Starting out in DENVER

I am hoping to find/invest in duplex/triplexes in the Denver area, with the intention of buying and holding. I have been watching the market for a while, and am getting a good feel for the area.

We are also looking for a home to live in but since we need at least 3-bedrooms (pref 4) and are picky about neighborhoods/schools, I can't seem to find a multiple-family home in the areas we want to live in for a reasonable price. So, we're considering buying a SFH just for ourselves, or getting a duplex that is nice but doesn't exactly cashflow - at least it will generate a bit of revenue which I guess is better than nothing.

After scouring the MLS listings and looking at quite a few places, I want to start making local contacts in the area for general networking purposes. And I'd love to get on the investors list for some local birddoggers/wholesalers!

Anyone in Denver want to meet a motivated, highly capitalized investor who's looking for deals? Here I am!

thanks to everyone for all the great info on this forum. I hope to contribute myself once I learn enough to do so!

thanks, Dave

Edited: 06/26/2010 at 09:53AM

Jon Holdman

Real Estate Investor · Denver, Colorado

11859 posts
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Icon_minipost Oct 01 '09, 12:14 AM

Hi Dave and welcome to both BiggerPockets and Denver.

I think you will be hard pressed to find a property anywhere in the Denver area that is both a good rental and an area where a "highly capitalized investor" would want to live. The better rental areas, that is, ones where the price to rent ratio works (more or less), tend to be not the nicest areas. Duplex/triplex/quads tend to be smaller. Often under 1000 sq.ft. per unit, and often just one or two bedrooms per unit.

The Denver market has gotten quite competitive. Lots of competition in the price ranges where rentals make sense. So, finding a good deal is very tough.

I do get mails from a number of local wholesales. Send me a colleague request and I can pass some of those along. Even then, good deals are few and far between.

Edited: 06/26/2010 at 09:53AM

Jon Holdman, Flying Phoenix LLC

Dave Hecker

5 posts
28 Influence

Icon_minipost Oct 01 '09, 12:21 AM

Hello and thank you for your reply.

Indeed it's been tough! I am seeing some pretty interesting multi-fam investments in some areas that look good for investing but not our choice to live in. So, the only thing holding me back is that we need a place to live!

I started looking at SFH's in Congress Park, Cap Hill, and Baker and we like them very much. Not exactly great investments, but hey we need a home!

I'm also seeing some nice duplexes in Edgewater, Lakewood that seem like good investments and I'm starting to be very familiar with that area - some decent opportunities I think.

But an investment property that we can also live in? Very tough! We are currently renting in a triplex in Congress Park and we really love living there. It's for sale at 380k and would bring in about $2600/month from the 3 units, although we're living in the best unit so really it would bring in $1200/month if we stayed there. Not exactly a cashflow situation! But then again, if we moved into a SFH for around 300k, we're not any better off in the long run.

A very tricky situation!

Edited: 06/26/2010 at 09:53AM

Jon Holdman

Real Estate Investor · Denver, Colorado

11859 posts
75537 Influence
15 Awards

Icon_minipost Oct 01 '09, 12:33 AM

A rental that costs $380K and brings in $2600 a month in gross rents is a horrible investment. But that's typical for those areas. I don't know why anyone would buy such a property for an investment, but it's clearly not to make any money. Perhaps as a speculative bet on future appreciation.

Lakewood and Edgewater are better than those areas, but still awful for finding rentals. Once in a while I run across something that gets on the edge of being "not awful", but that's about as good as it gets.

For a unit that rents for $600 a month, the most I'd pay, even with self management, would be around $40K. That's just about impossible anywhere here. If you get up in the $1000-1100 rent range, you can find SFRs that do work fairly well. Not on the west side, though. You need to be all in on a property like that for $80-90K.

I see lots of fourplexes in Lakewood/Edgewater/Wheat Ridge advertised in the $300-400K range. Typically 1/1's, sometimes 2/1's. Those are going to rent for $500-600 for the 1/1's, $600-700 for the 2/1s. Awful, just awful.

Edited: 06/26/2010 at 09:53AM

Jon Holdman, Flying Phoenix LLC

Dave Hecker

5 posts
28 Influence

Icon_minipost Oct 01 '09, 12:39 AM

Definitely our rental is not a great investment, but I wonder if it's preferable to buying a SFH house for around 300k without any rental income at all. For our home, we're unlikely to find a place that is a decent investment AND we like living there. So I'm just trying to figure out whether it should be a SFH or an unprofitable income property that we call home :)

Edited: 06/26/2010 at 09:53AM

Jon Holdman

Real Estate Investor · Denver, Colorado

11859 posts
75537 Influence
15 Awards

Icon_minipost Oct 01 '09, 12:45 AM

I would NOT want to live next door to my tenants. Not that they're bad people or anything (they're not), I just don't want to live next to them.

A residence is not an investment. Its a doodad. An expensive, depreciation doodad that only gains value slowing and requires you pump money into it to maintain it. I keep that separate from any investments.

Live where you want and where you can afford. Buy rentals where they make sense as rentals. Keep them separate.

Edited: 06/26/2010 at 09:53AM

Jon Holdman, Flying Phoenix LLC

Dave Hecker

5 posts
28 Influence

Icon_minipost Oct 01 '09, 01:03 AM

I understand your point and it's well taken. But, to our surprise, we really like living in this particular property (it's a very unique property for our area and SFH's here are ridiculously expensive) and would consider it.

After looking at quite a few SFH's in the area, we keep noting how much we like the property that we're in right now (as far as general comfort, location, style, etc.). We talked about converting it back to a SFH (which is obviously was at one point) but it s so big that there is really no need for that.

Edited: 06/26/2010 at 09:53AM

Alan Brymer

Real Estate Investor · Provo, Utah

90 posts
268 Influence
3 Awards

Icon_minipost Oct 12 '09, 09:24 AM

If you want to find local contacts, go to your local REIA. Google "Rob Swanson" and find his in or near Denver (I forget its name), but it's supposed to be really good. They can give you the lowdown on neighborhoods, etc. Paul Wells is also another teacher and active investor in the Denver area, so you might want to meet him.

Edited: 06/26/2010 at 10:02AM by Alan Brymer