First time Investing Advice

[Katelin M Barson]

Hello everyone!

I've read through quite a few posts and gotten some fairly good advice, so now I'm looking for some situation-specific advice. I am in my 20s and wanting to get in to the real estate investing market. However, it is quite difficult to get good advice elsewhere!

I currently live in the Denver area, I own a home, and rent to roommates, which is awesome for living expenses. I am looking to purchase an investment property in the very near future and do have a substantial amount to put down for the necessary 20%. I have primarily been looking for single family houses that are $350-$385K in the Westminster/Arvada area. The problem I am running in to is that a $375K house would be great, but every house is going for at least $25K over asking price, if not up to $50K over asking price! This definitely does not follow the 1% rule. It doesn't seem worth wile to spend $400K on a property, even with 20% down, especially since most places going for this need work or are quite small.

I have heard to steer clear of the Aurora area, but that seems to be the only place to afford a property now.

Does anyone have advice as far as price point vs. rental income goes? Is it worth it to get a property in this market? Should I be looking for a condo/townhome instead of a single family home? If my rent to mortgage ratio is something like $1700 to $2500, is this worth it? Or am I getting into dangerous territory?

Ideally I would like to purchase in the Denver area, since I live here, but am open to suggestions. I have heard Colorado Springs is a good market for investing, but I'm not sure yet.

Bottom line is that I know real estate investing is worth it, but I'm not sure the parameters. Especially with a ridiculously competitive market that every property gets 20 offers in the first day!

Thank you!

Katelin