2-4 Units in Denver Advice
Hey All! I’m new to BiggerPockets but this seems to be exactly the resource I’m looking for. Looking forward to learning from you!
I’m currently in Austin but will be moving to Denver end of June for work. My goal is to buy a property before the end of the year. I’ve been toying with a couple of different ideas based on books I’ve read / research I’ve done. I was hoping to run my thoughts by more experienced eyes with hopes I can get feedback / better direction.
I’m looking for a Residential Multi-Family (2-4 Units) in Denver, the closer to downtown the better. I plan on living in one unit with my girlfriend for the first year or two and then renting out the others. Because I’m not there yet physically, I’ve been resorting to Redfin/Zillow to try and get a sense of where these sort of properties are and what they sell for. Are there typically these sort of properties available regularly or are they more scarce? I plan on doing more off-market prospecting once I’m there, but I’ve found Redfin/Zillow to be decent resources…does anyone have a preferred technique to be able to find these sorts of properties?
From my initial research, it would appear that while deals are out there in Denver, finding high cash flow properties is going to be harder and require digging deep / networking which I don’t mind doing. I understand that a property has to cash flow positively, especially as a newbie. But for me, I figure that with 2-4 units, that will be a quicker way to build equity to then refinance to buy other units in two years or so where then I’d be much more familiar with the area and be better at finding good deals. Is it bad to care more about building actual equity over the next two years than caring about finding the most cash flow? Because where my head is at, I’ve been paying way to much in rent over the last 10 years without owning anything so if I can find a 3 or 4 unit that’s not negative cash flowing and have tenants that are helping with equity build, then I’m in a much better spot than current. Any red flags with that thinking?
And lastly, I was thinking FHA loan for this where they have maximum loan amounts for the type of property you want. The pros: 3.5% down, seemingly easier to get. The cons: MPI, takes longer to close which can be important if I do find a good deal that I'm competing for with cash offers. The alternative for me is a conventional loan, but particularly for 3 or 4 units in Denver, I'm then approaching down payment size that's probably a bit outside my budget. Any thoughts based on what I've described what would be a better financing route?
Know that is a lot of general topics where each could be discussed in depth that also depend on specific numbers a ton, but those are my general thoughts as of now. Any people who can weigh in, I’d really appreciate it. Or if you know of anyone who can help, I am very serious about buying before the end of the year so would love to chat further.
Thanks!
Anthony