All Forum Posts by: Alex Whittow

Thank you, @Bruce Woodruff, @JD Martin, and @Andrew S. for the input! It is very helpful.

As for the tenant misunderstanding piece, I think a bit of education could go a long way in introducing how heat pumps work and how to minimize energy costs, so I don't see that as a non-starter. However I appreciate your thoughts on better insulating the house/making it more energy-efficient first and foremost. As for reducing my own footprint, I actively do this each and every day! To me, my real estate portfolio is an extension of my footprint and it's my ethical duty as an owner to make reductions on this front, too.

What are everyone's thoughts around electric furnaces? I imagine the education needs go away, but they seem to still be relatively inefficient and perhaps not as "green" as we think yet (per Bruce's article).

Thanks for the response, Bruce! I forgot to mention it, but I am aware of the need for a backup heat strip, so thanks for mentioning. My primary goal is to move as far away from the combustion of fossil fuels as quickly and practically as possible. I realize that's not 100% feasible at the moment, however, by electrifying my properties and simultaneously supporting the transition of our energy grids to more renewable sources, then I can meet this goal quicker.

I’m in the process of replacing a natural gas furnace with a more climate-friendly option; specifically, an air-source heat pump or electric furnace.

Given the reduced energy needs and minimal environmental impact of a heat pump, this is my ideal choice, however the installation costs almost double the electric furnace. Financing help exists, but it's not great. On the other hand, a heat pump drastically reduces utility costs for tenants and makes the property more resilient for our inevitable climate reality.

An electric furnace seemed like a nice alternative until I learned that its operating costs (i.e., utility bills) are HIGH throughout the winter, and the grid it’s drawing energy from is not yet that clean (this is in Wisconsin). This is the opposite of the heat pump: lower installation costs, but higher utility costs (over double what it is today with gas), which seems a little unfair to offload these increased costs onto existing tenants.

Does anyone have any experience with this type of situation? If so, I’d love to hear why you chose one option over the other, challenges you ran into, financing solutions you came up with, and/or any other helpful insight. 

Thank you!

@Shane Brooks Hey Shane! I'd love to connect sometime; shoot me a private message and we can schedule a call. Otherwise (or in addition), I plan to intend our next meetup on 1/25 and that would be a great opportunity for us to connect, too.

@Michael Lile mote Yeah, we've looked at all small multi-families (1-4 units) in Durango and all of them have pretty poor cash flow. There are a few that could "work out" if you owner-occupy, but even then it becomes more of a lifestyle decision and less of a strictly investment decision. Now, you could try to find off-market deals too, and that could maybe work out better? Overall though, I think owner-occupying your first property is a great way to get started, you just have to be aware of the numbers. Alternatively, what if you continued to rent, and instead used your cash to invest in a cheaper market elsewhere, with higher cash flow and greater returns? Is that not a better investment decision? Clearly there are arguments for and against each strategy, so it's more food for thought than it is "this is a good decision, this is a bad one".

With the recent virus situation, I haven't seen much of local change yet (nor would I consider myself a "local expert"). It seems a few sellers are dropping their prices a bit (and some homes have been on the market awhile, so those owners may be open to accepting a lower offer). Also the # of new listings compared to last year have taken a hit. Dan Korman of Alpenglow Properties in town puts out some quality video market updates that are insightful. I would imagine that nationally real estate investing has slowed down a bit, which could present an opportunity for someone who continues to go full steam ahead - while maintaining social distancing guidelines of course :) 

Hi @Michael Lile mote, great to see some Durango chatter on BP. You will learn a ton through BP and also (and I can't stress this enough) by actively discussing your plans, strategies, thoughts, etc. with other like-minded investors. So I'd encourage participating in both! Our local meetup run by @Jens Nielsen is a great place to connect and conversate. I also am part of a smaller, close-knit group for "newbies" in the Durango area, so once this all clears up, I'd love to grab a cup of coffee and discuss more. Good luck to you!

@Christine Heartsill

Thanks for reaching out, and I don't know why I just saw this now! I'd be happy to grab some coffee whenever you're in town, or as Brandon said, the 4th Monday of the month we all have a local meetup.

As for the local investment strategy, it really depends on who you're talking to. It's expensive here, and returns are definitely not as high as other nearby areas (Albuquerque, Cortez, others...), or even positive at all. The numbers have not made sense for any recent multi-family on the market that I've looked at, unless the goal is to lose money... 

With that said, I believe creative opportunities exist (e.g., owner-occupying a multi-family) and I am hoping to secure a local investment within the near future. Meanwhile, others will not even consider investing in town, and others have only invested in town. Again, I'm a newbie so I'm still navigating the waters of SW Colorado, but I hope that's helpful.

Hey Tony, happy to see you on BP! Looking forward to continuing the conversation at the monthly meetups, and also would love to grab a coffee and chat more in depth sometime.

@Tyler Gibson Hey Tyler, I appreciate your response. I plan to stay optimistic on Durango and intend to make something work creatively. Also, I've already grabbed that cup of coffee from Joe - it was delicious!

@Jens Nielsen Thanks Jens! I'm looking forward to connecting and speaking more on the 30th as well.

@Brandon Halley Thanks for the warm welcome, and I'm happy to hear of your creative success in town. I'd love to chat more and hear your side of things in further detail, so I have a better idea of how you or I could help in the future. I sent you a private message to connect.

Hello, all!

I'm new to Durango, CO and excited to get involved in the real estate investing space here in town.

As for me, I'm primarily interested in buy-and-hold rental properties for cash flow. I've heard Durango isn't the best market for that, but I'm sure other cash flow investors exist - I'd love to find them (you?) and dive into how one translates Durango + low cash flow into a profitable opportunity. Flipping houses does not particularly interest me.

I currently own one duplex in Milwaukee, Wisconsin (my hometown) and intend to continue to invest in this market as well. I'm more than happy to provide local knowledge and insight if out-of-state investing interests you.

I suppose that's a decent overview of my situation. I'd love to learn more about your goals, strategies, and ideas over a cup of coffee. Just send me a message.

Cheers!

Alex