Is it time to switch strategy in Denver market?

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@Derek Howe I wouldn't give up on your goal, you are just going to have to adapt. Denver is a great market, and it will cool down again. Competition is tough right now due to lack of inventory and low rates, but there are still people buying houses with owner-occupied financing in Denver metro, you just have to be patient as more inventory comes on the market in the next 3-6 months.I'm the same way, I like to invest in my backyard of Denver, and based on the metrics, Denver is a solid long-term appreciation market. Have you thought of single family properties with separate entrances? Or, a single family property that you can add a separate entrance? There are a lot more of those on the market than just pure multifamilies and a lot of them are in better condition too since more owners occupy them.Also, you get great owner-occupied financing too with the lowest rates for single families. The benefits of single family properties with separate entrances are the multiple strategies that you can employ. 1) If you and your wife want to maximize cash flow and make money while living there, rent by room is an great option.2) If you want to just have a steady tenant that covers 50-75% of your mortgage, you can live upstairs and rent out the downstairs to a separate tenant.3) If you want to not deal with tenants but want to maximize cash flow in spring and summer, furnish the basement apartment and Airbnb it for 6-8 months.4) Another option is to rent as a medium-term rental, it is between a long-term tenant and Airbnb for rental income, these types of tenants are travel nurses and corporate people usually on contract for a 3-6 months. You can also combine these strategies to suit you and your wife's needs. Example, Airbnb in spring and summer and long-term tenant in the winter months.You can still cash flow in the Denver market, just need to be a little more creative, and you will get that appreciation as well.

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@Derek Howe Congrats on the first duplex. CO is HOT. First, ask yourself what your goals are. If you are looking for appreciation, then CO could still be a good fit. If you need cashflow (solid 1%+ cashflow), then you need to look outside of Denver most likely. The issue is that rents won't continue to rise as fast as housing prices, so you have to be sure to align your strategy to your goals. That said, have you looked at C'Springs? There are still some deals down there. Greeley is another area. Also, consider keeping your place and investing out of state (we divested out of state 5 years ago and haven't looked back!).

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@Jaron Walling Thanks for the advice and motivation. I do think I need to start working harder to uncover the "deals" out there instead of waiting for something to happen! @Whitney Hutten Thanks very much! To your question, I'm looking to play the appreciation game more than anything, cash flow is a bonus. The main goal is to find a place to park our money while we're still working and don't need so much on hand. The problem I had with out of market is that we're trying to stretch our dollars as far as possible by acquiring using the owner occupied financing method. With work, we're pretty tied to Denver metro. Over the past few weeks, I have started to think more and more about out of market, although paying the full 20-25% would definitely leave the coffers closer to empty than not, at this point. Thanks again!

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@Erin Spradlin to piggyback on what you are saying I just closed on a townhouse there and rented it less than a week later. The demand in the 80911 area code is extremely strong right now. Keep your eyes open, look off market, and if the numbers make sense on something make an offer as quickly as possible.

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@Derek Howe Markets are tough and prices are through the roof. Numbers in my market I'd never think were possible are possible. Houses in my old neighborhood (as a rental) are ridiculous yet people are getting approved for loans. Cash-flow in a A/B+ neighborhood?... you got jokes. All that aside the best way to find a DEAL is to do it yourself. There isn't a secret formula for REI. The strategy just changes based on the numbers. If the property doesn't cash-flow strong most investors are flipping. Get creative and look in the corners that nobody is looking. Contact other landlords and see if they want to sell. Look off market and find seller motivation. Look for problem properties. If you do any of this long enough something will pencil out. Denver is a good city but don't forget the smaller markets like Erie, Longmont, Colorado Springs, or Loveland. Sounds like the duplex is a good cash-flow investment. I'd hold on to that for many years if that's the case. If not maybe it's time to list it. What ever do just keep the ball rolling. You got off the real estate investing sidelines 3 years ago. Never go back. Just keep plugging away.

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Thanks @Jeff White, @Matt M. & @Ola Dantis! I appreciate the time and advice!

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You have to up your ground game right now. Prices are just going to keep going up as inventory has actually gotten worse this year. Watch and see what happens to pricing as all these first of the year deals start to close. I've been finding stuff off market for my clients, and it's going well. Competing on the MLS for investments is brain damage right now and for the foreseeable future. Inventory may go up, but there are still way too many buyers out there. So instead of 20+ offers, there are 6+...

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@Derek Howe - Have you thought about new construction? My girlfriend built a house in the Frederick/Firestone area and in less than a year her estimated appreciation/equity is close to 100k. People in that neighborhood are selling their homes way over asking price. It has a great school in the neighborhood, future plans include a shopping center, grocery store, and medical offices in the up coming years. Everyone has made a lot of good points on this thread but wanted to throw that idea out there. Also curious to see how other REI's feel about new construction in hot markets. Good luck, stay well!

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Thank you @Erin Spradlin & @Jeremy Gaal! I think it's becoming more and more obvious that I need to start pounding the pavement and looking for off-market properties

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@Derek Howe - Colorado Springs and Denver are really difficult at the moment. I have been advising people to look SE Colorado Springs and/or the Widefield / Security areas. There is a lot of military traffic in that location, it's between Pueblo and Colorado Springs, it has good views and you are starting to see Starbucks land there/fill it out. The inventory is also low there, but it is cheaper than the rest of Colorado Springs, so you can bid more aggressively over there. Also- you have a solid military tenant pool and we know Amazon/the Airport are being built out in that area.