Real Estate Consultant · Denver, CO · Member since 2016 · 25 posts · 3 votes
Hi guys,
i'm a new member of BP and super excited start investing! I am moving to Denver from Baltimore at the beginning of June and i've talked to a few realtors about owning a property here.
I know this market is very very competitive and also expensive. I've started to look outside Denver/Boulder at the Westminster and Broomfield area. I found a single family home with 4 beds and 2.5 baths that would need a little bit of updating. I was thinking about using the BRRR method on this.
My question does anyone know about renting SF homes in Westminster/Broomfield area? I believe it would be worth the investment if i can hold the property and receive the cash flow while the value goes up. Any suggestions are more then welcome!
@Lashaw Salta have you run the analysis on the property in question? There are still cashflow properties in those areas, but it can vary greatly on what you're getting. You're on the right track with the higher bedroom count since it can give you additional ways to rent the place other than just a single lease if things get tight.
Feel free to send me your analysis numbers if you would like me to take a look. I've grown up and lived all around there so I'm pretty familiar.
@Lashaw Salta have you run the analysis on the property in question? There are still cashflow properties in those areas, but it can vary greatly on what you're getting. You're on the right track with the higher bedroom count since it can give you additional ways to rent the place other than just a single lease if things get tight.
Feel free to send me your analysis numbers if you would like me to take a look. I've grown up and lived all around there so I'm pretty familiar.
@Lashaw Salta - your post caught my attention because I live in this area. If you are buying off of the MLS the property likely doesn't work for the BRRRR strategy because it will be very difficult to add enough value via rehab to limit your money into the deal. For example - run the numbers doing a purchase and repair with a conventional purchase rather than with the refi.
Also the area is in demand just like the rest of the metro area and will be difficult to cash flow - it is difficult to get over about $2,000 a month in rent unless you are in a very nice property and area. run your numbers again for cashflow and make sure it works.
A lot of people that live in these areas commute to Boulder or Denver as it falls right between the two - this keeps the whole corridor in demand.
@Lashaw Salta Welcome! We currently invest in the areas you are speaking about. It is NUTS around here. Be certain the numbers works (it's not easy and I feel most everyone here has clued you in on that). Also, most investments are what you could describe as an "appreciation play". That type of investment works for me, but it it doesn't work for everyone especially just starting out when you might want to generate cash flow to pick up more properties.
What tip I can share... depending on your potential tenant... if you can get into a property that is in Legacy high school district in Broomfield, that is a very good start (I've had no problem renting out my properties in that area and for a reasonable premium). Westminster/Arvada has some decent pockets as well, but you really have to get to know the area.
I think the best question to ask is... why are you investing in real estate? What is your end game? Why in Denver and not elsewhere where you could leverage your money more, and cash flow to get to the next one? Just all thoughts:) I'm happy to talk to you about our experience anytime.
Hey @Lashaw Salta. Welcome to BP! And to Denver! Cool city, the mountains, 300 days of sun. I'm a total geek for Denver. You couldn't come to a better site if you're looking to invest, especially for the Denver metro market. This place is flooded with Denver area people who know any niche of the industry.
I think @Whitney Hutten asks a central question: What are your goals? As she said, if you're looking for big cash flow, Denver probably isn't going to cut it. You might look in the midwest.
But if you're moving here and are going to have to live somewhere anyway, what about house-hacking? You could take a few roommates and have them cover most or all of your mortgage. Depending on your price point, you could also look for a duplex. Or a home with a basement unit can work the same. You get a home, you get someone else paying a lot of your mortgage and it serves as landlord pre-school for when you want to expand to other properties. Just a thought.
I live in the area as well. It is near impossible to find a home to BRRR, plus I don't think you'd find a HM lender that will lend to you if you plan on being the owner occupant.
If you are comfortable with it, you might try renting by the room. Since you'll be new here, I recommend just renting first to see if you like the area.
thank you all of you guys for your positive response to my request. I have responded individually to some of you, but to the group my main goal is to pay down my student debt and eventually have the financial freedom to invest in real estate full time.
If i'm living in Denver, how would you guys recommend owning an out of state property (turn key) for cash flow? From what I've researched, it's very hard to find a good property management company. Is this something that i just need to make connection and research an area where i want to invest in. Also I've had some trouble with getting lenders to give me a good rate or trust me. Any recommendations for lenders in this area?
Thank you again for all your help, you guys are awesome!
@Jared Bouzek hello! I believe because I'm young and a new home buyer. I have a large student loan debt and have not been at my current full time job for more then a year. Would you have any tips on speaking with lenders to get better rates? I've learned on here that calling around to multiple places is a good way to go.
@Lashaw Salta - Welcome to BP and when you get here welcome to Denver too! Since you're now on BP, it should not be very hard to find a good property manager in an area that you wish to invest. I think what you've been reading might be better translated as "It is very important to find a good property manager, if you plan to do out of state turn-key investing."
Lashaw Salta It will be tough. But that's not unique. It's tough in the Bay Area, Austin, Denver, and every other market that has gone through extreme appreciation over the past 5 years. You're competing with people that are looking for a home instead of an investment. Competition increases prices which, in turn, makes it harder to pencil out investments. So there's a little bit of a speculative component in any "hot" market. You have to decide how comfortable you are with that. There isn't a right vs. wrong answer, just a matter of preference.
@Lashaw Salta Do you have a job lined up in Denver for when you get here?
Without knowing what rates you're hearing and the context of your situation, I wouldn't really know what "better rates" means to you. I would focus much more on finding a true professional who knows their guidelines and is going to give you the personal service you need. Just because a lender has better rates doesn't mean they won't have outrageous costs or put you through a terrible experience to buy your home. If you get 1/8 less in rate but your loan officer blows up your deals, was it worth it? Especially as somebody who has never been through the experience of buying a home, it would be valuable for you to have a loan officer who knows how to work with somebody in your situation. In other words, if I were in your shoes, I would shop for a loan officer rather than an interest rate. Just my two cents.
@Jared Bouzek thank you for the advice! I will continue to look around at different lenders and different types of ways to get lending. I will keep you all posted if i find anything else, i appreciate the insight from everyone!
@Jared Bouzek hello! I believe because I'm young and a new home buyer. I have a large student loan debt and have not been at my current full time job for more then a year. Would you have any tips on speaking with lenders to get better rates? I've learned on here that calling around to multiple places is a good way to go.
In the space you are in, high debt, short time on job, and short credit history, your chances of your "speaking with lenders to get better rates" stand little to no chance of moving the needle. Right now lending is a cook book. You put the numbers in and you get the numbers out. There is NO room for personal persuasion. Focus on the things you can control. The property and the people you work with. If you get the right pieces in place, then an 1/8 or a 1/4 either way will be of no consequence.