• Skip to main content

Denver Investment Real Estate

Helping Investors with Denver Residential Real Estate

  • Denver
    • Start Here
    • Deal Analyses
    • Market Updates
    • Denver Podcast
  • Springs
    • Start Here
    • Deal Analyses
    • Market Updates
    • Springs Podcast
  • Education
    • Free Toolkit
    • Podcasts
    • Getting Started Guides
    • Courses
    • Books
    • Events Calendar
    • Blog
  • Spreadsheets
    • Rental Property
    • House Hacking
    • BRRRR
    • Fix and Flip
    • Return on Equity (ROE)
  • Services
    • Rental Properties
    • House Hack
    • Sell
    • 1031 Exchanges
    • Investment Consultation
  • Portfolio Analysis
    • About Portfolio Analysis
    • Portfolio Consultation
  • About
    • About Us
    • Team
    • Our Process

Deal Analysis – A Dedicated House Hacker in Colorado Springs

April 28, 2021 • Jenny Bayless

This deal analysis profiles first time home buyer and investor Jeremy Babin.  He knew he wanted a property that would allow him to use the house hacking method to build wealth.  It took a few showings with our agent Leah to nail down exactly what he wanted, but now that he’s found it, he’s implementing his plan to an impressive degree.  

Three Learning Options!
  1. Listen to the podcast “#27: Deal Analysis – A Dedicated House Hacker in Colorado Springs” on the Colorado Springs 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 

  • First time real estate buyer and investor 
  • Wanted a property that would allow him to use the house hacking method

Long Term Real Estate Investing Goals 

  • $1500 a month cash flow by 2025

Strategy for Achieving Goals 

  • He will be using house hacking to purchase a second house hack in a couple of years.

Investment Property Details 

Deal Overview 

  • 4 bedroom 2 bathroom single family house 
  • Located in the Pinehurst area of Colorado Springs, close to the airport and new Amazon warehouse 
4 bedroom 2 bath house hack in Colorado Springs
4 bedroom 2 bath house hack in Colorado Springs near new Amazon warehouse and Airport
4 bedroom 2 bath single family rental near Airport and new Amazon warehouse

Appealing Features of the Property 

  • Great house hacking opportunity that allows Jeremy to maximize his rental income. 
  • The house features a large downstairs family room that Jeremy is partitioning off with drywall to create a separate sleeping area for himself.  This will allow him to rent out all 4 bedrooms.

Sourcing 

  • Denver MLS: the property fell out of contract, so we moved quickly and got a showing as soon as possible.

Property Contract Details 

Inspection Issues 

  • The inspection found that the radon was high.  We were able to negotiate a $1,500 seller concession initially, but during phase two negotiations, we amended this concession for a lower purchase price.

General Notes 

  • This property was listed for $300K and had previously fallen out of contract at the financing stage, so we were able to get the recent appraisal from the listing agent.  That appraisal came in at $311K, so that’s what we offered.  
  • When the appraisal was done the second time, it came in lower, at $307K.  We were able to renegotiate by removing the concession from the inspection in exchange for lowering the purchase price to the appraisal value.  
  • The lender exuded a lot of confidence, which reassured the seller and listing agent that there wouldn’t be a repeat of the previous failed contract.

Property Financing Details

Stabilization 

Plan vs Reality

  • Jeremy’s original plan for repairing the home was to spend about $5K installing a radon system, AC, and some light rehabbing.  
  • However, he also wants to push the room rents and force equity, so he’s now spending about $13K to fix up the vacant rooms by painting, adding flooring, and redoing the bathrooms.

Interesting Points 

  • Jeremy was able to immediately rent out two of the bedrooms to roommates from his previous living situation.  After fixing up the other two bedrooms, he was able to find renters for those rooms, as well.
  • He is self-managing the property and doesn’t have any HOA costs, so he’s estimating repairs and maintenance at 8%.  
  • His current monthly rental income is $2300, putting him at $300 a month positive cashflow after expenses.  

Spreadsheet Analysis 

Colorado Springs dedicated house hacker Deal Analysis spreadsheet

Notes regarding monthly rents: 2 tenants brought with him. $500 x 2. Fixing up master = $700. Rent 4th bedroom = $600

Property Operating Expenses 

Property Operating Expenses analysis spreadsheet Colorado Springs dedicated house hacker

First Year Returns 

First year returns analysis spreadsheet colorado springs dedicated house hacker

Immediate Goals and Plans for the Property

Continue rehabbing the home to push rents and force equity. 

Exit Strategy/Long Term Plan 

He’s going to continue to rehab the house little by little with the positive cash flow he’s getting from his rental income.  In the next couple of years, he plans on renting out the entire home as either a single family or rent by room setup.  He’s hoping to purchase another property he can similarly fix up and rent out using house hacking.  

Conclusion

Jeremy was able to implement his investing plan by looking at different properties and figuring out exactly what he wanted.  By fully committing to the house hacking method, he’s already cashflow positive and well on his way toward buying his next property.  There were some hiccups throughout the process, but by being flexible and organized, we were able to get our client started on his house hacking journey.  

If you are interested in investing in Colorado Springs, contact us to get you oriented and help create a strategy:  

Jenny Bayless: Jenny@EnvisionREA.com, 719-649-4478

Interested in checking out more Colorado Springs rental properties? Find more Colorado Springs Rental Property Analyses here.

YouTube Video: Property Analysis – A Dedicated House Hacker in Colorado Springs

Podcast (colorado-springs-real-estate-investing-podcast): Play in new window | Download (Duration: 24:09 — 27.6MB)

Subscribe: Google Podcasts | Stitcher | Email | TuneIn | RSS | More

About Jenny Bayless

Jenny is an investor and investor friendly agent. She owns a handful of rental properties in Colorado Springs. She has performed value add methodology such as BRRRR to optimize the performance of her portfolio while efficiently managing it.  She has experience in obtaining deals through MLS, wholesale, networking, FSBO; and has experience with multiple different finance sources such as conventional, hard money, and seller financing (both sides). 
(719) 649-4478 | Jenny@envisionrea.com | Read more about Jenny...

Real Estate Investment Consultation
Creating your real estate investing strategy and putting together your team can be a daunting task. Schedule your free Colorado real estate investment consultation to start creating your personalized plan.

Envision Advisors Logo
Copyright © 2022 · All Rights Reserved

Envision Advisors at Your Castle Real Estate · 2755 S. Locust St #243, Denver CO 80222

Return on Investment Quadrant™, True Cash Flow™ and Nomad™ are trademarks of Real Estate Financial Planner LLC and used with permission.

denverinvestmentrealestate logo

Disclaimer:This information is designed to provide accurate and authoritative information with regard to the subject matter covered. It is offered with the understanding that the presenters are not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert advice is required, the services of a competent professional should be sought.

Privacy Policy | Terms of Use | Disclaimer