Single Family Home Denver Analysis

[John Samuelson]

Hello everyone! I got a deal in the pipeline and wanted to share my thoughts about it.  This deal is in Denver (market is high) and is sort of an off market deal.  Basically a family friends parents passed and one of the sons came to Denver to see to be sold. He had originally listed it for $375k, and it got bid up to $395k but at the last minute the seller pulled out because couldn't come up with all the money for down payment.

He needs to leave town and I told him I would be a quick no hassle buyer, where we could skip the buyer commission fee's. We have agreed on a price of $360k. Here's more stats

• Built in 1954, one owner (his parents)
• How is in great shape minus few little things
• Has solar thats totally paid for
• Classic blast from the past decor, probably late 90's style.
• 1800 sq ft
• 4 bedrooms
• 2 baths
• Addition of 3 season enclosed patio with pellet heater
• Appliances all in good shape, water heater is the oldest
• Decent area of town, about 10-15 minutes from downtown Denver
• Taxes are $1604

I ran a fake rental ad, and think I can safely get around $2300 a month.  After talking to my loan guy I think this will provide around $600 cash flow. Though this place doesn't fit the 2% or even 1% rule. But I would be banking on cash flow and appreciation, which Denver has been doing a lot of.

The other option would be to try and flip. I've never done a flip before but feel like this place is primed with all the old decor for it.  As a gut guess thinking $15k would be enough to turn it around and resell it. So would be around $375k in, thinking could resell in the low $400's based on comps.

Thoughts? Anything else I'm missing?

[John Samuelson]

Thanks guys!

@Jared Bouzek thats an interesting idea, which i had not considered for this deal.

@Matt M. thanks for the insight :) You are right about 15k, though i really don't think the house needs much more then a kitchen and bathroom. Probably fresh paint i guess... in combination with what @Jared Bouzek said I feel like its a lot of time/energy just for 15k. Not sure its worth my time.

At the end of the day, i'm more interested in buy and hold then creating another job.  Really appreciate the back fellas!