All Forum Posts by: Nick Kramer

I purchased my 1st home at 22 years old straight out of college. 

PP: Aug. 2019 - $356,900 w/ 20% down (borrowed a large chunk of the down payment). 

Refinance: Nov. 2021 - Property appraised for 480K, I completely paid off my second, and the interest rate went from 4.25% to 3.25%

Rents While Living In Property: $2,000 per month. 

Rents After Moving Out: $3,300

I was able to secure a private loan for part of my down payment, as well as have my parents co-sign on the loan (I am extremely fortunate and grateful). 

I lived in one room and rented the other four rooms to college students. 

After about 8 months, I wanted some extra income so I rented out half of my room to my 68 year-old co worker, and separated the room with a curtain....

Here is a photo: 

If I were to go back, I would NOT have done this, but it was a good learning experience. College kids and someone of that age under the same roof tend to butt heads....

Here are some key things I've learned after 4 years of landlording/house hacking: 

1. Communication is HUGE. 

- Being straightforward and honest is extremely helpful when managing tenants. ESPECIALLY when you're living with them. 

- Making sure their responsibilities and your responsibilities are clearly defined, giving heads up about workers coming in to do upgrades/maintenance, being proactive about renewals, deposits, strict about the lease agreement (but lenient when it makes sense), etc. has been instrumental. 

2. It was NOT sexy... 

- Especially renting by the room. I've been woken up late from parties, broken glass, revving engines, etc. 

- I've had to haul away a ton of trash, cans, dirty clothes, etc. Spackle and paint numerous times, fill holes in the wall, have had to wake up early to move my car due to the parking situation, etc. 

- Have had to sit down all five tenants and reset expectations in terms of cleaning (including the 68 year old co-worker).

3. When updating, it probably costs MORE and will take LONGER than you think.

- I was able to refinance, pull out $ to completely pay off the gentleman that loaned me part of the down payment, AND have $20k left over for renovations. (My payment ended up being LOWER still, going from 4.25% down to 3.25%). I was extremely lucky with this timing. This property was purchased in August of 2019. 

- I redid the paint, outlets, switches, flooring, countertops, got new appliances, etc. during the students winter break. I had less than 1 month to get it all done. I confirmed with all of them when they would be gone, and let them know what I was doing. 

- When they got back, there was only about 4-5 days that went by before it was finished, but it was scheduled to be finished a week before they got back. 

Here were the results: 

I have now moved out of the home and I am cash flowing roughly $1k after all things considered (I self-manage).

I regret a few things, but feel unbelievably lucky and grateful with how it went (especially with the timing of the purchase and refinancing). 

Keep pushing forward!!

@Nick Kramer -first thank you for your service! I love investing in military towns. My properties are near Fort Cavazos (formerly Fort Hood). My buddy Tanner Pile is in that area (https://www.biggerpockets.com/users/tannerp30) he may have some insights for you!.

Thanks for the shout out @Jon Schwartz. 

@Nick Kramer I would be happy to connect. I have scaled to five house hacks in Colorado Springs myself and would be happy to walk you through how to make that happen. We can sit down and run the numbers with my House Hacking Calculator as well to show you what's possible with multifamily and other house hacking strategies in the Springs! 

 @James Carlson and @Brian Bohrer outlined fantastic information. Putting zero into the mortgage each month is going to be a tough ask, still doable with the perfect deal but most of the time you are going to have to pay in some. 

My client just closed on a 4 plex with his VA loan 3/6/23. He is saving/creating ~$30k a year over renting including maintenance/vacancy/landlord paid utilities for the property. He is still paying in $400 a month but has a place to live vs his apt at $1700 a month. With write offs and very lean number underwritten for appreciation he is still absolutely crushing it. In one year, if we execute the plan of installing a washer/dryer in each unit the cash flow will be crazy. If he does nothing with rents and keeps them below market, he will still cash flow about $1000 a month fully rented (so maybe $600 when including vacancy/maint/etc...)

Some things to note:
He did time the interest rate perfectly and put down 10%. 

Theoretically, with this same deal you would be looking at 500-600 more per month with 0% down but each situation is different. I could be way off depending on your situation and credit. But since they are 2bd, you could get a roommate and hit that sweet "living for free" range. 

VA loan limits are huge in El Paso for quad plex. My preferred lender, Zack Tarbet, can illustrate what you are able to do. 

Reach out with any q's and good luck!!!

Welcome to the Springs @Nick Kramer!

I think you have a great strategy in mind and one that could definitely kick start your investment goals! I think the biggest thing you have going for you right now is that you have VA eligibility and there are a ton of homes on the market who are looking for an eligible VA buyer.

The approval you have from your lender is based on TODAY's interest rate, if you were to find a home with an assumable loan with 3%-4% rate you would be eligible to buy a more expensive home and therefore open up your house hacking options quite a bit.  I personally purchased my most recent home with an assumable loan that has a 3.08% interest rate and it is saving me THOUSANDS every month on mortgage payments and additional principal debt paydown!   

I have a blog post on biggerpockets where you can read more about the strategy of buying a home with an assumable loan - https://www.biggerpockets.com/forums/922/topics/1175338-maxi...

I would also keep in mind that many VA buyers in the area were recently bitten by the market. Many bought in 2020, 2021, and early 2022 who are now being PCS'd out of the area and have to sell a home that has dropped in value over the last 18 months. Many are left with a home that is worth less than the current mortgage. Don't let this be you!

One way to avoid this is to have a plan for when you do have to move.  By purchasing smart with an assumable loan, you will have a lower monthly payment that will have a much better chance to be covered by the rent and could also leave you enough room to pay a property manager (if you choose) to take care of the home if/when you are relocated in the future.  This would allow your home to continue building equity until you are ready to sell for a juicy profit down the road!

If you are interested in learning more about this process please do not hesitate to reach out and I would be glad to talk with you!  I am also a professional landlord and would be willing to work out a plan to assist you with the management portion of your adventure as well!

I wish you the best on this new and exciting journey and hope you have a great time here in Colorado Springs!

Take Care,

Brian Bohrer

I was stationed at Carson, 98-2000. Bought my first house for $87,000 and it's now worth $325,000. Wish I had held onto it!

@Nick Kramer, you should talk to @Ryan Thomson!

@Nick Kramer

An early welcome to Colorado Springs. I imagine you're at Carson? Not a bad place to be stationed. The physical beauty here is unmatched.

I know the idea of living mortgage-free is exciting, but it's just not doable in an area like Colorado Springs (or Denver just to the north). Maybe in Pueblo. the flip side is that one of the reasons you're not cash flowing is because home values are going up quick, so while you may not cash flow, you're likely to gain nice equity from appreciation. 

In this high-interest rate/high-price market, house-hacking is more about offsetting as much cost as you can. You should be able to get $800/room in most areas of Colorado Springs, plus or minus a hundred or two depending on exact location.

The $300k might make a legit SFH tough, unless you're open to taking on a big project. Are you open to a townhome. There are a decent number of 2br townhomes on that southeast part of town. But there are also a few 3br every once in awhile. For every extra bedroom you get, you're talking an extra $800.

Anyway, don't get bogged down by cash-flowing right off the bat. You gotta live somewhere. Might as well get paid for it. And the Springs is a strong market for future growth.

Good luck! 

I’m active duty Air Force and ran into the same issue at my last base. I wanted a MFH, but they were not in good areas. I settled on a new build under $200K. It cashflows nicely now, mind you with a great interest rate in 2019.

What type of home can you get at or a little below $200K?