Deal Analysis – House Hack in Denver for Under $200K

Our client was looking to start a rental portfolio and wanted to take advantage of the house hack strategy.  He wanted a place under $200k to start, preferably in the Denver metro area.

He applied for the Colorado Fair Housing Act (CHFA) Down Payment Assistance (DPA) program to realize his dream of home ownership in Denver. Keep reading for details on this program and links to find out more.

This property closed Q4 – 2020.

Investor Profile

• First time buyer
• Wanting to try the house hack/Nomad™ method
• Looking for property under $200k to start his rental portfolio

Deal Quadrant: MLS

Read about the deal quadrant and finding Denver Investment Properties.

Investment Property Details

• Type: Condo
• 2 bedroom, 1 bathroom
• Location: East Denver/Virginia Vale
• List Price: $169,000
• Purchase Price: $169,000
• Why we liked it:
  • Good area
  • Has great rental potential once client moves out
  • Good HOA

Property Contract Details

• Finding the property: We looked at similar condo units at this price point across the metro. Our team knows this complex well and our buyer felt that this unit had the best location and layout for the price.
• Under contract:  At list price
• Inspection Concerns:
  • Able to receive the inspection report from when the property was under contract prior to us
  • Re-examined HVAC to determine if any issues = None
• Inspection negotiation outcome:
  • None

Property Financing Details

• Lender: FHA
• Loan Type: FHA 30 year with Colorado Fair Housing Act (CHFA) Down Payment Assistance (DPA)
• Appraisal: at value, no issues.
• Seller Concessions: 0
• PMI: Monthly
• Interest Rate Buy Down?: No

Spreadsheet Rental Analysis

Property Operating Expenses

First Year Returns

Conclusion

This condo house hack was a very good deal that fit our client’s needs and wants.  Our client will likely add washer/dryer hook ups and machines for about $2,500 before he moves out to achieve the highest rental rates to rent room by room.

While living there, he will be renting the other room and only paying about $500 a month to live, cutting his monthly payment in half. He will save the other half to pay back the Down Payment Assistance, so he can convert the unit to a rental in 18 months when he buys his next place.

This deal shows that it is possible to get into this market without a lot of cash!

To see more house hack deal analyses like this one, check out our other house hack Deal Analyses.

Colorado Fair Housing Act Down Payment Assistance Program

For more information on the Colorado Fair Housing Act (CHFA) Down Payment Assistance (DPA) and to find a list of approved lenders, visit the Colorado Fair Housing Act website.

You can also view a video showing how to get a CFHA loan.

YouTube Video: Deal Analysis – Denver House Hack for Under $200k