All Forum Posts by: Rodolfo Canon

Rodolfo Canon of Canon Property Group at Your Castle Real Estate hosts a podcast for those interested in Denver small office investment. This is part of an on-going series to teach the principals of commercial real estate investing through a series of case studies.

In this podcast Rodolfo will cover:

• How to find off-market commercial real estate in Denver
• The evaluation of the asset as “stabilized” and as “value-add”
• The regulatory risks and hassle to change use for the buyer
• The valuation risk for the seller as a “value-add” proposition
• What asset visibility does to valuation

https://canonpg.com/denver-small-office-investment/#more-1250

Rodolfo Canon of Canon Property Group at Your Castle Real Estate is hosting a webinar for the first time commercial real estate investor. This is part of an on-going series to teach the principals of commercial real estate investing through a series of case studies.

We’ll cover a case study about a value-add six unit apartment building bought by a first time commercial Investor who had made a mistake in residential investing.

In this podcast Rodolfo covers:

• The importance of the investor profile:
• Management expertise
• Risk tolerance
• Financial capability
• The difference between residential property financing and residential financing
• The concept of the capitalization rate, why it is important in commercial real estate and understanding it can increase the probability of the investor’s success

https://canonpg.com/first-time-denver-commercial-investor/

Rodolfo Canon of Canon Property Group at Your Castle Real Estate is hosting a webinar for the first time commercial real estate investor. This is part of an on-going series to teach the principals of commercial real estate investing through a series of case studies.

On this webinar we’ll cover a case study about a value-add six unit apartment building bought by a first time commercial investor who had made a mistake in residential investing.

In this webinar Rodolfo will cover:

• The importance of the investor profile: • Managementexpertise
• Risktolerance
• Financial capability
• The difference between residential property financing and residential financing
• The concept of the capitalization rate, why it is important in commercial real estate and understanding it can increase the probability of the investor’s success

About Rodolfo Canon: Rodolfo is a highly experienced real estate agent and developer in Denver, CO. In his 12 years in real estate, he has managed the acquisition and disposition processes for homeowners and investors in the Residential, Multi-family, Industrial, Office, Retail and Land sectors. His background as an investor and developer includes over 120 multifamily townhome and condo units built in the last six years. Three more projects are in the pipeline for 2018-2019 that include a 19-unit town home project and 36 and 30 unit condo projects in Denver and Lakewood.

RSVP: https://www.crowdcast.io/e/first-time-denver

Date and time: 10:00 AM on April 4th.

@David Corboy, if you can generate sufficient net positive cash flow that funds your maintenance reserve and puts some money in the bank and you get 6% annual appreciation, will that meet your financial planning objectives?

@David Corboy, i would not focus on the "Rules." There is a lot of money to be made in REI in the Denver market. One of my colleagues, Chris Lopez, who is a frequent contributor on BP, is covered up with work with investors buying SFR, duplexes, triplexes, condos and small apartment buildings.

If you are looking for a long-term buy and hold, the critical factors are: 

Is the property stabilized or not? 

Is there a net positive cash flow number you are comfortable with?

If not, how can you improve the property to raise the rents? 

Do you have the time, skillset, and risk profile to do that?

If the property has stabilized rents and there is no value-add opportunity, will 6% annual asset appreciation be enough for you? 

That is the historical average for the Denver market over the last 40-years.

Over the last 40-years Denver real estate has appreciated, on average at a rate of 6%. During that same period there were only two price declines in the late 80's and in the last bust in 2008. 

If historical data has any value to you, I think you could derive a conclusion that says that price appreciation is going to continue. As many have noted, jobs keep coming and highly paid employees keep coming. The Denver MSA has many economic clusters that are attracting investment and producing jobs: aerospace, logistics, bioscience, fashion, electronics, and infrastructure engineering. 

The successful strategy I am seeing is to buy stabilized properties, if you cannot find value-adds. Slowly improve the units,  raise the rents, add amenities to generate other income streams, and ride the horse to wealth and happiness. This, of course, requires a long-term investment focus and the amount of risk you are comfortable with. 

As with everything in real estate, the answer is almost always location-specific. We have tried direct mail in our market and have had very poor results. We even tried mailing with a Design of Experiments (DOE), 32-run, Plackett-Burman Screening Design with a process improvement statistician and that was not fruitful. 

We find that there are two ways to find properties:

1. Networking. This is how we find most of the deals for ourselves and our investor clients.

2. Grunt work. Identify an area in which you are interested. Identify potential properties. Find the owner's contact information and call them. This is a 1 in a 100 chance at best, in our experience, but it is a part of our business development strategy. 

Our advice is to become a network hub. Get the word out that you are looking. Provide your contacts with something of value (information) so that they will reciprocate. This will go slowly at first. But as you build your network (strong links), you will be introduced to their network (weak links) and those will be your source of leads. 

One was 24k, the other was 32k. They included adding baths, new windows (egress included), new flooring, adding a bedroom, closets, etc. Basically, unfinished basements from 1925 that were finished. The plumbing was the most expensive in both as we had to install injector pumps and break a lot of concrete.

I've just finished two basement remodels in 1920's bungalows. I used a GC who I met through some commercial new builds where he was the plumbing contractor. I have been impressed with his work just in case there is anyone out there needing a GC to do small remodels. What I like about his work is the following:

1.Competitive price

2. Plans his work and works according to the plan.

3. Finished ahead of schedule, including with inspections, and

4. His crews clean up every day. At the end of the day the site has all debris removed and has been swept clean. It's amazing how much difference this one fact makes to the stress of a remodel while the residence is occupied. 

If anyone is in need of a great guy who does great work on time, on budget, and neatly, send me a note and I'll put you in touch. 

@Kevin Andrews, @Robert Jordan, What data do you have that shows that the Denver market is "over-priced?"

If buyers are still active and the months of inventory and days on market all show that it is a "seller's market," what numbers do you use to determine that this market is over-priced?

Just curious...