Category Archives: House Hacking

Fort Collins House Hacking Duplex

8 Tips for House Hacking in Fort Collins

If you’re interested in house hacking in Fort Collins, here are 8 tips that will help you on your journey toward financial independence based on a recent class James taught where he covered the 9 nastiest mistakes investors make when buying in Northern Colorado.

1. Analyze Your House Hack

When you’re house hacking, you’re not looking for a real estate broker to sell you on how pretty the kitchens and bathrooms are or how the color of the carpet is still in style.

Instead, you want a real estate broker that understands the numbers for analyzing house hacking deals.

And, if you don’t have your own amazing… and mathematically correct… deal analysis spreadsheet you want a real estate broker that can provide you with one that is designed for house hackers. The spreadsheet and teach classes on how to use was designed specifically for buy-and-hold real estate investors, house hackers and Nomads™ so you can be sure it will work for you.

The World's Greatest Real Estate Deal Analysis Spreadsheet™

The World’s Greatest Real Estate Deal Analysis Spreadsheet™

That means avoiding nasty deals that will sink your investing goals with unacceptable levels of negative cash flow and focusing on only the best deals that will have you achieving financial independence safer and sooner than you imagined.

2. Know and Follow U+2 Rules

It is not about maximizing bedrooms to maximize rent when house hacking. That’s especially true with Fort Collins and the U+2 law that prevents you from having 3 or more roommates.

City of Fort Collins Extra Occupancy Rental Zoning

City of Fort Collins Extra Occupancy Rental Zoning

Maybe you’re thinking that’s why you’ll focus on duplexes, triplexes or fourplexes. But, as you begin your property search you’re wondering: where are all the duplexes, triplexes and fourplexes? And, when you do find them, why are the numbers so wacky? Or, the ones with good numbers… why is this in really rough condition or in the “sketchier” parts of town?

Yes, the devil is in the details… you need to find the right property to house hack.

3. Use The Right Financing

But finding the right property is just part of it. Then, you need to select the right financing. Are you saving up 25% (the typical amount required to buy a non-owner-occupant multi-family property like a duplex, triplex or four-plex)?

If that’s the case, you’re probably doing it all wrong as a house hacker. One of the benefits of house hacking is that you can use the much better owner-occupant financing… even for multi-family properties (up to and including 4 units) like 0% down VA or 3.5% down FHA financing.

Sure, the FHA loan has private mortgage insurance that doesn’t go away and the VA loan is limited to qualifying Veterans, but that’s what we cover in detail in our financing classes for real estate investors.

Monthly Payments Examples for Both Non-Owner-Occupant and Owner-Occupant Loans

Monthly Payments Examples for Both Non-Owner-Occupant and Owner-Occupant Loans

Plus, if you opt to buy a single family home where you’re going to rent out the bedrooms, there are nothing down loan options, 3% down conventional loan options and the most commonly used 5% down payment conventional loan option as well.

Plus, you’ll want to consider the pros and cons of choosing to pay monthly private mortgage insurance (PMI) or selecting two other, less known, options that will improve cash flow and make it easier to continue your investing beyond just this one property.

4. Search For The Right Types of Properties

Market conditions change. Sometimes we have lots of inventory to choose from and you get to be in the driver’s seat with selection. Other times, we have very limited inventory, and multiple offers on the most desirable and best-priced properties.

As house hacking real estate investors in Fort Collins you need to adjust to the market conditions to achieve your real estate goals while still holding firm to properties that make financial sense.

I created a special page with links to the most common ways that real estate investors (including house hackers) search for investment properties. Check out that page when you’re ready to start your search or reach out to us to have us setup an automatic email search for you based on your criteria.

5. Manage Your Properties Like a Professional

It is a common misconception that getting a discount when you buy is the most important thing. The discount you get really applies when you sell the property, but as buy-and-hold investors, house hackers and Nomads™ our holding period is often… forever.

The cost of selling a property is steep (although we have some solutions for that in the classes we teach). That’s why we try to avoid selling properties and, instead, focus on buying quality properties that we’d want to hold in our portfolio for a very, very long time.

That means that getting a discount is NOT the most important thing… managing your properties for cash flow is, arguably, one of the most important things.

Really, we’re in it for cash flow. So, minimizing expenses and maximizing income becomes incredibly important.

That means you need to become a pro at managing your properties, bookkeeping and accounting. It is a good thing we teach entire classes on screening tenants, managing properties (and separate classes on managing your property manager if you opt to go that route) as well as bookkeeping and accounting for real estate investors.

6. Protect Your Assets

Once you buy your first house hack property, you need to start playing defense and protecting your assets. What good would it be to acquire half a dozen rentals only to lose them all with a frivolous lawsuit?

After you’ve bought your first property and you’re ready to focus in on protecting yourself, check out the asset protection classes.

To get to true financial independence you need to protect and keep your assets safe and that’s what we’d like to help you focus on.

7. Repeat The Process For True Wealth Building

After you buy your first house hack… you got one down. Rarely will one property… even one that is paid off and no longer has a mortgage… be enough to support your desired standard of living when you reach financial independence.

That means you’re likely going to want to buy more than one property.

That’s what we specialize in.

Nomad™ Investing Model

Nomad™ Investing Model

Nomads™ are a special type of buy-and-hold real estate investor or house hacker that repeatedly invests in real estate serially. They buy one property a year until they acquire all the properties they need. Often, they do this strategy with little or no money down.

We have extensive training, tools and resources for Nomads™ if that sounds like you.

8. Keep Healthy Reserves

Similar to our discussion on asset protection, you need to make the unexpected… expected.

Listen, you know you’re going to have vacancy, maintenance, repairs, market cycles… plan for it now with great reserves.

Running hundreds of real estate investing models through our Real Estate Financial Planning™ software has shown me one thing for certain: reserves are the number one factor that gives someone holding power to live through life’s inevitable dips.

That’s why we use a special tool for analyzing house hacks that accounts for reserves as well.

Return On Investment Quadrant + Reserves with Numbers

Return On Investment Quadrant + Reserves with Numbers

Is Your Real Estate Broker Focused on Helping House Hackers?

Real estate brokers James and Tammy Orr focus on helping house hackers, buy and hold investors and Nomads™ buy and sell properties in Fort Collins, Loveland, Windsor and Greeley and surrounding areas.

James has been teaching real estate investor classes in Fort Collins since 2003 and has over 200 recorded real estate investing classes covering every topic house hackers need to know to be successful investing in our local market. Check out the real estate investing classes or listen to them on our real estate investing podcast.

When you’re ready to have a real estate broker team that specializes in what you’re looking to do, consider contacting James and Tammy Orr for a free consultation to see if it is a good fit.