Wanting to hear from someone in the Colorado market

[Jason Switherspoon]

Is anyone a fairly new investor (3 or less properties) in the Colorado market? I am wondering if anyone new to the game has been able to land cash flowing properties of 8% or more anywhere near Denver.

[Bill S.]

@Jason Switherspoon so people are doing it but ... the devil's in the details. For example, it is not clear what you mean by "cash flowing properties of 8% or more". Are you speaking of an IRR of 8% with positive cash flow or 8% cash on cash return or some other metric? It almost sounds like a loaded question. You need to provide us with some specifics and we can speak to those items.

[Jason Switherspoon]

@Bill S. - Cash on cash in this case. 

[Bill S.]

@Jason Switherspoon Not likely to happen with any kind of consistency and very unlikely off the MLS for 2-4 unit properties. Denver is not a cash flow market. Cash on cash return is a metric for cash flow markets. Some of the multifamily agents push properties with that kind of number but it is the proforma number and I rarely agree with the assumptions used in the proformas. In addition, the larger MF properties require a lot more cash (>$500,000) to get that kind of return. People can and do find them that would meet your criteria but it's not often. If you find one make sure you go over the numbers very carefully.

[Matt M.]

I just picked up a rental in Denver that should be about a 15% COC return. I'm using the BRRR method to refi back out my cash that bumps up the return. It is an off market SFR in Littleton. I did the same last year on a townhome. I'm not a new investor; I've been in the market for over 10 years now.

[Jason Switherspoon]

Cool thanks for the replies. @Matt M. Are you saying the 15% coc is after the refi stage of your BRRRR?

[Bill S.]

@Jason Switherspoon and others. Read between the lines. A seasoned investor takes down one deal a year (off-market) at 15% COC in our market. I would say that is very representative of our market.

[Matt M.]

Originally posted by @Jason Switherspoon:

Cool thanks for the replies. @Matt M. Are you saying the 15% coc is after the refi stage of your BRRRR?

Absolutely. I'm paying 14% APR right now(but no points on the deal).

I almost had another one, but got beat out by zillow.....