Two Units, One House, Colorado Springs

[Erin Spradlin]

Investment Info:

Single-family residence buy & hold investment in Colorado Springs.

Purchase price: $390,000
Cash invested: $50,000

This property is a 4 bed, 2 bath single-family home with duplex zoning. It is almost exactly one mile east of downtown Colorado Springs, within a 1.5 miles of Colorado College, Memorial Hospital and the Olympic Training Center. We are within five miles of a second college.
We're adding a kitchen to the basement and dividing this into two units. We are going to furnish both units and market to people looking for 30+ day stays (although we do have short-term clearance for this property.)

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

I'm a real estate agent, so I actually took a client to see this property. She preferred a smaller unit (a 2/1), but I really liked this place because it had the potential for 2 different units, it was clearly well taken care of, it was on a corner lot and the location was great (the area is a B or C neighborhood, it's close to the hospital, a college and the olympics center.)

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

As stated above, I actually told a client to buy it but she didn't listen to me. Happen sometimes. :)

We did get this $10K below asking. I feel really lucky about that since there was a similar property down the street that went for and did not have as many attractive features in my mind. Also, this was 2019, before everything got super hot again in early 2020. So, I definitely feel very happy about this purchase.

How did you finance this deal?

We put 5% down and have decided to live in it. Also, we had an amaaaaazing lender, who was able to work with us on our write offs and self employment (not the easiest thing to do.)

How did you add value to the deal?

We are furnishing it with nice-ish furniture (West Elm and CB2.) While it was pricey, we bought everything during Black Friday, so that helped reduce the price significantly.
We are also adding a kitchen to the basement, and adding digital locks on the exterior and interior to allow separation between the tenants.

What was the outcome?

We are estimating we will cash flow approx $600/month on this place after mortgage/utilities/insurance/taxes/etc.

Lessons learned? Challenges?

Great question! Couple things I've noticed since we moved in:

1.) white carpet is a nightmare (the seller put it in the basement before we moved in)
2.) the loud, dull plumbing noise that kept waking us up was a cheap and easy fix (under $200)
3.) the ability to split out the basement basically makes this two investments instead of one
4.) utilizing amazon for door step delivery is really, really nice and can help you save a ton of time

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

Yes. My lender, Jimmy Erminger, was awesome.