What Would You Do With $1MM in Denver This Winter?

[Reed W.]

Greetings! New to this forum and looking for some suggestions.

I currently live downtown Denver in an apartment I own. There’s roughly $50k left on the mortgage and could easily be paid off (worth roughly $250k). Plan is to hold on to the apartment long term and rent it out. Getting married in May- combined income hovers around $250k (if that matters).

In addition to a major repiping project, we’ve outgrown the apartment and are ready to make a move come early next year. It’s beyond time.

The market isn’t great right now, but we’ve been approached by a family friend with a proposition. She has a lot of cash off hand, and would like to give us an Intra-family loan for a house which runs at about 2.3%. If we can find the right investment, we could get up to $1MM to leverage. It’s lower cost and lower risk than any sort of traditional financing.

There are a lot of approaches to take with this much money, but whatever approach we decide has to incorporate a liveable space for the wife and I. We’d like to stay in Denver proper, which limits our options. This would also be a long term property to include in our small portfolio, so we’d be here for a few years max before renting it out. In other words, we’re trying to figure out a hybrid living space that we can add some investment opportunities to.

Here are the options I’ve outlined:

1. Traditional duplex
2. SFH with a basement to convert to a small lower apartment
3. SFH with correct zoning for an ADU (Alternative Dwelling Unit- more reading here:
4. Pre-purchase two townhomes from a developer before they go on the market

What would you do? Are these options actually feasible in Denver proper with that amount of money?