Newbie moving to Denver in 3 months

[Jonathan Perham]

Hi BP folks - I'm new to BP and new to real estate investing. I work in sales in the construction industry and will be relocating to the Denver area in the next few months. Hoping to make some connections through BP for learning groups, REIAs, etc and of course get more involved in BP. I'm moving from San Francisco - so Denver may be hot but at least I have the chance to purchase in the area which is exciting.

My current plan is to use FHA to move into a rehab/ready move in for a house hack to eliminate my housing expense and hopefully get a little cashflow. I'd prefer a duplex/multi but it seems more realistic to focus on SFH with roommates at my price point ($400k+/-). Longer term I plan to move into multi-family to start generating cash flow for future investments/replacing W-2 income.

I've spoken with a few real estate agents but wanted to ask the BP Denver folks for some advice:

-What are some good areas in Denver metro that people in late 20's-early 30's like to rent in?

-If anyone has any suggestions, I'd appreciate any insights.

Look forward to getting to know the BP community and especially the Colorado folks.

Thanks,

Jon

[Jeff White]

@Andy Grabis  Hi Andy, that's awesome you are planning out that far ahead.   As for the property you mentioned, it is 1,272 on one side of the duplex, and probably about the same amount on the other.  You could probably get 2,600 on both sides, and maybe another 200-300 for the garage per month to get ~2,800-2,900 per month in gross rents.   

As for making this a house hack, you could easily live in one side, get a roommate (600-700/month), rent out the garage (200-300/month), get about 2,072-2,272 month to contribute to your mortgage (which includes the other side's rent). Lets say you did a FHA 3.5% down at 4.625%, that would be about a ~2,400/month mortgage payment, so you won't be living for free, but you would be close.

It doesn't meet the 1% rule that a lot of people talk about, but in Denver, any duplex in that price range 375-425K will probably rent for about the same unless you find one that has 3 bedrooms on each side then you probably will get 1500-1700/unit.  

The prospects in Denver are very good long-term, so you aren't necessarily are going to find great cash flowing deals, this one is a better one considering the price point and current condition of the property, and it is in an upcoming area that could be a solid place to buy and hold long-term property once East Colfax neighborhood gets redeveloped.    

Also, if you put a little more down than 3.5%, you could get better cash flow, but this one is a solid one.