All Forum Posts by: Richard Updegrove

hey there! I live and invest in Arvada. I have 2 STRs there. It sounds like you have done some good research so far! I believe fort Collins and Colorado Springs are pretty strict. I find it best to just Google the city and see if there is any info on STRs within that city or county. There's also a local podcast for the Colorado springs area which covers a ton of info about STRs, https://www.erinandjamesreales...

Also, be careful of unregulated areas. It's just a matter of time before they put an STR policy in place. I'm under contract on a property in Park County which now allows permitting for STRs. Good luck on your hunt!

have you considered doing a cash out refi or heloc on your current home and keeping it as a rental? That would give you cash for the next down payment and allow you to hold onto that first property as a rental. It's better to have multiple doors in a highly appreciating market. I'm down in Arvada and I use the above strategy to purchase a new primary every 1-2 years and turn my previous home into a rental. We currently have 1 short term rental and 1 medium term rental.

Also consider house hacking a 3 - 4 bedroom single family home. You could potentially rent by the room or short term rent out a portion of your home. Just make sure the str regulations in the springs allows that. 

@Crystal Wilson - How did this work out for you?

I'm in a similar situation. I have a heloc on a rental property and want to increase the limit as the property has appreciated 100 - 150k since opening the line 3 years ago. I am carrying a balance but I can pay that down if the lender requests it.

I've recently converted this rental property into short term rental. I'm not sure if that will impact increasing the line.

@Brandon Allenczy

What's your strategy? Are you looking to build up a portfolio with long term buy and hold?

Have you lived in the home for 2 of the last 5 years? I believe this is the criteria for selling without taking a tax hit. So this could be a good option if you have a bit of equity and want to put the cash to use in a different property.

I currently have a heloc on a rental property. It was previously my primary and is now a rental. It's nice having that line of credit to reuse and put towards future investment properties.

Is the property in good shape and is it easy to rent? I would consider hanging on to it long term, refinancing to get the bump in cash flow and possibly adding a heloc down the road when there's more equity.

You really just need to decide what your strategy is and how quickly you want to scale. That should help you make a choice.

@Mike Fieselman

Have you thought about looking into using hard money? I'm in a similar situation as yourself. I currently have 1 rental property and I'm looking to expand. I'm still considering KC as I moved to the Denver area from KC about 7 years ago. But after seeing the demand for rentals/crazy appreciation in the Denver market, I'm focusing locally first. I don't have a ton of capital and also want to BRRRR. I'm currently working on networking with wholesalers and reaching out to hard money lenders to try and get pre-qualified. I'm also beginning to get in touch with contractors as well. I've heard that it's tough to pull off a super successful BRRRR in this market, but I ok leaving a little bit of money into a deal in this market.

Also, I'm using the nomad strategy to purchase properties with less money. I bought my current primary last June and turned my first home into my first rental! It's an awesome way to get into properties with less money. Just make sure to run the numbers on the property as a rental before you jump in.

Stuart,

What is your end goal with investment properties? Do you want to keep moving to end up with multiple properties? Are you planning on doing all of your own property management? I'm asking these questions because they can help you decide your strategy and where you want to go. The biggest issue I can see with renting by the room is managing multiple tenants and leases. I've heard that most property management companies will not take on these types of properties.

I don't currently run any short term rentals but I've heard short term rentals are actually more in demand in Colorado during covid. It makes sense because people working remotely have the flexibility to work wherever they want!

I live in Arvada and currently own 2 properties. I have one full time rental and a primary. I'm using the nomadic strategy to purchase properties and then rent them out 1 - 2 years later. I'm thinking about purchasing a new primary in the next 3 - 6 months and turning my current home into a medium term Airbnb. I don't want to manage a short term rental or pay someone else to do it for me.

I agree about having options. I always like to make sure that I can rent out my properties as a full time rental as a plan A. Personally, I'm going to hang on to my properties for the appreciation.

@Tyler Caglia congrats on taking action and getting 3 rentals in one year! That's really awesome! I started with my first rental last year and I'm looking into purchasing an out of state property in 2020. I have a few questions about the process.

How did you find and manage your contractors for rehabbing? From what I've read, this seems like one of the most challenging issues with out of state investments.

your projected cash flow doesn't account for vacancy, maintenance and property management? Isn't cashflow the remainder after all of those other expenses are covered?

@Tyler Howell thanks! Do you know a good CPA? I've already done my taxes for 2019 but I'm going to need an accountant moving forward.

Investment Info:

Single-family residence buy & hold investment in Arvada.

Purchase price: $272,000
Cash invested: $22,000

I purchased this home as my primary residence in 2015 with a 3.5% fha loan. This home is a 1400 sq. foot updated 2 bedroom 2 bathroom single family. I refinanced out of my pmi in 2017 and switched to a 15 year conventional. In June 2019 I purchased a new primary and turned this home into my first rental! I’m not currently cash flowing on the property but I am putting back $200 a month. I plan on doing a cash out refi soon to free up funds for my next purchase and provide cash flow.

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

After spending hours on bigger pockets and listening to podcasts I was completely hooked on the idea of becoming a real estate investor. I thought about Purchasing out of state but decided to go with the nomad/live in then rent strategy to get started.

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

Worked with my real estate agent to find the property. I got lucky as this home was a bit too small for families which worked to my advantage. It was super stressful trying to purchase in the Denver area in 2015!

How did you finance this deal?

FHA loan with 3.5% down.

How did you add value to the deal?

I’ve had to replace the roof and put in a new HVAC system.

What was the outcome?

I turned my first home into my first investment property which I plan on holding for the long term.

Lessons learned? Challenges?

Finding a great real estate agent is crucial when getting started. My agent knew the area well and found me a house in an up and coming neighborhood. After managing my first rental, I believe that setting rental standards/requirements and doing a thorough background check is crucial to finding amazing tenants.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My agent is awesome! Reach out if you need a solid agent in the Denver area.

Thanks Whitney,

I moved into a new home last year and turned my first home into a rental. I've been managing that property myself to understand the landlord/property management work involved with a rental property.  Do you have any tips on researching/finding a good turnkey provider or property manager?