Many aspiring house hackers understand the concept and long-term wealth-building potential of house hacking, but they lack the local knowledge on how to apply it to the Denver market.
If you know you want to get started, you can jump to the Guide Outline.
Every real estate market is local; Denver is no exception. A lot of the standard, national techniques that apply in other markets don’t work here in Denver.
As many of you know, a lot of our clients are house hackers. I’ve noticed a very common pattern as I’ve talked to hundreds of them here in Denver. The vast majority of them have a high level of understanding about what house hacking is from diligently researching but don’t necessarily have the knowledge of the detailed, specific steps it takes to put their plan into action here in the Denver market. This guide provides that detailed, specific action plan on how to buy house hacks and build a rental portfolio here in Denver.
We are releasing The Ultimate House Hacking Guide for Denver: A Technical Guide to Building a Denver Rental Portfolio Through House Hacking. Putting together a detailed guide has been on my todo list for almost a year now. When we had the lockdown for COVID in March and April, I had the time to really start working on it. I partnered with Joe Massey and Jeff White to put it together and publish a book!
This book is a collaborative effort between Chris Lopez, Joe Massey and Jeff White. The three of us share many common beliefs towards investing. You will quickly notice that we have our differing points of view as well. Guess what? There is no one “right” way to invest. This statement is even more true with house hacking, since you’re balancing your personal living needs with an investment property. One of the goals of this guide is to educate you to help you figure out the “right” way for you.
Read, Listen or Watch
- Order the book on Amazon or grab a copy from us
- Listen to episode “#203: UHHG – House Hacking Denver: The Ultimate Guide Overview” on the Denver Real Estate Investing Podcast
- Watch the YouTube video (at the bottom.)
- Read this blog post, which is from the book.
About the Authors
Chris Lopez is an Investor-friendly agent at Your Castle Real Estate. He helps investors build a rental portfolio through Denver house hacking and buying traditional rental properties. He also helps investors create a real estate retirement plan to target a monthly cash flow in retirement. Chris is also an investor and is currently doing a multigenerational family house hack. You can reach Chris at 303-548-0846 or Chris@DenverInvestmentRealEstate.com.
Joe Massey is a Senior Loan Officer and Branch Manager at Castle & Cooke Mortgage. Joe helps house hackers, investors and homebuyers with getting the best permanent financing in place based on their situation and the property. Joe is an active investor. You can reach Joe at 303-809-7769 or jmassey@castlecookemortgage.com.
Jeff White is a house hacking coach who helps investors with maximizing their returns and stabilizing their properties. He’s an active house hacker who is using this investing method to achieve financial independence. You can reach Jeff at 720-951-6868 or thehousehackingcoach@gmail.com.
Guide Outline
Module #1: House Hacking in the Denver Market
While it’s a newer term and a great name, this investing strategy has been around for a long time. Check out this module to see how each of us define it, the variations of it, and how it differs from traditional investing.
This module covers:
- House hacking vs. traditional investing
- A real-life example
- House hacking vs. Nomad™
- What strategy is right for you?
- Answers to common questions
Module #2: Financing for House Hackers
In this section, Joe helps us to understand the basics of financing, which loan types are available for house hackers and why house hacking in Denver can be so attractive from a financing perspective.
This module covers:
- Owner-Occupied vs. Investment Property Loans
- Types of Loans for Owner-Occupants
- Paying Points to Buy Down Your Rate – Does it Make Sense?
- Mortgage Insurance – Do I Have to Pay It?
- Which Option is the Best?
- How to Get Started
Module #3: The Best Properties for House Hacking in Denver
This chapter discusses the best properties for house hacking in the Denver market today. Several people who come to us have researched it online about the type of property they think they need to be successful with a house hack strategy. While certain properties might be more ideal, the information usually acquired is from talking about house hacking on a national and very general level. Online national information is often like a “square peg in a round hole” situation—it just doesn’t work! We want to look at house hacking on the local and specific level and what will work best for our current market in Denver.
This module covers:
- The four main ways to find an investment property
- Are multis or houses or condos the best?
Module #4: The Best Locations for House Hacking in the Denver metro area
Since we went over which property types work best for house hacking in the last chapter, it only makes sense that we now explore what areas of the Denver Metro area we find those types of house hack properties.
This module covers:
- Balancing act: personal versus investing
- Investing criteria
- Why trends are your friend
- Government programs that are relevant to house hacking
- House hack locations in Denver in relation to rental locations
Module #5: Maximizing Rents for a House Hack
There are two scenarios that we need to consider when we are evaluating how to maximize rents for house hacking. How to maximize rents while you are living in the property, and how to do it after you move out.
This module covers:
- Renting Room by Room
- What is a bathroom worth in a Denver house hack?
- Mother-in-law suites
- Short-term rentals – Airbnb
- Medium-term rentals
- Long-term rentals
Module #6: House Hack Deal Analysis
All of us agree that the focus for deal analysis should be on #2 – after you move out and convert it to a rental property. Remember, you are buying a future rental, so the numbers need to make sense as a rental. It’s common for new house hackers to get tunnel vision and only focus on the analysis while living there. Don’t! The real wealth-building comes from buying multiple house hacks that make sense as rental properties.
This module covers:
- Property analysis spreadsheet
- Assumptions: garbage in = garbage out
- Deal analysis: room-by-room house hack in Aurora
- Analysis after move out
Module #7: Personal Finances and Goals for a House Hack
Having a plan for your finances and writing down your investing goals are two key habits that you want to implement. In this chapter we will go over some key points to keep in mind and tips on how to best plan your future, and not only buy your first house hack, but make sure you keep it through the ups and downs of the market, through the curveballs life throws at you and set you up for long term success.
This module covers:
- Common principles to practice
- Four phases to investing
- What is your cash-flow goal?
- The 33% rule of thumb
Module #8: Long-Term Modeling for House Hackers
The goal of this module is to walk you through a long-term financial model of buying house hack properties. The model balances key variables and simplicity. It’s designed to show you the long-term power of buying multiple house hacks and ask key questions along the way.
This module covers:
- House hacking spreadsheet model
- Property #1: Aurora room by room
- Property #2: Another Aurora room by room home
- Property #3: Another Aurora room by room home
- Property #4: Another Aurora room by room home
- The long-term model
Module #9: Building Your House Hacking Team
As with any real estate investing strategy, it is important to have a solid team in place to help you execute purchasing your real estate properties. The type of investing you are embarking on will dictate who you need on your team. For this section, we will obviously be talking about assembling a team to help you purchase a house hacking property.
This module covers:
- Key people needed for house hacking team
- Real estate agent
- What to look for in an agent
- Lender
- What to look for in a lender
- Home inspector
- Insurance broker
- Pre-approval letter
Module #10: Starting Your House Hack Property Hunt
Going out and actually looking at properties is arguably the most exciting part of the process when searching for homes. While it may be daunting for clients waiting to get to this step, it is important that our clients are fully prepared and knowledgeable about the process. We like to set good expectations so that our clients feel empowered to make quick and knowledgeable decisions.
This module covers:
- Checklist
- Our process for finding properties
- Step #1: set up property searches on REColorado
- Step #2: Investor reviews properties and sends over deal analyses
- Step #3: Review the deal analyses
- Step #4: “First date” property walk
- Step #5: Refine and keep looking
- Structuring offers
- Colorado’s state standardized contract
- What makes a good offer?
- Submitting an offer
Module #11: You’re Under Contract on a House Hack
Congratulations! You are under contract. Now that you’ve identified a great property and are officially under contract, we want to talk about the next steps. We’ll discuss your responsibilities, our responsibilities and what you can expect moving forward.
This module covers:
- Next steps
- Dates and deadlines
Module #12: Just Closed On Your House Hack, Now What?
So, you finally found a great property that will work for you, and the keys are in your hands. What a wonderful feeling! Now what? This is where the fun starts! In this module, our expert Denver House Hacking Coach, Jeff White, will guide you through the top six things you must consider before acquiring your first tenant.
This module covers:
- Fair housing laws
- Advertising your property
- Getting your first tenant
- Lease signing
- Moving in and property management
Module #13: Buying Your Next House Hack
In this section, we will be talking about preparing to buy your next house hack property. Whether it’s moving from your first house hack to your second or your fifth house hack, we will help you with the steps needed to transition to that next one. We will go through some considerations you will want to keep in mind when planning your next house hack and turning your current house hack into a rental.
This module covers what to include on the checklist for your next property.
Module #14: Play the House Hack Long Game
I rarely see blogs, podcasts and YouTube videos discuss the long-term investing options that Denver house hacking present. Yes, they do a great job of focusing on living for free or near free for a year or two, but they don’t put it into context of what house hacking can do for you over the next few decades. Well, this section will!
This module covers:
- Cash flow
- Equity build
- Different scenarios for achieving $10,000 / mo
- Rate and term refinance to increase cash flow
- Cash-out refinance
- Determining the amount of equity
- Return on Equity
- Return on Investment
- Case study comparisons
Module #15: House Hacking in Colorado Springs
While writing this book, a great opportunity popped up to partner with an agent in Colorado Springs. Her name is Jenny Bayless. She’s an active investor in the Springs and a CPA turned investor-friendly Realtor. Long story short, we had just enough time to add a chapter on Colorado Springs to this book to highlight some of the differences. If you’re interested in the Springs market, make sure you keep an eye on our podcast and email list as Jenny and I will be doing a deep dive into the market!
This module covers:
- What’s the best location in Colorado Springs?
- Central and southeast Colorado Springs
- Westside and downtown
- Northern Colorado Springs
- Colorado Springs house hack example
YouTube Video: UHHG – Overview
Podcast: Play in new window | Download | Embed
