All Forum Posts by: Mike Paisley

Thank you @Craig Curelop and @Ian I Leinwand! 

I just got done listening to the BP podcast (Craig) where you explained how you moved to the Denver area from Silicon Valley. Great story and very motivating. From my understanding, finding a 5BR for under $400k is a great place to start for rent by the room strategy. I will narrow my search to Arvada, Westminster, Thornton, Lakewood, and Loveland. Thanks for your input!

My goal is to move to the area and as long as I am in a situation where my first property is break even and my housing expense is covered, I will be able to save even more $ (I work remote and can work/live anywhere) until I can purchase a second property. At that point in time, I will have my boots on the ground and have a better understanding of the marketplace.

Thank you for the feedback everyone! So it sounds like I might need to be a little more patient and save more than $20k?

I'm not opposed to going the single family, rent by the room route to get into a property within my budget and still have my mortgage (or at least the lions share) covered. 

Is there anything else I should be considering/taking into account?

Hey BP Community!

I recently had a family member move from the Midwest to Colorado (near Loveland) and am considering also making the move. I had posted a few months back about my desire to buy and house hack my first property after becoming debt free. I have been saving like crazy and will have about $20,000 to put toward a down payment/closing costs by the end of the year.

Ideally I am looking for a muli-family, but would also consider other strategies such as the rent by the room.

My question to all the Colorado RE investors, what are some good cities/towns to start to search?

To narrow the focus, I am willing to look anywhere from Denver up to Fort Collins.

It would be a dream come true to live in Colorado.

Thank you so much!

@Berridge Thomas just wanted to give you an alternate perspective. Ultimately, it is up to you what you would like to do with your $ and only you get to decide. 

With that being said, if I were you, I would keep that money in an investment account and use the liquid cash on hand for a BRRRR.

Will you be doing a live-in-brrrr or do you already have a primary residence? 

One strategy that you could look into is getting a FHA loan which would allow you to put low $ down (typically 3.5%) There are requirements for the property and if is not in the right condition, it may not be eligible for the loan. From my understanding, you also would have to live in the property for a year before moving out.

What type of property, single family or multifamily?

Again, just wanted to give alternate POV. It's hard to determine what the best (if there is such a thing) move would be without seeing your whole financial/life picture.

Hey Berridge. I would like to start of by saying I'm excited for you and your first BRRRR. A few questions and then a suggestion. What do you already have built for retirement savings? What do you already have saved to put down/rehab for a BRRRR? What are your financial goals?

Depending upon your situation and whether or not you are pleased with the fund (and fees) that your $40k is in (some employer plans do not have the best options) I would look at rolling into a low fee IRA.

I wouldn't suggest withdrawing the money that you have worked hard and stayed disciplined to accumulate. You have a lot of years for that money to compound and doubt you would be please with this decision long term.

I would google "compound interest calculator" and see what happens to your $40k after 30 years of compounding. Depending upon what fund you choose and the % return, you will be looking at a few hundred thousand dollars when you are eligible to withdraw.

Thank you everyone for the great ideas! It sounds unanimous that house hacking is the way to go and I should do this sooner, rather than later. 

All excellent suggestions, thank you so much for your feedback. There are a few nuggets of information that I want to extract from the thread. It sounds like some of the most important components are tracking, having a goal and "reverse engineering" it to current date, house hacking sooner rather than later, networking, and self education.

These are all great points and to elaborate on my current position to help provide more detail to the conversation, here are some points I would like to make regarding the above components.

Tracking: I current track with an excel spreadsheet. My average monthly expenses over the past two years has been $1,000/mo. or $12,000 annually. This does not count my debt payments which where a large portion of my expense. I am blessed to have very affordable rent, (I rent out a room in a house) negotiated a low cell phone bill, and meal prep all my meals so my food cost is about $40/week or $160/mo. I love the idea of tracking net worth and my "FI status." I will be adding these to the spreadsheet.

Reverse Engineering Goal: This is an area that I need some work in. I have been so focused on repaying debt over the past three years, now that I've reached that goal I'm feeling a little lost. I have built my "savings" muscle (I'm a natural spender so this is a learned skill) in the process and have been saving every penny not going toward expenses. I really liked the advice to create a timeline from now until age 35 and map out the things I need to accomplish to reach my passive income goal. This is something I will continue to play with until I have more of a clear picture.

House Hacking: This is something that I have been wanting to do eventually, but it sounds like I need to look into this sooner rather than later. I have committed to practicing running the #'s on properties so when I am ready to start looking, I will feel more confident in what I am looking at that. I created a spreadsheet to make this a more systematized process and includes Sale Price/Down Payment/Interest Rate along with PITI, Cap Ex, Vacancy, Property Management, and Repairs and Maintenance. I will also lean on the BP community and will post a deal if I am considering pulling the trigger on my first house hack.

Networking: This community has been very insightful already and it's only my first post. I am humbled to have gotten so many great responses. I don't know many people who invest in real estate or are debt free, so having an online community is helpful as it allows me to be around like-minded people. Moving forward, I am working on building a stronger network of people who are real estate investors/pursuing FI.

Self-Education: This one is huge for me. I did not mention this in my intro post, but when it comes to learning and self-education, I am a little bit of a nerd. I listen to podcasts daily (some of my favorites are the BP, BP $, and The Side Hustle Show) read at least two books per month, and try to watch as many YouTube videos on real estate as possible. Some of the most influential reads that I have had are: Rich Dad Poor Dad, Total Money Makeover, Millionaire Next Door, Meet the Frugalwoods, Richest Man in Babylon, Think and Grow Rich, Set for Life, and The Book on Rental Property Investing. 

Additionally:

Investing: I just opened a Vanguard Money Market account and have also have a Roth IRA set up through Vanguard. This is in addition to taking the company match that my current employer offers.

Automating: This is something that I will definitely be doing, but have a possibly unique perspective on this. I want to be forced to do things manually and be intentionally inconvenienced until it becomes ingrained as a personal SOP. Then I will transition into automation. 

Insurance: I am extremely fortunate to have a job in our current economic state and my employer offers a nice health insurance plan. I have begun preliminary research on what insurance options are out there for the self-employed. I haven't seen any monthly premium #'s, but what I am reading is (generally speaking and may not be right for everyone) high deductible plans are recommended. If anyone is willing to share what they do for insurance if they are self employed, that would be appreciated.

Again, thank you all for your help. It is very inspiring and motivating to be a part of this community. Enjoy your Sunday!

@Marcus Johnson Yes sir.

Awesome, it's nice to meet a fellow Minnesotan on the BP forums. I appreciate your feedback and suggestions and am currently working on my spreadsheet. The meetups are on my radar for when gatherings are allowed. Thanks again!

Minneapolis, MN area.