Rental properties in Denver

22 Replies

Hi,

I am just getting started in the Denver area, looking to get a rental property..

I am having a hard time finding any duplex/triplex that have more cash flow than $100-200 (using the BP analyzer, assuming I am running the numbers right).

Is this a normal amount of cash flow for rentals in the Denver/Aurora area? Or should I look into another method (BRRRR, wholesale, etc)

Thanks!

Derek.

Buying rental properties in Denver is going to not have that good of cash flow. If you're looking for cash flow then I'd recommend looking out of state. 

@Derek Hutson If you're interested in multifamily and primarily motivated by cash flow, you might consider looking in Colorado Springs. I think you can still find a good mix of cash flow and appreciation there and it's still relatively close where you could drive by your properties once in a while.

I would think you could do a little better than $100-200/month in the Denver area, but it will probably will be harder to locate decent cash flow in Denver. You may want to check the assumptions you're using. 

@Derek Hutson Post a couple of deals that you've analyzed. You'll get a lot better feedback if you share those. Otherwise, it's really hard to provide you any useful insight.

The prices on multi families have really gone up a lot around Denver. Why multis? I ask because many people say that's what they want because the Internet has recommended it!

@Jared Bouzek gave good advice. Check CS as well. 

Deals are out there. I just bought a  place that should cf about $800 a month. PP was a little over $200k. 

@Matt M. That's very impressive. I'm curious to know what you factor in for cash flow?

@Derek Hutson, I agree about looking into the Springs. I also have a preference for military cities when it comes to buy and hold. However I'm looking in the Midwest more heavily now to get more bang for the buck.

I just purchased a property in July for $355,000. Quadplex. Rents are currently $3,200. And I believe I can up the rents to $3,700 over the next year or two. Cash flow is at least $800 per month, if not more. We'll see how much work is needed to maintain it over time. 

I think that it's all about learning what is and is not a good deal, and then making friends, particularly with a good agent. I was lucky to network with an agent who brought me this deal off-market (and several reasonable alternatives to this deal in a relatively quick time frame!). How do you create the same luck? 

Originally posted by @Jennifer Ward :

@Matt M. That's very impressive. I'm curious to know what you factor in for cash flow?

@Derek Hutson, I agree about looking into the Springs. I also have a preference for military cities when it comes to buy and hold. However I'm looking in the Midwest more heavily now to get more bang for the buck.

Rent minus HOA, taxes, debt service, and insurance. I self manage. Repairs and vacancy are not accounted in that example.

Wow thank you all for the prompt responses that was a lot quicker than I expected..

Here are a couple links to some analysis I did on rentals, first one in wheat ridge has very little cash flow and second is in aurora with much better cash flow. The most of my analysis I have done are somewhere in between these 2 ranges in terms of cash flow and usually around $200-300/month.

https://www.biggerpockets.com/buy_and_hold_results...

https://www.biggerpockets.com/buy_and_hold_results...

Would love some feedback on how accurate my calculations are!

@Derek Hutson the links don't work. Deals can be found but they don't hang out on the MLS for a few weeks while everyone runs their numbers. If you know what you are doing, you can find off market deals which is where I have found the best outcomes.

@Derek Hutson Denver is hard but there are deals out there, especially this time of year. I know you said multi family but if you consider a single family home, take a look at northglenn and/or south of 136th in Thornton. I bought a property on 136th and Colorado in May and cash flow $800 a month. I looked for a bit and just couldn't get the numbers to work in Denver.  I also self manage.

I might add that the BP calculator overthinks the process. I would run your numbers using a simple calculator and notepad. Total rent, minus expenses equals net profit. Net profit minus debt service equals cash flow. $100 is terrible, $200 is bad. You also should be marketing to sellers who are in distress and they NEED to sell for whatever reason. Find a way to solve their problem and you will make money. 

@Bill S. Do I need the fully upgraded pro membership on BP to post analysis examples? Or is there a better way to do it without the PDF?

@Derek Hutson , this is a bug right now, Plus members should be able to view their past 5 reports.

@Mindy Jensen Awesome thanks! Am I only able to see my past 5 reports or is there a way to see all of them?

@Scott Trench Just found a great realtor that I will be working with to find some great deals via a facebook event she was putting on..

Hoping to get an idea soon as well on how to start investing with little credit history (good credit score though).

Hi @Derek Hutson , the Plus membership only give the ability to see the past 5 reports. If you upgrade to Pro, you can see all your reports, print them out, and upload a logo to brand them with your company. (Also, on November 15, the price for Pro goes up, but if you upgrade before then, you are grandfathered in at the current rates and perks.)

yeah, we find better deals all the time.  I mean just me and my wife barely part-time.  If you want to work together then PM me.  I am a real person, proven life and history here in Denver for 35 years.

Originally posted by @Matt M. :

Deals are out there. I just bought a  place that should cf about $800 a month. PP was a little over $200k. 

Nice work. What % did you put down? And was this an off market deal? Was it a BRRR?

I haven't seen this anywhere in Denver and have started looking out of state myself. Though I'd stick around Denver if I could do deals like the one you mentioned.

Originally posted by @Gavin Estenssoro :
Originally posted by @Matt M.:

Deals are out there. I just bought a  place that should cf about $800 a month. PP was a little over $200k. 

Nice work. What % did you put down? And was this an off market deal? Was it a BRRR?

Every "deal" I buy is off the market now and has been for the past few years. Too much insanity "on" the market. I am using private financing until the loan seasons in a few more months. Then I'll refi into a better rate/term.

I did just grab a condo at 11th and Colorado for $68k. It's a studio that I'll STR. I'll use private funds there for the fixup and acquisition. Once it seasons, then I'll pull ALL the money back out.

There are options for using Homestyle renovation loans on the fix and holds. You would only have to put 20% down on the after repair value (ARV), and could have the renovation funds built into the loan.

We are about to purchase a 3bed 2 bath single family in Northglenn for 315k, right around the Muriel dr middle school area. Issue is, my brother would live the basement and try to rent the first floor out (house hack). I cant find any rental stats for that, most single family homes are rented out full around there, for 1300-1700/m i see. 

Any ideas if this is a good idea, what rents are generally for something like this? 1100/m?

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