All Forum Posts by: Jay Gil

I had run numbers for a property priced at $600,000 with an initial down payment of 25%, assuming monthly rent of $2600 and financing $450,000(15yr mortgage at 3% APR). After factoring in property taxes, insurance, property management, repairs and maintenance, leasing fee, vacancy etc. I get the following numbers.

INCOME

Total Rent: $31,200

EXPENSES

Vacancy: $2,564

Taxes: $4,200

Insurance: $120

Repairs & Maintenance: $2,290

Property Management: $2,290

Leasing Fees: $1,300

FINAL NUMBERS

Total Expenses: $10,201

Net Operating Income (NOI): $18,434

Cap Rate:3.07%

I might be a bit off on some of the assumptions/expenses, but this is a high level estimate on what I expect income and expenses to be.

 Alex, I do agree with you several parts of the country being easily accessible from the bay area. I see that you are a real estate investor. Are there any specific areas that you are focusing on? Sorry for the open ended question. Just trying to gain valuable insights from the BP community. 

Thanks everyone for the great feedback!

These are the reasons why I choose Denver:

1. Given that this will my first real estate investment, I am psychologically inclined to buy something closer to where I live. Denver is a 2hr 30min flight from the California bay area, with plenty of flights operating on a daily basis. I understand that states in the South(Tennessee, Georgia, Florida, etc) make more financial sense, somehow the idea of being closer to my real estate investment seems more appealing. Again, I understand that this is likely just a mental hurdle. 

2. I want to avoid California(high cost), Seattle(almost bay area prices), Portland(tenant friendly). Since I expect this to be a long term investment, I want to avoid areas that are going to struggle with water supplies due to the droughts(Nevada, Arizona, Utah). I have done some research and read news articles published by reputable sources and it appears that several western states are going to be badly impacted by the worsening weather conditions and droughts in the coming decades. Colorado might be impacted as well, but seems it might not be as hard hit.

3. Jobs and people relocating from California to neighboring states(including Denver). With more companies allowing a hybrid work option, I feel that the migration will continue. 

4. Denver has lots to do in terms of outdoor activities(winter sking and summertime hikes, etc), so I feel that it will be a desirable place to live

With that said, I am also considering the Atlanta area as well. Given that this will be my first investment, it's certainly not easy to make a decision.

I live in California and am looking into purchasing a single family house in the Denver area. I have shortlisted 3 Denver suburbs(Littleton, Highlands Ranch and Parker).  I identified these suburbs primarily because of good schools and the fact that I should be able to find a property under 600k. The house will be managed by a property management company. The goal is to hold on to the house long term(10+ years and until it is fully paid off). Since will be my first investment property purchase, I was wondering if someone could provide me feedback on:

1. Would houses in these cities potentially hold their values in the long term? Which city should I prioritize? 

2. Any other Denver cities besides these that I should consider, something that might be a better long term investment?

3. Given the appreciation in the housing market, I am too late to enter the Denver housing market? 

Thanks!