Denver Market - who’s knows it best???

[Tom Conant]

Hello Everyone, I am a new investor looking for some suggestions when I comes to up and coming markets. I’m looking to utilize my young age and federal eligibility to buy my first investment property. I am particularly interested in the Denver area. Is anyone familiar with the city or know any good municipalities near by that offer good upside growth potential? On a side note, I am also interested in St. Petersburg, Florida! I’m really looking for a winter destination that is either warm or ski worthy. Thanks for any input or suggestions! Tom

[Phillip Bicker]

Hey Tom!

That is great that you are researching the market before moving to make the most of your time/money spent here. 

Right now your search is very broad and with so many areas of Denver still realizing 8-12% appreciation per year (or more), it is hard to pinpoint one or two locations without further information. Are you looking for a neighborhood that is currently fairly inexpensive and is spending significant money (and hope to profit from the development/appreciation). A few areas that are inexpensive but have major upside potential would be near Sloan's Lake West of Denver, Edgewater, around Lowry south east of Denver. At the lowest end, there are some very inexpensive homes around Colfax and I-225, and they are spending a lot of money in the area on the hospital (think tenants) and commercial amenities (appreciation). If you are looking for a more "family friendly" type neighborhood that may already be a little more expensive but growing, you may want to check out Lone Tree that is growing extremely quickly due to a number of new companies moving out here, including a very large Charles Schwab HQ. Castle Rock is on the southern end and has some great potential with a ton of development coming into the area recently (including year round skiing and one of the largest shopping centers in the US when the mall and outlets are combined). All of these neighborhoods are  1 hr 15 mins - 1 hr 45 mins from the best ski resorts (or shorter for smaller ski resorts like Loveland). 

If you are looking for multi-unit homes with great cash flow and don't care about being right in Denver, the best cap rates and returns (as well as availability) are down in Colorado Springs (about 1 hr south of Denver). The price point is also significantly lower. Entry level home around $250k instead of $350k for a similar home in many Denver Metro areas. Multi units with good cap rates are very hard to find in the Denver Metro right now. 

For MLS searches - the Denver and Colorado Springs markets are on different MLS's - if you are considering both markets, make sure to find someone that has access to both areas.