All Forum Posts by: Steven Mitchell

Hey, Shu Zhu - I have two properties here myself and just got my AirBnb license for my property here in Denver. I'd be glad to act as a resource for you and I can certainly help you figure out a strategy and find a manager.

It sounds like you'd be looking for an investment property and not a primary residence, correct? I could walk you through the current STR rules as they vary in different part of Denver. In the city and county of Denver for example, you cannot run a property as an AirBnb unless it's your primary residence. That said, there are other areas where you could run an STR year round without any license, tax, or regulations. I'll message you directly as well.

Hey, Brad - I just happened to complete this entire process and it is indeed confusing!!  I'll message you directly and will gladly walk you through the whole process. I don't think you need the Letter ID you mention above. Getting the required licenses in Denver is actually not too difficult.  I'm thinking I might create a document or YouTube video to walk others through the process as it's just not clearly laid out. 

Nice job - duplex and it's in the legal STR zone and you were able to use a VA loan?! Sounds like a huge win!! Congrats!

Thanks, Bryan & Grace!  Excited to get this property closed and get it up and running as a rental!  It's located in Athmar Park on Mississippi Ave just west of I-25.  

Investment Info:

Single-family residence buy & hold investment in Denver.

Purchase price: $532,000
Cash invested: $15,000

5 Bedroom, 2 Bath built in 1950. Basement has separate exterior entrance and small kitchenette. Upstairs has 3 bedrooms and one bath. One upstairs bedroom was originally an unheated sunroom with baseboard heat added. 2 car garage.

Planning to AirBnb the top of the house (3B/1B) while living in the basement unit (2B/1B) with kitchenette.

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

Craig Curelop and the FI Team and Bigger Pockets of course!

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

MLS - represented myself as my own buyer's agent. Received $1,000 seller credit for inspection items. Sellers added baseboard heating to unheated sunroom to ensure the square footage was included in the appraisal.

How did you finance this deal?

5% Conventional Loan. Sold a condo in south Denver and used those proceeds along with $2,000 borrowed from my Roth IRA account.

How did you add value to the deal?

I offered full appraisal gap coverage (property appraised at value), a 23-day close, limited inspection items to health/safety such as electrical, roof, radon, etc., and put down $10,000 in earnest money.

Lessons learned? Challenges?

Make sure all rooms in the house are heated. Unheated rooms will not count as livable square footage in the appraisal.

Always do your due diligence based on the inspection report. Found very shoddy electrical work in the electrical panel and received a credit from the sellers to repair after closing.

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

I work as a realtor with the FI Team under Craig Curelop and definitely recommend any agent on the team!

Nice work, Jackson! Would you be willing to share what state you're in?  I'm house hacking near Denver myself. 

Hey, @Russell Leggett - that's exciting to hear you're interested in getting into owning a rental! It's definitely a big shift but certainly doable for almost anyone :-)  I would recommend starting to find resources - I found Brandon Turner's book on Managing Rental Properties quite useful. You should reach out to some folks locally to see if you can find a good lease template that's been vetted by a lawyer. There are lots of online platforms for vetting tenants, keeping records, accepting payments, etc. Personally, I use Apartments.com but there are other options that would work just as well if not better. Then you get into the realm of needing a good insurance agent, and a RE-specific accountant. Otherwise, you might consider renting out your current property and buying the other home as your primary residence - financing an owner occupied property is much easier and requires a smaller down payment...just an idea. In any case, take it one step at a time, find good resources, take imperfect action, and use your best judgement. I just became a first-time landlord this past year and have now handled 8 different tenants with relative ease.  You can do it!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $401,500
Cash invested: $20,075

Contributors:
Craig Curelop

House Hack investment. Built in 1955. 4 Bed, 2.5 Bath. 1,100 sq ft main level.

Upstairs: 3 bedrooms, 1 & 1/2 bath.
Downstairs: 1,000 sq ft finished basement with bedroom, office, full bath, and full kitchen (no dishwasher). 100 sq ft basement storage/laundry area.

Rehab: 55x16 ft concrete driveway $11k cost versus $3k seller credit. Painting in all rooms of the house. Replaced old carpet in basement with vinyl plank. Back yard reseeded and back fence repair as improperly installed.

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

Reading The House Hacking Strategy by Craig Curelop!

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

Found on the MLS via the FI Team and real estate agent Nick Monge. Offered asking price and requested a credit for driveway repair.

How did you finance this deal?

5% down conventional loan. Used a 401K loan to finance the down payment and preserve cash for improvements after moving in.

What was the outcome?

Ended up effectively making this 4 bedroom home a 5 bedroom rental due to the mother-in-law suite in the basement. Currently making $350 per month over the mortgage while living in the property and planning to make about $1,200-$1,400 per month over the mortgage after moving out.

Lessons learned? Challenges?

Avoid emotional over-investing. While a concrete driveway was great, I could have gone with loose stone for a lot less money. Hire painters to speed up the rental process and avoid vacancies as much as possible. Get the rooms rented as fast as possible (with great tenants based on high standards) and keep those rooms rented! Also set up all leases to expire or renew every July so that you can allow tenants the option to move out and set the expectation of renewal and increasing rents slightly.

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

The FI Team and agent Nicholas Monge - both are amazing!

Hi David - is this school debt or personal debt?  If that's CC debt, there's no way I'd rent to them. If it's mostly school debt for someone who is, say, a medical student or newly practicing doctor or surgeon, I'd consider renting to them. This is a tough one for sure. As long as you don't think that debt service will interfere with their ability (or priority) to pay the rent, then I'd say go for it.  Otherwise, if you're not comfortable with it, I'd say keep looking for a renter with a more "normal" amount of debt. 

@Jason Hicks - No problem!  Of course, if you have an agent, I suggest making sure they are house hacking and have experience buying and managing these types of properties for themselves as well as others. There are lots of ways to house hack for sure!