Triplex Opportunity in Denver Market — Seller Needs Fast 1031 Exit

[Carlos Mendigochea]

Looking for feedback on a Triplex deal in the Denver/Aurora market.

Seller needs to complete a 1031 exchange quickly, and I can close within the required 17-day window. Property is a 1971 build but has had major capital improvements completed in the last 12 months:

• New metal roof
• New sewer lines (cast iron replaced)
• Full plumbing replacement to PVC
• New water heaters
• Mini splits in all units

Current layout: Units 1100 sq feet

• Two 2bd/2ba units with unfinished basements
• One 3bd/2ba with finished basement

Business plan:
Finish the basements and convert all units to 3bd/2ba. Approx 50k for conversion of both basements.

Current rents are below market:

• 2/2 units rented at ~$1,700 (market appears ~$1,900–$2,100)
• 3/2 rented at ~$1,800 (market appears ~$2,100–$2,400)

Current gross rents: $5,215/month

Deal details:

• Purchase price: $795,000
• 25% down / loan amount: $596,250
• Interest rate: 6.3%
• P&I: ~$3,691/month

Comparable triplexes in same area sold between $900K–$1.1M over last 24 months, with another currently listed at $1.025M.

Near-term strategy:
Raise rents conservatively to:

• $2,000 / $2,000 / $2,200
• Total projected rent: $6,200/month

Projected metrics:

• NOI: ~$48,540
• Cap rate: ~6.1%
• DSCR: 1.10x
• Cash flow: ~$354/month
• CoC return: ~1.8% on ~$232K invested

Main questions:

1. Would you move forward with this in today’s Denver market?
2. Is the appreciation + forced equity upside enough despite weaker initial cash flow?
3. Any concerns with Aurora specifically heading into the next few years?

Appreciate any feedback from folks active in Denver multifamily.