Buy and Hold in Boulder

Minneapolis, MN · Member since 2016 · 48 posts · 9 votes

My fiance and I want to move to colorado in a year or so and I am wondering about student rentals in boulder. I know its a college town and I want to know what successes people have seen as well as not successes (not necessarily failures)

We (mostly just me) want to invest in small multi-families near colleges. What are some things to look out for when renting out to college students and what preparatory steps need to be taken to be well prepared for this market.

DISCLAIMER: We have not yet purchased any properties and I am brand new to BP. And looking to seek knowledge from all the great minds in this community!

Thanks

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Bill S.Pro Member

Moderator

Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes

10y

@Garry C. for the part timer to find deals now you need to be very focused. Pick a farm area and watch it like a hawk. Market to it. Drive for dollars in it. Meet people in it. Send letters on vacant properties in it. Even full time folks do this, they just do it for a larger area. I don't know the whole metro area but the five zip codes I mail to I know inside and out. Most times when someone calls I know what I would pay for the house after they give me the details. If we are close on price then I will meet them and look at it. In reality it's about perseverance. If you do the right actions long enough something will come to you. If you 10X your actions then they come faster.

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Kyle Scofield
Real Estate Investor · Madison, SD · Member since 2015 · 187 posts · 61 votes
10y
Welcome to BP Bryant Amundson I'd recommend starting with the ultimate beginners guide found here on the site! It provides an excellent foundation to someone just starting out, invest in your education first!! Good luck
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Alexander G.
Queensland · Member since 2015 · 14 posts · 2 votes
10y
Property prices in Boulder are damn high, and it appears that most multi-families close to campus are already owned by property management companies or independent investors. I'm assuming the time to get in for student rentals nearest campus would have been 10-15 years ago when prices really started to go up here.
I could very well be wrong and if so somebody please correct me.
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Bryant Amundson
OP
Minneapolis, MN · Member since 2016 · 48 posts · 9 votes
10y
Thanks @Kyle ScofieldI just downloaded it!
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Bryant Amundson
OP
Minneapolis, MN · Member since 2016 · 48 posts · 9 votes
10y
@Alexander G. How about single families in boulder. And also doesn't necessarily have to be right next to campus. I know I commuted 2 miles. Other friends commuted 3+
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Adam Kroll
Real Estate Agent · Boulder, CO · Member since 2014 · 87 posts · 24 votes
10y
Do you have an idea for what your return requirements are? Have you done any research into real estate in the area? There are several strategies that can work in Boulder, depending on your budget.
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Bryant Amundson
OP
Minneapolis, MN · Member since 2016 · 48 posts · 9 votes
10y
@Adam Kroll I actually have not done any research for boulder. I just wanted to hear about what's going down/been going down there for other people. I know I'm looking for $100-$200 per door per month.
As far as budget, regardless of what it is I am going to be doing heavy creative financing, thus why I am asking and trying to learn great creative techniques. But I just learned Boulder prices are pretty high... I was hoping sub 100K
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Adam Kroll
Real Estate Agent · Boulder, CO · Member since 2014 · 87 posts · 24 votes
10y
The only inventory in Boulder sub $100k is are pre-fab homes in pre-fab home parks. There is an affordable housing condo available at $175k and must be owner occupied with income restrictions. There are condos to be had in the $200k - $300k ask range in Boulder. The hard facts is that with the appreciation we've seen in Colorado, sub $100k properties are few and far between in the front range (they DO exist). Colorado has seen price appreciation of national high 14.5% last year and over 10% in 2014. Denver/Boulder areas are the most expensive metros not on a coast in the country. This does not mean there are not deals that will cashflow, but it does mean that it takes a bit more effort to find. Lets chat if you have any question - I'll PM you my contact information.
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Kevin Grinstead
Realtor · Denver, CO · Member since 2016 · 499 posts · 129 votes
10y
if you want to focus on rentals near colleges it would be better to look in Fort Collins or Greeley. Prices are much more affordable. SFR homes in boulder are also very high and hard to find. CSU and UNC would be the schools in that area. Let me know if you want additional assistance in Colorado. Prices here are continuing to rise and are estimated to increase about 7%.
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Adam Kroll
Real Estate Agent · Boulder, CO · Member since 2014 · 87 posts · 24 votes
10y
@kevin grinstead makes a great point about Ft. Collins for student housing. What makes it so attractive is their growth plan and there is more than just the school in Ft. Collins.
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Bryant Amundson
OP
Minneapolis, MN · Member since 2016 · 48 posts · 9 votes
10y
Sweet thanks guys. It is off in the distant future before we live there/invest there. But I just want to get to know the area a little better before hand.
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Patrick Soukup
Rental Property Investor · Fort Collins, CO · Member since 2015 · 273 posts · 127 votes
10y
@Adam Krolland@Kevin Grinsteaddefinitely have a great point. Greeley has some GREAT numbers, rents are high and prices to buy are raising, but still low. Fort Collins is getting pretty aggressive, but if you are creative, deals are still to be found.
Colorado in general is attracting people from all over. It is a beautiful place to live and invest.
Good luck!
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Frank Houpt
Carbondale, CO · Member since 2016 · 19 posts · 4 votes
10y
Hey Bryant, I'm looking at investing in the same area, around the same time. I agree with everyone, that Boulder prices are outrageous and it would be difficult to get started there. So I have been looking more closely at areas around it. Maybe check out Longmont and Fort Collins. I'd be interested in talking to you more about the area.
1 Reply
Kevin Grinstead
Realtor · Denver, CO · Member since 2016 · 499 posts · 129 votes
10y
Longmont is not bad and there are some places along I 36 that are in the 200's. Fort Collins and Greeley are the fastest growing cities in the country or they were last year.
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Adam Kroll
Real Estate Agent · Boulder, CO · Member since 2014 · 87 posts · 24 votes
10y
All of Boulder Valley has experienced significant appreciation over the past few years. Longmont is an interesting option as it has a "personality" that is quite different than the Boulder Valley towns (Boulder, Louisville, Superior, Lafayette). There are fix & flips being done there, so there is definitely some value disparity to be taken advantage of.
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Bryant Amundson
OP
Minneapolis, MN · Member since 2016 · 48 posts · 9 votes
10y
Interesting. Yeah with such a low budget/need for creative financing I'm going to look outside of Boulder, and maybe venture back when I have a little more capital. I just really like the idea of near campus housing.
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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
10y
Boulder is not a starter city. Prices and competition rival San Francisco and New York City. Fort Collins was just named the #2 least-vacant city in American, second only to the San Jose area.
I just sold a house to a client in Fort Collins and we had to offer significantly over asking. We were one of 9 offers on the property. It is extremely difficult to find anything under $200 and I would say next to impossible to find anything under $100.
@Mark Fergusonis our Greeley expert. I know the market is rising there, too but I think it's more affordable and easier to win a bid than anything in Boulder County.
Longmont is also no longer affordable. The lowest priced home currently is listed for $140 and it's a meth house. I'd check into Loveland or Wellington.
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Mark Ferguson
Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
10y
Originally posted by @Mindy Jensen:

Boulder is not a starter city. Prices and competition rival San Francisco and New York City. Fort Collins was just named the #2 least-vacant city in American, second only to the San Jose area.
I just sold a house to a client in Fort Collins and we had to offer significantly over asking. We were one of 9 offers on the property. It is extremely difficult to find anything under $200 and I would say next to impossible to find anything under $100.
@Mark Fergusonis our Greeley expert. I know the market is rising there, too but I think it's more affordable and easier to win a bid than anything in Boulder County.
Longmont is also no longer affordable. The lowest priced home currently is listed for $140 and it's a meth house. I'd check into Loveland or Wellington.
Greeley's median price is close to $250,000 now. There are some affordable homes based on other areas in Colorado, but nothing like four years ago. It is tough to find anything decent here for under $200k as well. There are a few properties, but they are few and far between.
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Bryant Amundson
OP
Minneapolis, MN · Member since 2016 · 48 posts · 9 votes
10y
Does all of that apply in Denver as well? Or is it more manageable since it is a large city with a wider range of properties?
0 Reply
Kevin Grinstead
Realtor · Denver, CO · Member since 2016 · 499 posts · 129 votes
10y
Denver has a few options available around 200's or a little less. Aurora also has some options. Boulder is high end and it is hard to find anything that is affordable. Properties in general are hard to find here so costs are rising.
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Adam Kroll
Real Estate Agent · Boulder, CO · Member since 2014 · 87 posts · 24 votes
10y
I wish i could give credit to this quote, because it is a great one: "some people seem to be at the right place at the right time all the time, but in reality, they are in the right place ALL of the time for when the time is right." There is inventory in the sub-$100k that would work as good rentals in Federal Heights (only one on MLS now, but I know a few coming on the market this spring). There are definitely sub-$200k properties to be found in and around Denver (currently just over 100 listings in MLS within 10 miles of LoDo).
1 Reply
Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
10y
IMHO you won't find anything in the areas you're talking about that will truly be cash flow positive. We're in an incredible seller's market right now. I put a rehab on the market on 1/15/16, have five offers all over list 48 hours later and closed on 2/18.
Boulder has never been a good place for buy and hold. At least no time recently (decades). They have very stringent controls on development and are much more tenant friendly than other location. $100K won't buy a tar paper shack in Boulder. Wouldn't even during the crash. I don't think you'll find anything in any of your areas under $100K. And very, very little under $250K.
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Dee M.
Developer · Lone Tree, CO · Member since 2013 · 52 posts · 15 votes
10y
I agree with Jon wholeheartedly, he speaks with knowledge and experience. We listed a property recently, it had over 60 showings in one day, it sold for almost 25k over list. I recently listed a flip/pop top we did in Denver, it sold for a seven figure number instantly. You are not even able to obtain condos for 100k currently. I tried to purchase one in Aurora last week for 13k over MLS list, didn't get it and they had 12 offers of which 7 were all cash and higher numbers. The banks have always called for highest and best on foreclosure resales, now the average person listing a property does, send your highest and best up front or you are simply out. A 250k listing in Barnum (Denver) about a week ago had close to 100 showings, I took a picture as I had never seem seen anything like it before. Good, bad, whatever, this is the Denver market today.
0 Reply
Dee M.
Developer · Lone Tree, CO · Member since 2013 · 52 posts · 15 votes
10y
If anyone would like to see what 200k plus buys you in metro/suburban Denver, here it is, a 1480 sq ft, very dilapidated looking (1922 build) that is in dire need of a complete rehab. Not something I purchased but under contract in Lakewood and listed for 203K
1 Reply
Ian Martin
Developer · Boston, MA · Member since 2016 · 76 posts · 31 votes
10y
@ Dee
@Dee M.I went and looked at that house on Clay Street when I was looking for my first property to buy. They wanted $240k when I looked at it I believe (it was months ago I can't remember). It needed a ton of work, had at least a few roll away dumpsters of garbage inside and around it as well. The tenants were telling me that the city was planning to put up new condos across the street, but after a lot of research I was unable to confirm that in any way. I do believe I remember the lot was zoned for commercial and residential use, however, and that the car dealership behind it was considering purchasing it and scraping it to add more room to their lot, but it seems that didn't go through. Its a tough market out here for sure, but there are certainly still deals to be had.
1 Reply
Garry C.
Rental Property Investor · Littleton, CO · Member since 2015 · 252 posts · 164 votes
10y
The other side of that equation is that you can buy 10 of those for the same price in Dayton. But no one wants that deal either. Yes, people keep saying that there are deals to be had in Denver, & I believe them. But unless you can look for them full time, you have to get really lucky. For those of us with a full time job that want to make some investments, where is the happy medium?
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