Single-family residence buy & hold investment in Colorado Springs.
Purchase price: $390,000
Cash invested: $50,000
This property is a 4 bed, 2 bath single-family home with duplex zoning. It is almost exactly one mile east of downtown Colorado Springs, within a 1.5 miles of Colorado College, Memorial Hospital and the Olympic Training Center. We are within five miles of a second college.
We're adding a kitchen to the basement and dividing this into two units. We are going to furnish both units and market to people looking for 30+ day stays (although we do have short-term clearance for this property.)
What made you interested in investing in this type of deal?
I'm a real estate agent, so I actually took a client to see this property. She preferred a smaller unit (a 2/1), but I really liked this place because it had the potential for 2 different units, it was clearly well taken care of, it was on a corner lot and the location was great (the area is a B or C neighborhood, it's close to the hospital, a college and the olympics center.)
How did you find this deal and how did you negotiate it?
As stated above, I actually told a client to buy it but she didn't listen to me. Happen sometimes. :)
We did get this $10K below asking. I feel really lucky about that since there was a similar property down the street that went for and did not have as many attractive features in my mind. Also, this was 2019, before everything got super hot again in early 2020. So, I definitely feel very happy about this purchase.
How did you finance this deal?
We put 5% down and have decided to live in it. Also, we had an amaaaaazing lender, who was able to work with us on our write offs and self employment (not the easiest thing to do.)
How did you add value to the deal?
We are furnishing it with nice-ish furniture (West Elm and CB2.) While it was pricey, we bought everything during Black Friday, so that helped reduce the price significantly.
We are also adding a kitchen to the basement, and adding digital locks on the exterior and interior to allow separation between the tenants.
What was the outcome?
We are estimating we will cash flow approx $600/month on this place after mortgage/utilities/insurance/taxes/etc.
Lessons learned? Challenges?
Great question! Couple things I've noticed since we moved in:
1.) white carpet is a nightmare (the seller put it in the basement before we moved in)
2.) the loud, dull plumbing noise that kept waking us up was a cheap and easy fix (under $200)
3.) the ability to split out the basement basically makes this two investments instead of one
4.) utilizing amazon for door step delivery is really, really nice and can help you save a ton of time
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes. My lender, Jimmy Erminger, was awesome.
Very Nice! This is very similar to the property my wife and I purchased in early 2019. We are near the School for the Deaf and Blind, close to downtown, memorial park, the hospital, and plenty of coffee :)
Ours is a 3bd 2ba with a loft that could be turned into a 4th bedroom. Zoned R4 we want to turn the walkout basement into it's own apartment. How have you dealt with noise? It is pretty easy to hear everything happening in the other unit - walking, talking, watching tv. Not a big deal for us now since we primarily to Airbnb, but would be a turn off for future renters.
@Lani Archer - yes, I just used the basic schlage digital lock. This one to be exact: 2 of Schlage Connect Smart Deadbolt with Century trim in Matte Black, Zigbee Certified - BE468GBAK CEN 622
@Ryan Riches - 1.) do you know what's going on with the school for the deaf and blind? It's a huge lot, beautiful building and I never see anyone there. I wonder if it is still functioning; and 2.) I haven't dealt with that and luckily, our place doesn't have that issue. I would think carpeting upstairs would be one way to deal with it, but they can also put something in the ceiling that helps mitigate sound as well. Might be worth it for the long-term if you are doing two rentals.
@Erin Spradlin not sure how I missed this response until now! I know at least Pre-Covid the school was still functioning, would often see parents walking their kids to school or dropping them off in the morning. But certainly a large, under utilized lot.
Carpeting would be a good route to go - we are just attached to the original hardwoods! Current plan is to continue renting it out as two units until the market makes sense to rent it all out as one.
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