What's Your Buy Box in Expensive Markets?

Question

Hello Denver! (and similar "expensive" markets) I'm an agent/investor, I run numbers A LOT for myself and clients for 2-4 unit properties in the Denver Metro area and I rarely find anything that breaks even from a cash flow basis. For you investors and agents helping investors who are buying in Denver and similar markets where positive cash flow is hard to find, what are the factors that make a good enough deal for you to go for it? Is it equity plays? break even or negative cash flow that will be better if you refinance at lower rate? 1031's? stashing cash for tax purposes? I'm trying to educate myself and my buyers how people are winning in this current market and would love some insight from others! Thanks in advance!

Ricardo Hidalgo · Answer

I am for equity plays or try to build something to increase my cashflow position. I live on 30A which is a huge equity market and typically break even or go negative on cashflow. We typically experience 10-12% appreciation a year with an average price point of 2.5 million!

Ed Ibañez · Answer

Hey Ryan,

I am an investor agent as well. I work with similar cliental. I take a different approach with my investor clients, we look at zoning. I am a zoning expert and have rezoned hundreds of properties and I work with clients in rezoning to add units or just navigate the zoning/zoning code. My other clients take the approach of negative cash flow to refinance to a lower rate.