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Updated over 8 years ago, 03/17/2016
Evan the new member from booming Colorado
Hello!
My name is Evan and I just signed up to biggerpockets.com. I live in Westminster Colorado and I am tired of losing money in the stock market. My main goals are to build wealth and supplement my families income with rental properties or whatever investment makes sense here in Colorado where the housing/land prices are very high and climbing.
My wife and I have some disposable income and are wondering what the best approach to taking advantage of the rising housing costs here. Also it seems like real estate is a good way to build wealth over a lifetime.
Here were some of my thoughts:
- buy a lot, build a house and sell it.
- buy a foreclosure or wholesale house, flip it. This is hard because right now in this market houses are selling in a day.
- buy a residential or commercial rental property. My question here is does this make sense with prices so high?
I don't have a lot of experience buying and selling real estate or much knowledge on rehab costs but I am fairly comfortable getting bids and working with subcontractors. I was starting to look into trustee sales and will probably visit a few next week to watch and learn. I would appreciate any advice people have! I'm looking forward to getting started on my new career!
Evan
Hi Welcome to BP. There is a lot of great information on the site. If you have any questions about the local market or need any assistance, feel frre to contact me.
Welcome to BP Evan. You can gather lots of good information from this site and its members to help you decide which investment approach is best for you. If you have questions about the market, let me know, I'd be glad to help.
@Evan Moyle Welcome to BP. I also live in Westminster.
Your opening statement says you are looking for rentals, but 2 of your 3 options are quick cash. Just to provide a little insight both the flip and build models are extremely competitive. That is not to say you can't find deals, they just take a bit of time and effort.
Our market is hot right now, but rentals always make sense with the intent to hold long term. I am still buying quality cash flowing rentals right off of the MLS in Denver.
Best of luck in getting started - please let me know if I can provide any assistance.
Welcome @Evan Moyle! As Kevin stated above, there is a ton of great information here. See where it says 'Education' at the top of your screen? Drop down that list and see what's available. Personally, I like the podcasts. I know there is at least one where they discuss how to succeed in a 'hot' market like this one.
Also, search for Denver Meetup in the forums and come to the next one and meet some people. You just missed the March one, held on Monday night, but it's usually held the first Monday of every month.
Hi Evan,
Welcome! All three of those are great strategies and all of them are working today in Colorado and Denver. But all three of them are very different. I would continue your diligence and encourage some introspection to help you determine what your true goals are and then go with the strategy that most closely aligns with that.
to your question about the rental market, Yes, prices are high and climbing but so are rents. Interest rates are still super low. looking back historically, the markets have always risen so I would not be worried about how high they are but pay more attention to the basics of buying a good rental property, like cash flow. if you buy a good deal today, that should still be a good deal down the road.
Best of luck and let me know if I can help along the way.
Coop
Thanks everyone so much! I will take the advice here and start to use the resources on this site. I appreciate the great responses.
@Evan Moyle welcome. Don't really have much to add to the good points that others mentioned above. I would say that I think it's far easier to be a landlord (less learning less risk) than it is a flipper or builder. If you buy a property that makes some cash flow and the value of homes goes down or even if the rent rates decrease all you have to do is hold it and things will recover. If rent rates go down 10% then you are out a few hundred a month but if you mismanage flip or new build and are off by 10% your $ lost are much more.
Welcome Evan! There are definitely deals to be found in the buy and hold rental space. It is competitive, but inventory seems to be increasing of late. Good luck - this is an exciting field!
Welcome to BP! I am a buy and hold investor so if you have any questions about that investment route let me know!
Welcome ! Agree in assessing your three options, # 3 - long term buy and hold is the least risky path and can progress you to accomplish your goals of avoiding stock market speculation. I too am amazed as how poorly the stock market has performed the past 5+ years and why so many ride this along with stagnant returns. If you can get to a positive cash flow property, as the tides increase, so will your rents, profits, and wealth. The long game allows you to balance RE along with job. Good luck and listen to the podcasts!
I like all your options! I been involved with all three and I'm bias towards development because I'm an architect by profession. While there is more risk involved with development, and flips, there's also more room for profit. However, if a great rental or flip opportunity popped up I would definitely be interested.
In this market, because it's hard to find a good deal- for land development, flips, and even good cash flow rentals, if you have the option and the ability, maybe jump on any one of them that pops up as the best deal.
Let me know if you want to chat I'd be happy to share flip and/or new build development processes if you're interested.
.
Thank you Dorothy! I appreciate your response. I would be very interested in chatting about build development processes. One thing I have noticed about land prices is the cost is sometimes as much as a similar lot with a house on it.
