Interested to hear your ideas... What are your thoughts on 1 bed/1 bath condos? I have found a deal that I believe is a slam dunk but the single bed/bath makes me a bit hesitant because it's not something I've really ever considered/thought about. The consensus from non-real estate folks is that 1/1s are bad investments; so I want to hear from Real real estate folks. Before you give your thoughts, let me share a little about it.
I have worked the deal down to a little less than 100k from an absentee owner who wants out. On a conservative side, I believe it could rent (without any updating) for anywhere between 900-1000/month (Current resident who has been in unit for 3 years has paid 950 without an increase). Comparable 1 bed/1 bath in this area can get very pricey and other units in complex have been selling lately for 120-150k. Now to the intangibles. First, location, location, location. Second, this condo is less than a block from two light rail stations making commute in and out of Denver super easy. And finally, in living in the this same community, i have recently learned that an empty lot across the street from the condo is becoming a 5-star hotel equipped with multiple restaurants. Of course, I wouldn't be doing justice if I didn't give negatives. First, the condo is a little 'grimey' and would need a paint job, carpet, and a cleaning (not in that order). Second, it's a 1 bed/1 bath so obviously that limits the pool of renters. And finally, the HOA is 140 a month.
I really appreciate everyone's time and look forward to your thoughts.
I see your hesitation, I think that in this strong rental market we are experiencing in Denver right now it would make this an ok deal, in a softer rental market this would probably suck to own. 1/1 is going to have more turnover than a 2 bed, more turnovers ultimatey equals less profit. Location sounds great, but I don't think it is enough to make the deal.
Is the HOA strong? Not sure how you would finance but I think there are better deals if you are getting good direct marketing leads.
@Josh Macdonald IMO condos rise and fall on the HOA and management. Personally I have no problem with 1/1. You have to realize this, they are the bottom of the market. Only studios are cheaper. The one thing for me that makes or breaks a 1 bed property is the washer and dryer situation. If it has a washer and dryer in the unit I think it greatly reduces turnover. They work great for singles wanting their own space or couples wanting to save money or who are just starting out.
To me your price seems on a bit on the high side but I'm not super active in the DTC market so if you are sure about the price then you should stick by your number.
See if you can pull the HOA budget, minutes etc and read up on them. Make sure there are NO surprises coming up. I would be ok with a 1/1 at that price, but it depends on condition. If anything, you could buy it and put it back on the market after a little clean up. Let me know if you want me to pull some quick comps on it.
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