All Forum Posts by: Ben Rhodin

Hi! Almost all the surrounding cities in Denver have pros and cons and are generally solid investment plays. It will come down more to what type of REI you are planning, and what type of strategy you want to implement. As there are areas that are better suited for MTRs, if you want to do STRs it limits your options, if you want to do strictly LTRs and are in it for the long haul, then I have a few other areas that I would target. Also will depend on if you want to be in the path of progress, or in areas that are already up and running. Personally, our general rule of thumb is that the west of Denver is better and more attractive for people. But I also have a lot invested and am bullish on certain areas of Aurora, and Englewood.

Hey @Julie Hill! This is a great question and not one that I see asked that much. But it is a pretty easy question to answer, and I am more than happy to take a look at it with you. A couple of points that @Matt M. already pointed out...

It will be a long and painful process, as the city is currently very backed up in the permit department. So it will be a couple of years until the property is complete. So is it worth shifting your equity into an already completed project, that will create cash flow and appreciation from day one, instead of having to front the costs and negative cash flow on this one until it is complete? Building and new construction are also expensive as far as financing and is a completely new niche in REI. Is it worth your time and effort to try and figure it out?

Personally, I would say that the juice isn't worth the squeeze on this one, but it does sound like you have some great properties for a developer or home buyer in general. I would analyze them from a current perspective and see what can be done with them. You may find that selling them all together isn't the best option, maybe pulling your equity out in other ways makes more sense. I do this type of analysis with clients all the time, so feel free to reach out if you want a second pair of eyes. 

Hey @Jacob Munson! Way to plan ahead, and there is already a ton of great info in here for you to sift through. But I'll add a few points. 

The loan product will depend on the asset type you are targeting. Conventional for Single families, and FHA for any multifamilies (at least at this time). Just be aware that anything larger than a duplex will get complicated due to the FHAs self-sufficiency test, which makes it nearly impossible to get a tri-quadplex here in Denver.

I agree look in surrounding cities, and not in Denver proper, unless you are ok with some extra regulations and plan to be strictly above board for your investing strategy. Location will also depend on what strategy you plan to utilize as you'll have to navigate Short term rental laws around the metro area, and who knows where those will be in 2025.

Prices right now are a sweet spot of 500-600k for single families and 650k+ for multifamilies. Multifamilies can easily get into the millions.

One thing I haven't seen you think about, or anyone else mention, since you are two years out from moving out here, what is keeping you from house hacking in San Diego for the time being? Even if you just bought something for you both to live in for the next 2ish years, that would work as an investment out there when you move, that could help jumpstart your investing career in a pretty great location.

Hey @Charles Frazier! As many have pointed out, I don't believe has been clarified. Is 100-150k your Purchase price, or is that the amount liquid you have for Downpayment and other costs? It will change the answer here very much.

The STR Laws here in Colorado are very tough to navigate and could write a novel on the different counties and cities. So best to reach out to a solid STR agent and get the run down that way. However, in short, it is divided into two sections. The mountains/foothills vacation markets and the Denver metro area. There are more STR-friendly spots in Denver other than Arvada/Wheatridge, that others haven't mentioned.

The other question is, If you live in Sunnyside, and have been there for a year, have you thought about the opportunity to move out and move into a new place in Denver, that may have an ADU? You could rent out your current place, and get a new home that has an STR opportunity on it. You could mitigate your Cash out of pocket this way, and create two rentals instead of one.

Hey @Sandeep Kongara! Subject to and seller financing is a great way to get the most out of your property in today's market. I've had other clients do this with their multifamilies here in the area, so happy to give my 2 cents on it. I also probably have someone that will take it from you with those terms. 

At the end of the day, it will come down to your personal goals with the money. If you plan to reinvest the equity, then sub2 and seller financing will be counterintuitive. But can still work. However, if you want passive income, then seller financing is fantastic.

The due on sale clause is a risk but is often not done by lenders, it is of course a risk but will be put on the buyer of the property, where they will need to refinance, not you.

I'll shoot you a DM.

Hey @Alexandra H. Band! This is one of the most important aspects of real estate, portfolio management, and optimization. It is one thing to keep buying and buying, but if you aren't having an optimized portfolio all you are doing is eating your time. I go through this process with clients every week, taking an objective look at the portfolio to see where you can improve and optimize and to see if there are any under performing assets. 

Let me know if you want to connect :)

Hey @Luis Arevalo! Congratulations on taking your first step, and the CHFA loan is a great product! In terms of your question, it will come to your own situation, goals, and the amount you can qualify for. 

Overall, I would say a single family would be the best investment from a long-term standpoint, as you won't be dealing with an HOA that can change its rules, or force an assessment. and typically SFRs appreciate at a better rate than attached properties.

No, if you are stretching yourself trying to get an SFR or the SFRs you can get are in bad areas or need lots of work that you can't complete then I wouldn't recommend it. But if you can get an SFR that has a basement or separate part of the house that you can separate off into a second unit, that would be the winner, as it will operate as a duplex.

At the end of the day, definitely run your numbers as if you didn't live there, and make sure it will be a worthwhile asset in the long run.

Hey @Chris Reyes! This is not a bad situation to be in, and I have been seeing these questions more and more lately. Of course, as @Justin Moy eluded to it will come to your personal investment strategies. You could invest passively in syndications, or be more active. Personally here in Colorado, one of my favorite strategies is currently the hybrid Small-medium multifamily space. Meaning you mix MTR/STR and LTR rentals. You get the nice baseline contingency with the LTRs and then you can capture the cash flow from the MTR/STR. I have closed numerous of these in the past months and most of the clients are able to capture a 10% COC return. With that kind of capital, you should have no problem getting into a property depending on your goals. Are you aiming to hit a certain COC or ROI, or are you looking more in the long term? I don't agree with a lot of the people that say that Colorado is tough to invest in, I have clients closing deals each month. It comes down to making the deals work.

Depending on your goals, you could put that cash to work on a larger property and get some economies of scale, and ease of management. Possibly also putting down more to assist the cashflow number. Or you could invest in a couple of deals and put less down. There are 100 different ways to invest your cash but without some more info, it's tough to guide you. Feel free to DM me if you want to help strategize.

Hey @Kaleigh Sanchez! Educating seller's that their house is worth less than what they believe is a tough thing to do. Don't try to wrap your brain around convincing them to sell if their number is way off what it's worth. If they want 700k and the ARV is 700k, then you can try any creative strategy you want, but unless it would work as a buy and hold and be a killer deal even at that inflated price, you shoot your shot and walk away when they say no, and move onto the next one. I've completed numerous fix and flips in the area, and a few utilize creative financing. If you want a second pair of eyes, let me know and I can help you figure it out.

Hey @Stephania Ramirez!

Great question and already a lot of good advice in here! Especially in terms of watching out for HOAs, as they can make or break a deal. Typically, the lower the HOA the friendlier it is, hence why we typically avoid the luxury and very high-end complexes.

There is nothing wrong with investing in a condo or Townhome, and there are pros and cons to each over an SFR. You have less cap ex and maintenance, but you are paying an HOA fee. and these properties can also make great Mid term rentals after you move out depending on where it is located. At the end of the day run your numbers as if you didn't live there and if it works, then you can make it happen. While you live there maybe get a roommate to help cover the payment, or if the HOA allows it STR it while you are away. I've had numerous clients start with condos and townhomes and they can be a very approachable first investment.

One thing I didn't see mentioned here and will be a question for your loan officer is your max payment. The thing with condos and townhomes is that the HOA fee can sometimes make your monthly payment the same or more than a much higher-priced SFR. So a lot of the time people think they will be more affordable by stepping down into a condo or townhome, but in reality, they will be paying the same monthly for it. Of course, it depends on your exact situation, and if it's a down payment that is limiting your pre-approval.

Just some additional thoughts! But I think you are on a great start!