new member from colorado

[Gabriel Tafoya]

Hi BP community!

My name is Gabriel Tafoya. I am new to real estate investing and I currently live in Arvada, Colorado.  At the moment I am paying off the last of my debt and have been building credit to get approved for a loan.  In the meantime I have been attending webinars here at Bigger Pockets as well as podcasts. I also orders the book on investing with low and no money down.  I am still trying to decide on a niche. Since I am not a homeowner I hope to find a property to house hack. I am interested in buying and holding small multi-family.  Since I live in Colorado near Denver I am unsure if this tactic is the right choice given my current market and inexperience. I am open to suggestions 😊. 

[Bill S.]

@Gabriel Tafoya so you are concerned that prices are too high and rents are too high as well. Demand is what drives rents and prices. Right now Colorado is growing adding about 50,000 new residents per year. About 20K are from indigenous population increase and the rest are moving here. Do you think all 30,000 immigrants are coming here for MJ? I don't. Sure it has contributed but just having some competition from neighboring states isn't going to make everyone pack up and go home. Really the issues is supply. There is very limited new construction in the space below median/average rents and home prices. Until that changes, I don't see any dip in rents or home prices. Right now we have less than one month supply of homes for sale. We have below 5% vacancy rate (even lower vacancy rate for below average units). It is going to take some time so absorb the demand even if the demand weakens. 

If you buy a property that makes sense. Meaning it covers your costs, you manage it well, buy it without over paying above market just to have a property, have some reserves, and you can cover your share of the costs then I think you should be purchasing a property. 

One aspect not considered is raising interest rates. While higher rates might keep a lid on prices it is unlikely to cause them to fall. Those that buy while securing a lower rate will be better off in the long run. BTW I don't think that higher interest rates is going to lower the demand for rental units.

Waiting to time the market down turn is a fools game just like gambling on appreciation.