First Rental Property Opportunity

[Cole Leonida]

Hello everyone!

I’m new to BP but excited to be a part of the community. My wife and I have been kicking around the idea of getting into real estate investing for the last year or so. We have been considering flips but we were recently presented with a potential opportunity to purchase our neighbor’s home with the hopes of renting it out. I would love some input and feedback on the opportunity. Thank you in advance for all of your insight!

We are located just south of Denver in Highlands Ranch. Our neighbor is selling their home in a new community in the homes are barely a year old. We would like to present a cash offer using a family member as the capital for the purchase. The problem is we are unsure of what we could get for rent in this particular neighborhood. We are right next to two different hospitals and we are in the middle of the Highlands Ranch master plan community that is fully developed at this point. Location is fantastic, however, comparable rents that we see in the area would not cover the mortgage and monthly expenses.

Obviously this sounds like a bad deal, however, being new to the real estate investing game I found a service online through Nomad that is offering guaranteed rent for two years of $3000 a month which would make this a deal that we would be willing to take. It is a single-family home and we are just uncertain of how services like Nomad work and whether or not there is a catch to be aware of. Any insight on services like this would be greatly appreciated.

As a secondary option, if rental is not a viable investment choice here, we have considered a cash offer to the seller with a month or two hold period and in the Denver market we could see a meaningful appreciation going into spring and summer. If we could get a cash offer excepted at a discount, would this be a good strategy to dip our toe in the water with real estate investing?

This is all happening very fast but we feel it is a great opportunity and don’t want to miss out because of fear or uncertainty.

Thank you all for the advice!

[Brian G.]

@Cole Leonida you should absolutely pursue this. If you can buy a desirable property below the fair market value then you should always consider. How much is the property worth and what are they willing to sell at? No idea what Nomad is but how can you maximize rents? Student rentals by the room? Corporate furnished housing? Short term rental? Think creatively. If the property is in great shape and in a desirable area you are very likely to see appreciation over time. The key is figuring out how to cash flow so you reap the benefit of long term ownership.