New Member in Colorado looking to 1031 into multiple units

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New Member in Colorado looking to 1031 into multiple units

Jeff Betschart
Rental Property Investor · Parker, CO · Member since 2017 · 80 posts · 15 votes

My name is Jeff and I live in Parker Colorado. I have one Current Rental that we used to live in and am looking to 1031 exchange it and move the money into multiple properties in or out of state when the current lease is up June/July this year. Prices in Colorado are not very favorable right now to purchasing new rentals so I was looking at out of state markets perhaps Florida, Indianapolis or Tennesee? Not tied to these markets so any suggestions are more than welcome these are just the ones I have researched to date.

I also know I need a solid property management company.

I graduated from the University of Colorado a while ago and work in Aviation in the Denver area. I would like to get more involved in real estate to the point where I can get 10+ plus units to help supplement retirement some day.

I am looking to learn and open to any and all advice on next steps. 

The current plan is to 1031 my current property in June/July this year and take the equity and purchase multiple lower priced units probably out of state hopefully within the summer timeframe.  I am thinking about Turnkey units but I have a lot of questions about next steps.  I am more interested in Cash return at this point to help me build up my number of units. 

If there are any real estate investing groups in the or around the Parker Colorado area I would be interested to know about them. 

I have started talking to 1031 Agents, and Turnkey providers and plan to talk to as many people as I can before I sell this summer. 

Love to get advice on anything I have mentioned or what you might know I have forgotten to mention. 

Single Family

Multifamily, or Duplex +

1031 exchange tips

Finance for multiple purchases 

Turnkey recommendations

Property management company suggestions

Markets to look into

Regards
Jeff

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Phillip Bicker
Real Estate Broker · Larkspur, CO · Member since 2017 · 115 posts · 77 votes
8y

@Jeff Betschart

Welcome to BP and congrats on exploring your path to increasing your portfolio and doing what it takes reaching out to other BP members, 1031 Agents, Turnkeys, Realtors, investing groups before making the leap. 

A couple of quick suggestions - make sure to thoroughly vest and do your due diligence on any Turnkey companies you are considering. There are many here on BP with case studies and first hand experiences with these companies - if you are going out of state, consider flying out and make a weekend out of speaking to the companies, seeing some properties with them, and getting familiar with the market you are considering. You can do this without turnkey companies and there are many resources on BP about investing out of state (books, forums, podcasts). 

With that said, have you considered looking south in your own state? There are some pretty strong ROI's in Colorado Springs and you would have much more control and ability to vet your properties and teams living in the state. You can find MLS multi-unit deals for $80-100k per door with rents of $800-1,000 per unit. While this isn't your 2% rule, I think you will find this much stronger than anything possible in the Denver metro and much easier to manage than an out of state rental.

If you go even farther south, you might be able to find something in Pueblo for even less expensive, however, I am not certain of the market strength and growth - you would want to find a PM who has 100's of properties in the area to get the best feel for the market, where to look, and what type of rents and vacancies to expect.

At any rate, good luck with the sale of your current investment and finding where your money will be best utilized going forward and of course feel free to reach out if you have any questions!

3Reply
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  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    8y

    Welcome to the site @Jeff Betschart

    0Reply
  • Phillip Bicker
    Real Estate Broker · Larkspur, CO · Member since 2017 · 115 posts · 77 votes
    8y

    @Jeff Betschart

    Welcome to BP and congrats on exploring your path to increasing your portfolio and doing what it takes reaching out to other BP members, 1031 Agents, Turnkeys, Realtors, investing groups before making the leap. 

    A couple of quick suggestions - make sure to thoroughly vest and do your due diligence on any Turnkey companies you are considering. There are many here on BP with case studies and first hand experiences with these companies - if you are going out of state, consider flying out and make a weekend out of speaking to the companies, seeing some properties with them, and getting familiar with the market you are considering. You can do this without turnkey companies and there are many resources on BP about investing out of state (books, forums, podcasts). 

    With that said, have you considered looking south in your own state? There are some pretty strong ROI's in Colorado Springs and you would have much more control and ability to vet your properties and teams living in the state. You can find MLS multi-unit deals for $80-100k per door with rents of $800-1,000 per unit. While this isn't your 2% rule, I think you will find this much stronger than anything possible in the Denver metro and much easier to manage than an out of state rental.

    If you go even farther south, you might be able to find something in Pueblo for even less expensive, however, I am not certain of the market strength and growth - you would want to find a PM who has 100's of properties in the area to get the best feel for the market, where to look, and what type of rents and vacancies to expect.

    At any rate, good luck with the sale of your current investment and finding where your money will be best utilized going forward and of course feel free to reach out if you have any questions!

    3Reply
  • Kevin Grinstead
    Realtor · Denver, CO · Member since 2016 · 499 posts · 129 votes
    8y

    Hi Jeff, welcome to BP. Before you make imany solid plans, I would verify the rules for the 1031 exchange. If you identify your 1031 exchange company that would make the transaction smoother. 

    As for investing groups, there are several in Colorado. There are the DAREI, Creative Real estate group on Meetup, ICOR and there is a Self Directed IRA group as well as the Blue Spruce investing groups.

    There are also a few out there that could help you invest in a portfolio or maybe even an apartment complex. 

    Other opitons could be to buy commercial property locally or a few properties in Pueblo. 

    As for outside markets, Ohio seems like a nice place. They are in the process of building an Amazon fulfillment center up there that could skyrocket home values along with rents.  

    2Reply
  • Account Closed
    Real Estate Investor · Kansas City, MO · Member since 2015 · 222 posts · 121 votes
    8y

    Welcome to BP! I have helped many investors find properties when coming out of a 1031. Let me know if I can be of any assistance. I am familiar with Kansas City and Dayton markets.

    1Reply
  • Tom Ott
    Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    8y
    Originally posted by @Jeff Betschart:

    My name is Jeff and I live in Parker Colorado. I have one Current Rental that we used to live in and am looking to 1031 exchange it and move the money into multiple properties in or out of state when the current lease is up June/July this year. Prices in Colorado are not very favorable right now to purchasing new rentals so I was looking at out of state markets perhaps Florida, Indianapolis or Tennesee? Not tied to these markets so any suggestions are more than welcome these are just the ones I have researched to date.

    I also know I need a solid property management company.

    I graduated from the University of Colorado a while ago and work in Aviation in the Denver area. I would like to get more involved in real estate to the point where I can get 10+ plus units to help supplement retirement some day.

    I am looking to learn and open to any and all advice on next steps. 

    The current plan is to 1031 my current property in June/July this year and take the equity and purchase multiple lower priced units probably out of state hopefully within the summer timeframe.  I am thinking about Turnkey units but I have a lot of questions about next steps.  I am more interested in Cash return at this point to help me build up my number of units. 

    If there are any real estate investing groups in the or around the Parker Colorado area I would be interested to know about them. 

    I have started talking to 1031 Agents, and Turnkey providers and plan to talk to as many people as I can before I sell this summer. 

    Love to get advice on anything I have mentioned or what you might know I have forgotten to mention. 

    Single Family

    Multifamily, or Duplex +

    1031 exchange tips

    Finance for multiple purchases 

    Turnkey recommendations

    Property management company suggestions

    Markets to look into

    Regards
    Jeff

     Hello and welcome! Best of luck to you!

    1Reply
  • Ronnie Zuccaro
    San Diego, CA · Member since 2016 · 2 posts · 1 vote
    8y

    @Jeff Betschart welcome to BP. I’ve used similar approaches in the past and would be happy to share my experiences. Send me a message if you’d like to talk.

    1Reply
  • Bill S.Pro Member
    Moderator
    Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
    8y

    @Jeff Betschart welcome. Come out to the next meetup by @Anson Young and @Dan Mackin. You can find the posting of it here on Meetup.com. There are plenty of folks there and if you ask around there is probably someone who has done each of what you are considering.

    1Reply
  • Jeff Betschart
    OP
    Rental Property Investor · Parker, CO · Member since 2017 · 80 posts · 15 votes
    8y

    Thanks for all the quick responses and great suggestions. 

    I have talked and most likely identified a 1031 company in the Denver area that I plan to work with. 

    Phillip

    I would really like to see these case studies you talked about for Turnkey Companies. Ill look and see if I can find them or if you know where they are located please let me know. I would also like to talk more about the Co Springs area. 

    Kevin

    Thanks for the local group I will look into them too. I don't know anything about the commercial property but It sounds like I need to find out. 

    0Reply
  • Matt M.
    Realtor · Denver, CO · Member since 2013 · 2k+ posts · 1k+ votes
    8y

    We had a good experience with Tracy Wilson at ipx1031. He's here in town. 

    Depending on when you lived in the home and how long ago, you may not need to 1031. You can find opportunities here in town if you know where to look. 

    1Reply
  • Phillip Bicker
    Real Estate Broker · Larkspur, CO · Member since 2017 · 115 posts · 77 votes
    8y

    @Jeff Betschart

    Here are a few case studies but there are many: 

    https://www.biggerpockets.com/forums/92/topics/499...

    https://www.biggerpockets.com/forums/92/topics/361...

    https://www.biggerpockets.com/forums/517/topics/13...

    https://www.biggerpockets.com/forums/92/topics/491...

    https://www.biggerpockets.com/forums/92/topics/507...  

    Also check out @Jay Hinrichs site: turnkey-reviews.com. I do not know if he receives any benefits from any of the companies or has any ownership in any, so you might want to investigate that for yourself if there is any particular one that is highly recommended. 

    Hope this helps!

    0Reply
  • Colin SmithBusiness Member
    Realtor · Colorado Springs, CO · Member since 2013 · 987 posts · 447 votes
    8y

    @Jeff Betschart - I would agree with Phillip that you should consider C-Springs as a place to invest. Many of my clients I manage properties for are actually out of Parker as they too have found it too expensive to invest locally but can make the returns they would like down here while still being only a moderate distance from the property to drive to. If you're looking for better cash on cash / ROI, then skip the single families and small multi-families and go straight for the 4-plex. Depending on the amount of cash you're bringing out of the 1031, you may be even want to start considering small apartment complexes as they can bring more units per dollar to truly maximize return while minimizing expenses with fewer roofs, siding, grounds upkeep, etc. I would be happy to chat more about the Colorado Springs market anytime!

    2Reply
  • Phillip Bicker
    Real Estate Broker · Larkspur, CO · Member since 2017 · 115 posts · 77 votes
    8y

    @Colin Smith 

    Moving into the small apartment complexes would be a great play if there were some good properties available and if a lender were able to do a commercial loan with no previous multi-unit experience (and not many single family rentals). 

    Have you found any local lenders you'd recommend for commercial properties (5+ units) that have made an exception for buyers with a lack of previous experience as a landlord of a mult-unit or larger portfolio of single family homes? I know a couple of people that would fall into this category that would be interested...

    0Reply
  • Chris LopezPro Member
    Real Estate Agent · Denver, CO · Member since 2015 · 1k+ posts · 858 votes
    8y

    @Jeff Betschart When did you move out of your rental property? If it was your primary residence 2 of the last 5 years, you can exclude 250k (or 500k married) from capital gains. Then you get the money and don't have the 1031 time restrictions.

    Podcast Guest on Show How to Use Equity in Your Home to Reach Financial Freedom Faster
    0Reply
  • Jeff Betschart
    OP
    Rental Property Investor · Parker, CO · Member since 2017 · 80 posts · 15 votes
    8y

    Chris

    I have had the place rented since October 2012 so I don’t think that idea would work.

    Any other ideas or ways to go about this please throw them out?

    0Reply
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