Just getting started... suggestions on where to start?

Question

Hello,I'm sure most of this has been addressed somewhere, but I'm just starting to look into my first multifamily investment properties in Colorado, really anywhere within 2 hours of Denver (the closer the better, but the better the deal, the more I'm willing to extend this). For the meantime, I would likely be doing this remotely, so I'm looking for something that would be turnkey, tenants and PM in place. Where's a good place to start for searching properties, finding a good agent (do typical sfh agents suffice for multifamily investing?), etc.? Thanks in advance,Payton

Braden Hobbs · Answer

@Larry Fried I'd be interested to know what markets you are recommending as well.@Scott Trench Couldn't agree more with your last sentence. I spent 2 months over analyzing all the math "rules" while trying to find a home for my fiance and I. Finally, I just went with logic and we're closing on our first home together. We will want to rent out our home in a couple years so we just focused on schools, good neighborhoods, and access to things to do. However, if renting doesn't work out then we should be able to sell with appreciation. My thinking is that at the pace Denver is growing, the limited supply of houses, and the fact that the fed is doing everything they can to make people buy over rent, we should have no issue selling for a gain if the rent numbers don't pan out.

Marco Santarelli · Answer

Payton,I certainly appreciate wanting to invest in an area because you have family there, or maybe want to move there. However, the danger in that thinking is that you skew or bias your logic by making decisions based on possible future wants instead of the market. You really should choose your market based on the returns you can get, the stability of the market (employment, growth, etc), and future growth drivers.If you choose a market with low rent-to-value ratios you're starting out giving up on the immediate earning potential of your investment.TURNKEY: There is no formal definition of what a "turnkey" property is. It can mean different things to different people. For me personally (and my company) I've always defined it as follows: The property is in a stable or growth market.The property is in a desirable neighborhood.The property is new or has been newly renovated.The property is cash-flow positive even if fully leveraged.The property is leased, or in the process of being leased.The property is under professional property management.The property has been carefully selected with renters in mind.Please post any questions in you need more clarification.Continued success!

Marco Santarelli · Answer

Hi @Payton Gonzales,Welcome to BiggerPockets!Glad to hear that you want to get started in real estate investing. It's a great time to be building your real estate portfolio. Why the Denver area? Can't speak for the far suburbs, but I know Denver has become very pricey with low rent-to-value ratios. Th returns aren't what they used to be.Anyway, be sure to check out the Ultimate Beginners Guide as well as my 10 Rules of Successful Real Estate Investing.Continues success!

Scott Trench · Answer

Hi Payton,I just invested here in Denver (within the city limits) and I have to say that the growth here is astounding. Most of the nice areas near Denver won't give you those nice Price/Rent ratios. That said, the area is growing so fast, and appreciateing so fast that long-term rentals near the city may be a good bet. It's amazing to see the new buildings, infrastructure, and people that seem to be a constant theme. Focusing on price to rent ratios in smaller cities and towns in faraway corners of the state might cause you to miss out on where the true growth seems to be occurring - here in Denver.

Brandon Turner · Answer

Hey @Payton Gonzales welcome to the site! Definitely start jumping into the community here! Be sure to read through The Ultimate Beginner's Guide to Real Estate Investing to help you get started.Also - here's a couple articles you might enjoy:The 21 Best Real Estate Investing Books Ever How to Rent Your House: The Definitive Step by Step GuideHow to Be a Landlord: Ten Tips for SuccessFinally -be sure to setup some keyword alerts - especially for "Denver" so you can jump into local conversations.See you around the forums!

Jarod Bona · Answer

The best answer to where to start is something you are already doing: Spend plenty of time at Bigger Pockets learning as much as you can. Figure out the pros and cons of different styles of investing and start planning. The article below discusses two basic approaches, flips v. buy-and-hold, and recommends Bigger Pockets: http://www.successhealthlifestyle.com/blog-and-art...

Bill S. · Answer

@Payton Gonzales Since Denver is very central, 2 hours includes a pretty good chunk of the state as well as part of Wyoming. There is cheap property in the rural areas of Colorado and Wyoming. Go East, South, and Southeast to find those areas in Colorado. That said, I would carefully craft your investing criteria. Some rural counties in Colorado have a shrinking population despite the rest of the state experiencing growth. You want to make sure you jump in with your eyes open.

Joe Fairless · Answer

@Payton Gonzales congrats on making the decision to get going! You just need to match up the money and the deal. So, I would start out by making sure your finances are in order and you're qualified for a loan (if that's how you're financing it) and then build out a team in the Denver area. Find the top producers and young stars of the industry and reach out to them with your search criteria.

Matt R. · Answer

Welcome to BP. You can cash flow multis in Pueblo, CO. The Denver area could still be superior long term though. Good luck with your search!

Larry Fried · Answer

@Payton Gonzales Hi and welcome to BP! There are lots of turnkey opportunities in areas outside of Colorado. I will PM you about what I know.