Deal Analysis – It’s All About Your Mindset: House Hack in Arvada
This deal analysis profiles first time investor Ryan Lind. Agent Lauren Valinoti helped him find a house hack in Arvada that is set to bring him great returns. But just like every other investor, he ran into some speedbumps along the way. We sat down with him to go over the deal and what he’s learned throughout the process. Listen to the podcast to find out how this first rental property gets him closer to his goal of $10K in monthly cashflow in 7 years.
Chris Lopez, Ryan Lind, and Lauren Valinoti.
Three Learning Options!
  1. Listen to the podcast “#279: Deal Analysis – It’s All About Your Mindset: House Hack in Arvada” on the Denver Real Estate Investing Podcast
  2. Watch the YouTube video (at the bottom.)
  3. Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast or video.

Investor Profile 

Ryan read Rich Dad, Poor Dad in college and knew he wanted to get into real estate.  These dreams were put on hold when he graduated with $80K in student loan debt that he worked to pay off over the next five years.  After moving to Colorado, he got really into BiggerPockets and lived with a roommate who was house hacking.  He found a job that allowed for flexibility to pursue real estate and he bought his own house hack in November 2020.

Long Term Real Estate Investing Goals

He wants $10K in monthly cashflow from real estate and to own 10 properties by the time he’s 40, 7 years from now.

Strategy for Achieving Goals 

His plan is to house hack his first three properties and add a rental during the first three years.  He is going to use a Home Equity Line of Credit (HELOC) from the first property to pay the down payment of his fifth property.  He will continue this method until he reaches his goal.

Investment Property Details

House Hack in Arvada home

Deal Overview 

This is a four bedroom three bathroom single family home in Arvada, located five minutes north of Olde Towne.

House Hack in Arvada real estate map

Appealing Features of the Property 

The house is a brand new flip that has a huge kitchen for entertaining and a big basement bedroom with a bathroom that he could easily rent out at $1000 a month.  It’s next door to a large park and around 15 minutes from downtown Denver.  

Investment Business Plan

He plans to live in the house for one year and then rent it out as a room by room rental. 

Sourcing 

I found this property on the MLS.  It was the fourth property we looked at, and he knew as soon as he walked in that this house fit all of his criteria.  

Property Contract Details

Inspection Issues 

During the inspection, some relatively minor and easily fixable issues came up, such as repairing outlets.  Ryan initially skipped the radon inspection but decided to go back and have it done.  It was a good thing he did, since the inspector found high radon.  The seller didn’t want to give any credits toward installing the new system, so they agreed to fix it themselves.  I always recommend that buyers have radon tested; even if there’s a mitigation system already in place, the inspection will test to make sure the system is functioning properly.  

General Notes 

We agreed to close in 14 days as part of our offer.  The sellers appreciated the fast turnaround time for closing, since they wanted to get the property off the books.  However, this created some tension when they needed to resolve the radon issue so quickly.  The radon system wasn’t entirely fixed until after closing and both Ryan and a tenant moved in.    

Property Financing Details 

Stabilization 

Plan v Reality

Ryan planned on renting out the extra bedrooms quickly, but he faced some unique issues.  Shortly after closing on the property, there was a flood in the basement bathroom.  He had a tenant in the basement who had already lived through the issue of getting the radon system fixed.  The roommate wanted to move out after his bathroom became unusable, but Ryan convinced him to stay by giving him 1.5 months of free rent.  The roommate could see and appreciated how hard Ryan was working to repair the bathroom, at one point getting quotes from 20 different contractors in one day.  

When Ryan was ready to rent out an upstairs bedroom, he ran into problems trying to post the listing on Craig’s List and Facebook Marketplace.  Someone else was using his photos as a scam, and Ryan’s attempts to list his bedroom were continuously removed.  Eventually, he posted the listing on Roomster and found a tenant through that site.  

Spreadsheet Analysis 

House hack in Arvada Deal Analysis spreadsheet

The property was listed at $490K, but there were no nearby comps to support that price.  The house had fallen out of contract once before, so we decided to offer under list at $475K.  We made the offer more competitive by agreeing to close in 14 days.  Since the seller was a flipper, we knew this would be attractive to them because it would allow them to move onto their next project.

Property Operating Expenses 

Property Operating Expenses analysis spreadsheet house hack in Arvada

First Year Returns 

First year returns spreadsheet house hack in Arvada

Immediate Goals and Plans for the Property 

Ryan wants to create a “symbiotic living environment” for himself and his two other tenants.  Once COVID starts to ease, he will look into adding a third tenant in the remaining bedroom.  For now, that room is being used as his office.  He wants to complete all of the minor repairs before November, when he will have lived there for one year and can move out.  

Exit Strategy/ Long Term Plan

Right now, Ryan is focusing on the short term and his next acquisitions.  

Conclusion  

Ryan is looking at potential rentals and wants to purchase his next house hack in November.  This would put him at 3 properties in a year, setting him up nicely to meet his long term goal of 10 properties by age 40.  

Even though Ryan ran into a lot of issues throughout this process, he’s been able to maintain a positive outlook.  He sees everything he dealt with as a learning experience that he can use for his next property.  Because the entire bathroom had to be redone, he now has contacts with a variety of contractors he can use later.  His insurance covered most of the repairs, so it wasn’t a problem giving the roommate a break on rent.  When he looks at the spreadsheet and sees the returns he’ll be getting from this house, he knows he made the right decision.  

Connect With Guest Ryan Lind

If you’d like to connect with Ryan to discuss this deal or his expertise in commercial real estate, reach out to him at ryan.lind11@gmail.com, 847-571-1105, or LinkedIn

Get Started Building Your Own Rental Portfolio

If you’d like more information on the Denver market in general, you can schedule a free real estate investment consultation. For information on how to get started investing in Denver, check out our 2021 Denver Real Estate Investing Guide. You can also sign up for our free Real Estate Investing Newsletter and download free real estate spreadsheets and toolkits.

YouTube Video: Property Analysis – It’s All About Your Mindset: House Hack in Arvada

Analyze Before You Buy
Start Evaluating Properties Today with Our Free Toolkit
In a rapidly changing market, having the tools you need to help you analyze the data is critical. Know what the numbers will look like ahead of time so you don't buy a bad deal. Our toolkit is designed to help you thoroughly analyze any kind of deal so you can invest with confidence.
Start analyzing your Colorado investment properties today
Rental Property Spreadsheet • House Hacking Spreadsheet BRRRR Calculator Spreadsheet • Fix and Flip Deal Analyzer Investing Maps • Rehab Pricing Estimator
Start analyzing your Colorado investment properties today
Rental Property Spreadsheet • House Hacking Spreadsheet BRRRR Calculator Spreadsheet • Fix and Flip Deal Analyzer Investing Maps • Rehab Pricing Estimator
Authors
Lauren Valinoti
Similar Post You Might Also Like
Deal Analysis - Denver
How to Combine House Hack Strategies to Live for Free
One of the great things about house hacking is its versatility—house hackers aren’t locked into just one strategy. In this
Colorado Springs
October 2022 Market Updates: Take Advantage of Dropping Rates and Seller Concessions
The October 2022 market stats for Denver, Colorado Springs, and Pueblo are now out, and our roundtable is back to
Sign Up For Our Newsletter
What do you want to learn today?