New investor in Denver and Chicago

[Rick Fowler]

Hello BP,

I've considered REI since 2002 and have a 2-flat in Chicago that I bought in 2006 to live in and rent the other unit. Now I live in Evergreen, Colorado, just outside Denver and still have the Chicago 2-flat - can't afford to get rid of it yet.

My background includes an MBA from University of Chicago, software engineering for mobile phones, web site development, information technology consulting, and business coaching. I am a certified professional coach with the International Coach Federation.

Why REI? Why now? I'm creating my own freedom through self-reliance. I work my *** off, and now I will do that for myself instead of an ungrateful employer.

I am building my business plan now, which means I'm learning as much as I can from BP, and I'm starting my networking and market research. I expect to mix buy-fix-hold and flip, but I am still doing research to determine the best strategy for me and the markets where I am.

Biggest areas for me to learn:

- how to do deals even though I have little capital of my own

- how to determine what strategy I should use for my market

Looking forward to connecting with you all.

Rick

[Anson Young]

Originally posted by @Rick Fowler:

@Anson Young That's exactly the kind of analysis I need to do so I can select an effective strategy. I'm building models and looking at the market. Still learning how to look at it.

What criteria are you using that tells you fix-hold won't work in Denver Metro?

What are the most useful market data sources you have found?

Although I manage a rental in Chicago from Denver (with a property manager on the ground there), I'm unsure about building a new REI business investing remotely. Is that what you plan to do, or are you going to change strategies for Denver Metro investments?

Rick,

Its just a matter of looking at what is available (inventory) and what kind of rents those properties are going for. Fixers are being snatched up by fix and flip guys who are also competing with some fix/hold guys and first time home buyers. We have no 'war zone' type areas, so there arent these $40k houses lying around that will rent for $800/mo section 8 like some other markets see. The closest you can get is commerce city, parts of greeley, colorado springs and pueblo for over 1% deals. It all depends on your strategy, if you are looking for 1.5% or 2% deals, they just arent here in Denver, our median home price is $285k or so.

While we have amazingly low vacancy rates and rental prices are increasing, the home prices are also pacing with increases to keep up. Most guys who I know who are doing OK bought in the early 90s, or 2008-2009-2010.

My resources are MLS stats, and rent calculators like rent-o-meter, zillow rents and craigslist to find rental numbers in areas.

My point is this, I can find a 1.5% deal that is OK here, or buy 5 2-3% deals in another market with management for the same outlay in resources/cash/loan/whatever.