too expensive, and then we wouldn't have a back up plan because the home was already bought. Since we purchased a home at the top of our price range, our strategy had to work and we had to get the basement rented out for top dollar within the first 4-6 months of moving in. I think the dig out was too unpredictable at the time. Most contractors weren't willing to come look at a home I didn't own and give me a quote.Maybe it's just a Colorado thing since our market is so crazy and busy. The other problem we encountered was we were looking at limited inventory to buy in February. There were so few options that allowed us to live on the top two floors, and rent out the basement with out sacrificing the quality of home and life we wanted to live. I think finding a property without needing to live in it, would be easier on the timeline and maybe my next investment strategy.

Investment Info:

Single-family residence other investment in Erie.

Purchase price: $599,999
Cash invested: $75,000

Purchased a 4200 sqft home with full walk-out and separate entrance. My family live on the top two floors, and we rent out the 1400 sqft basement. We purchased the home, and had to turn the entertainment space in the basement into a kitchen, added a laundry closet with W/D, and finished the second room. Right now it rents for $1700 + $100 utilities.

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

My wife was ready for our next home, we had a good amount of equity from our first live-in flip, and I wanted to try househacking.

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

This was a home our RE agent had us look at. Surprisingly, we weren't interested in new builds, but this one had all our list items for a house-hack and basement rental apartment.

How did you finance this deal?

Loan, and cash from previous sale

How did you add value to the deal?

We had to add backyard landscaping, and created a basement apartment. We added a kitchen/dining space, finished the 2nd bedroom, and added a laundry closet with W/D.

What was the outcome?

We currently cut our mortgage in half, and we live in 2/3 of the house.

Lessons learned? Challenges?

Make sure to have a contract with your contractor that has extra money tied to a finishing date, and loss of money every day or week past date.

@Jaime Mejia We ended up purchasing a property in Colliers Hill, Eire, that had a full walkout and was mostly finished. We only had to turn the basement entertainment area into a kitchen/dining space, add a laundry closet with W/D, and finish the 2nd bedroom. The problem I found was that the quotes were all over the place with know one really knowing. We only had so much cash for the project, and often we were faced with maybe $20k just for the door and dig out. It didn't financially make sense. Also, many HOA communities wouldn't allow it, or it was hard to find basements that had large enough side yards for the door and digout. With it being our first big project like this, and all out equity on the line from my last live-in-flip, we went a bit more conservatively, and we were lucky to have our current home pop up when it was time to buy. It fit all our list items and more for our price range.

Hey Tyler, I'm looking to do the same thing. Did you have any progress on this? 

@Matt M. You know, that’s more my thinking as well, something turn key. I’ve found some with walkouts, finished basements, and even some with mother-in-law kitchens ready to go for my budget. That would allow me to allocate all my profits of equity into other investments instead of further remodeling costs. So no issues with Thornton? I’m looking out around between 120th and 144th area.

@Matt M. @Chris Lopez What do you guys think about Thornton for house hacking? Close to light rail which is good for renters. You can get more house out there and the options are more plentiful with walkouts and already finished basements?

@Loni Anderson I am a 3D Artist on many of these kind of shows, and the show definitely does NOT have any money to pay for any renos. To even get casted, the owner has to have guaranteed funds and remodel costs within a certain budget designated by the show creators. The only thing that you could consider "donated" is the advice and time of the hosts. Or if the show specifically says they "donated 6 months of free marketing," that was given by the marketing company because they received exposure from the show. But time, advice, and design or contracting work is still a huge win for the owner. Like on Fixer Upper, They were receiving free design advice/design plans from Joanna. And the owners were getting either free or steeply discounted work from Chip and his crew. BUT, the kickback of that is then the budgets and end cost represented are not realistic in a real-world house-flip or remodel because in the real world we all pay for design, plans, contracting, demo, install...etc.   

@Chris Lopez Yeah Chris, I've got a 1.5 and 5.5 year old. Child care is an absolute killer! Hear you loud and clear on the separate entrance. The last thing we want is to have some crazy spiraling costs with just the entrance problem. So far, I've only been able to find the HOA documents for vista ridge in Erie, and they do allow for rentals. A few stipulations, but nothing difficult. We just re did our kitchen in the house we are selling and were able to get new quartz countertops, backsplash, and sink/faucet for under $3k(including install) I think with whatever kitchen or kitchenette we decided to use, we could do it pretty financially savoy. We want to make sure it is nice enough though, that it would be competitive to the local apartments, since we want to charge $800-1000 per tenant.

@Matt M. We are not looking at new build. The HOAs are much more restrictive in new build neighborhoods. I like homes build in the early 2000s much more. We are considering Weld county. I'm familiar with the oil drilling. Each house and neighborhood is a different consideration, but still very feasible compared to where we currently are in Westminster and Arvada. The other areas in Denver that compare to Erie house sizes/lot sizes, at the price point is Aurora, and Parker. We really don't like east Denver compared to northwest Denver.

 @Marc Winter Thank you for the tips on the window exit. Some of these basement rooms don't have that egress window, even though the staging has a bed in it. Also, thank you for the tip on the Insurance.

We are also seriously considering getting a investment property that we can live-in flip. Every once in a while we see these pop up in Westminster. We just saw one at a great price-point(mid $400). If we went this route, then we could flip and invest in another property simultaneously. I've had my eye on Cincinnati and Columbus for quite a while, and the equity we get from this first house sale will give us a lot more options.  

Hello All, looking for some advice and cost estimation. I'm getting ready to sell my house in Westminster CO, and move a little bit north. I'm looking to purchase a home in Erie or Broomfield CO, where my family(2 toddlers, 2 huskys) can live comfortably on the first two floors, and we would rent out rooms/suites in the basement. We are looking at homes that are 3500sqft-5500sqft. There is a variety of homes that have walk-outs(ideal for separate tenant entrance) or we would have to create an entrance in a garden level or fully submerged basement. Erie is 30 minutes to Denver, and 25 minutes to Boulder so it has pretty decent access and is much cheaper per sqft than anywhere closer to Denver or Boulder. Our budget for the house is between $500-600k, and hopefully $40-60k for the remodel/finishing cost. 

A few questions. Does anyone have experience having a separate entrance dug out and built? Is there an approximate cost for this?

We are contemplating doing a complete basement finishing for about 1300-1500sqft, Space would be open concept kitchen/dining/living room, Master(ish) bedroom & non-shared bath, 2nd & 3rd bedroom with shared bath, then maybe a closet with stackable washer/dryer. We would be doing everything as cost effective as possible with materials, but contracting out a lot of the work. Does anyone have experience with this and have a cost approximation? This would be our first move into house/hacking.