Cash Flowing Medium-Term Rental in Denver

[Erin Spradlin]

Investment Info:

Single-family residence buy & hold investment in Denver.

Purchase price: $120,000
Cash invested: $24,000
Sale price: $165,000

This was a 400 square foot studio in the heart of Capitol Hill. Concerns we had about this property was that while the HOA was low, the building seemed to have maintenance issues. That said, because of the location, we felt it would cash flow with zero updates as long as we furnished it and marketed it toward medium (30+ day) buyers.

What made you interested in investing in this type of deal?

We knew that there was demand for short-term and medium-term rentals based off of what we were hearing and our own experience. We thought this property was a great price and would appeal to professionals.

How did you find this deal and how did you negotiate it?

We found this deal with yellow letters. We reached out to strangers and asked them to sell us their place, and, shockingly, one of them took the bate.

How did you finance this deal?

Conventional - with an assist from a HELOC on our primary.

How did you add value to the deal?

We furnished it and marketed it, but that's it.

What was the outcome?

This was a great property, that cash flowed between $200-$600/month. Because we did background checks and catered to higher end clients, we had no issues with tenants and it required very minimal work.

Lessons learned? Challenges?

HOAs can be rough. Despite how well this property cash flowed, we continued to have concerns about the HOA and the maintenance. Rather than sustain a large special assessment in the future, we decided to sell and use the money elsewhere.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We were the real estate professionals on this deal. :)