Fell in love with Ridgway, CO; Where/how to invest to live there?

9 Replies

Hi All,

While on vacation in Ridgway, Colorado from our day-jobs in the energy industry and our real estate investing in Houston, TX, my wife and I fell in love with the area. We absolutely love the size and coziness of Ridgway and would love to live there.

Living there would mean leaving our careers and fully embracing real estate because I don't see any other alternative. 

Let's run a thought exercise and see how we can do this:

What can I invest in and where can I invest in so as to live in the Ridgway, CO area? 

I can't really tell that the economy is based on anything other than summer tourism and thus AirBnB rentals would be difficult. 

Is there a great rental market nearby? 

Where I live in Houston, I believe the market is currently too dangerous to enter flips as it may go down soon but rentals are okay. What's the market like in CO?

Denver seems to be in a bubble. 

Any input would be helpful! Especially if from @Joshua Dorkin

Thanks!

@Tim Shin   Hey Tim  I just purchased my second Montrose rental.  The Market is tight, with low inventory. I grew up in rural Colorado (Estes Park) and lived there for 50+ years, and we plan to retire in Montrose.  Its not the same as the big city.  Jobs pay less and are labor based.  Tourism, Retirement, and new construction (some times) as well as farming are the mainstays.  The pot laws have brought lots of new people into colo thus short supply on housing.    Ridgeway is the place where people working in Telluride, Silverton and Ouray live. Rural Colorado does not sport large rent returns.  Its tough right now to find any thing that's fits the 1% rule on purchase. In fact in the last 10 years i've only hit 2.  Housing in Montrose is really tight.  I filled my duplex there 3 days after purchase.  The hold up was us cleaning the unit.  I still am not hitting 1% because purchase prices are so high.  I went a year and a half without finding any deals then fell into 2.  Now who knows when i'll hit again??  and I know the state pretty well, and look in lots of towns.  Collins and the front range are on fire right now, rural Colorado while slower housing is still in short supply.  The duplex I bought in Montrose rent for $650-750 per unit.  That's all you can get because single familys  start at 8-850 a month. (And cost starting at 125K for anything less than 50 years old)  $1100-1200 is pretty big rent in Montrose because of wages.  The same units in Pueblo I rent for 550-600 and cost $20K less.  They are all about the same age.  Same thing most income in Pueblo is a lot lower.  no big industry etc.  Agriculture just doesn't pay as well.  We used to say about living in Colorado "The mountains are beautiful but you can't eat them".  I guess what I am saying is when you switch to the slower more peaceful life style found in any rural community you will pay a price.  That price is lower wages, and a lot more labor intensive jobs.  The real money people in those environment's is the business owners, and those executives working for big business  (Safeway store mangers, manager at home depot etc. etc.).  That's the way it Rolls in western Colorado as I see it!!  RR             

@Tim Shin

I lived in Colorado Springs for a few years and never made it out to Western Colorado. It sounds like it is worth a trip next time I'm in the state. 

We now live overseas. We had a couple buy-and-hold rentals in Colorado Springs. We sold them about three years ago and started buying in Pueblo. We have 17 properties and 23 units there now. It has been a good place to learn and make mistakes with smaller amounts of money. We are very happy with our portfolio and the community. We hope to enter a second market back in Ohio this year, just to diversify. 

I think you are right about Denver. I don't think it can keep going up forever. Even Colorado Springs has become a bit expensive for cash-flow rentals. You can find cash-flowing rentals in Pueblo, but you need to do a bit of research. Just because something is cheap, doesn't mean it will make money. I have a great property manager I can recommend and a group of contractors I like. PM me if you have specific questions.

Mike

Promotion
Ashcroft Capital
A national multifamily investment firm
Three Reasons Investors May Prefer Real Estate
Read three reasons why investing in real estate private placements may provide several advantages.
Read More Here
Originally posted by @Michael Wentzel :

@Tim Shin

I lived in Colorado Springs for a few years and never made it out to Western Colorado. It sounds like it is worth a trip next time I'm in the state. 

We now live overseas. We had a couple buy-and-hold rentals in Colorado Springs. We sold them about three years ago and started buying in Pueblo. We have 17 properties and 23 units there now. It has been a good place to learn and make mistakes with smaller amounts of money. We are very happy with our portfolio and the community. We hope to enter a second market back in Ohio this year, just to diversify. 

I think you are right about Denver. I don't think it can keep going up forever. Even Colorado Springs has become a bit expensive for cash-flow rentals. You can find cash-flowing rentals in Pueblo, but you need to do a bit of research. Just because something is cheap, doesn't mean it will make money. I have a great property manager I can recommend and a group of contractors I like. PM me if you have specific questions.

Mike

 Overseas, cool! Thanks Ralph and Mike for the responses. How quickly did you get 23 units? Were they all pocket listings like Ralph? 

Does anyone else have any thoughts on Durango, Montrose or Grand Junction? Is Pueblo nearby?

@Tim Shin I am a firm believer in investing where you life. If you live in Ridgeway, your market is anything within a 20-30 min drive. No sure how many people live in that circle but you might need to increase your radius if there is not enough population to support a real estate investment business. I would not go further away unless it was an area I knew very well.

@Tim Shin

We have done 17 properties over the last three years. We are big fans of the BRRRR strategy.

Most of the listings were on the MLS. A few have come through wholesalers and a couple properties were brought to me by Realtors.

Pueblo is not nearby. I just took a quick look at the map and there doesn't seem to be much nearby if you'll be living in the mountains of western Colorado. I believe the vast majority of Colorado's population lives on the "front range", straight down the I-25 Interstate.

Mike

@Tim Shin  @Michael Wentzel yes ridgeway is out in the sticks as is most everything west of the I25 corridor between the springs and Collins. That's what I was trying to say in my first post. Excluding Montrose and grand junction the rest is all small towns where the residents all grew up in the area. Very hard to get established unless you buy a buissness or get something in a tourist / ski area. In those small places like that you either fit in or not. If not you don't last long.  RR

Tim,

I bought my first rental in western CO two years ago. It doesn't fit the usual mold as it includes some acreage for growing hay and grazing cattle. It is not quite cash flow positive, but with rent, hay, grazing, appreciation and principal paydown, it is profitable. Buying land for hay/cattle alone won't pay. This property has a manufactured home on it and it has been rented continuously. The Ridgeway area is nice, but consider the entire western corridor from Grand Junction south. Delta, then east to Hotchkiss, Cedaredge, Paonia and Crawford. My place is in Crawford and I love it here because it sits at about 6500' elevation, so the summers are much milder than Delta, Montrose etc. This also makes Crawford more desirable than some of the surrounding towns, there is a shortage of rentals here. There is also much less traffic in and around these towns east of Delta, so it has that real country feel to it. Views of Grand Mesa and the West Elk mountains are everywhere out here. 

These are mostly farming communities except that they are being discovered by telecomuters, retirees etc. Prices have gone up, but you can find lower cost properties that would work as a rental. Buying an empty lot and setting up a used manufactured home on it might be a good strategy. I recently looked at a few of these opportunities but passed for personal reasons. 

There are still opportunities to buy acreage and subdivide into mini ranches. 

Send me a PM if you want to talk about this area.

The west slope of CO is a real jewel and is a great place to live, if you can make a living. (I trade the financial markets when not irrigating, mending fences etc).

Originally posted by @Clifford Begnaud :

Tim,

I bought my first rental in western CO two years ago. It doesn't fit the usual mold as it includes some acreage for growing hay and grazing cattle. It is not quite cash flow positive, but with rent, hay, grazing, appreciation and principal paydown, it is profitable. Buying land for hay/cattle alone won't pay. This property has a manufactured home on it and it has been rented continuously. The Ridgeway area is nice, but consider the entire western corridor from Grand Junction south. Delta, then east to Hotchkiss, Cedaredge, Paonia and Crawford. My place is in Crawford and I love it here because it sits at about 6500' elevation, so the summers are much milder than Delta, Montrose etc. This also makes Crawford more desirable than some of the surrounding towns, there is a shortage of rentals here. There is also much less traffic in and around these towns east of Delta, so it has that real country feel to it. Views of Grand Mesa and the West Elk mountains are everywhere out here. 

These are mostly farming communities except that they are being discovered by telecomuters, retirees etc. Prices have gone up, but you can find lower cost properties that would work as a rental. Buying an empty lot and setting up a used manufactured home on it might be a good strategy. I recently looked at a few of these opportunities but passed for personal reasons. 

There are still opportunities to buy acreage and subdivide into mini ranches. 

Send me a PM if you want to talk about this area.

The west slope of CO is a real jewel and is a great place to live, if you can make a living. (I trade the financial markets when not irrigating, mending fences etc).

 Thanks for the tips, Clifford. I'd love to chat with you about this in PM. What do you mean by used manufactured home? Like a mobile home? I've not been north of Montrose yet and it sounds like Crawford is a beautiful town we'll have to visit. We probably have to enter this market from far-way for the time being!

Originally posted by @Tim Shin :
Originally posted by @Clifford Begnaud:

Tim,

I bought my first rental in western CO two years ago. It doesn't fit the usual mold as it includes some acreage for growing hay and grazing cattle. It is not quite cash flow positive, but with rent, hay, grazing, appreciation and principal paydown, it is profitable. Buying land for hay/cattle alone won't pay. This property has a manufactured home on it and it has been rented continuously. The Ridgeway area is nice, but consider the entire western corridor from Grand Junction south. Delta, then east to Hotchkiss, Cedaredge, Paonia and Crawford. My place is in Crawford and I love it here because it sits at about 6500' elevation, so the summers are much milder than Delta, Montrose etc. This also makes Crawford more desirable than some of the surrounding towns, there is a shortage of rentals here. There is also much less traffic in and around these towns east of Delta, so it has that real country feel to it. Views of Grand Mesa and the West Elk mountains are everywhere out here. 

These are mostly farming communities except that they are being discovered by telecomuters, retirees etc. Prices have gone up, but you can find lower cost properties that would work as a rental. Buying an empty lot and setting up a used manufactured home on it might be a good strategy. I recently looked at a few of these opportunities but passed for personal reasons. 

There are still opportunities to buy acreage and subdivide into mini ranches. 

Send me a PM if you want to talk about this area.

The west slope of CO is a real jewel and is a great place to live, if you can make a living. (I trade the financial markets when not irrigating, mending fences etc).

 Thanks for the tips, Clifford. I'd love to chat with you about this in PM. What do you mean by used manufactured home? Like a mobile home? I've not been north of Montrose yet and it sounds like Crawford is a beautiful town we'll have to visit. We probably have to enter this market from far-way for the time being!

 Tim,

Mobile Homes built after June 1976 had to meet HUD standards and are called manufactured homes. Many are permanently mounted on foundations. They are not as desirable as a stick built house and lenders are a little more picky about lending money to buy them, often with a higher interest rate. If in good condition they can work well as a rental (most especially modern double wides).

Crawford is not much of a town. There are two restaurants, one gas station/convenience store, a couple of B&B's, a bank and a laundrymat. Crawford does have schools. There is also a state Park at Crawford Reservoir on the south edge of town. People do their shopping in nearby Hotchkiss and Delta. The real appeal is the surrounding area which is all farm and ranch land. Crawford is just north of Black Canyon of the Gunnison National Park but most people enter the park from the south side. Up on Fruitland mesa, the south side of Crawford, you find lots of mini ranches, which can be expensive, but all have incredible views. Joe Cocker made his home just outside of Crawford (north side near Needle Rock) on a few hundred acres of farm/ranchland. We looked at some acreage just across the street from his mansion, nice, would make a great homesite. Views are stunningly beautiful. See his mansion here: http://www.zillow.com/blog/joe-cocker-selling-ranc...

It's going on the auction block in Sept I think.

People are attracted to the area for the climate, views, proximity to Grand Mesa and the West Elk mountains and the relaxed pace of living offered in this type of community. Crawford has a totally different feel to it than Ridgeway. I have only passed through Ridgeway on the way to other places. To me it seems like a tourist town or gateway town. By that I mean a town at the access point to some busy recreation area or National Park. Those can be fun, at first... 

Many people in the Crawford area worked in the coal mines or for the railroad that services them. But the coal mines and railroad have been laying off people. Despite this, people still want to live in the Crawford area. Close to Crawford are wineries and Orchards growing Apricots, cherries, peaches, apples and more. My belly is swollen from all the fresh fruit I've been devouring lately :-). Delta county does not allow commercial pot growing operations, but you can grow hemp for medical marijuana. Someone recently offered to pay my neighbor $800/month to lease 10 acres for growing hemp. This and hay are the only viable crops to grow in the immediate Crawford area due to the higher elevation. For growing fruit and wine grapes you have to go a few miles away to a lower elevation. Not far, about 8 miles.

Personally, I would not attempt to invest here without getting to know the area first hand. This is a place to invest if you planned to eventually live here. I would not want to live in the actual town limits, but I would invest in a rental there. Visit the area some time. Look me up when you do.