All Forum Posts by: Mark Simpson

@Cody Cook.  As @Tim Emery implies, in the actual resort towns a lot of the real estate has been well picked over and ROI's tend to be fairly low. I see two main reasons for this. A) Location location location - there are only ever so many places that are going to be walking distance from the chairlift, and so investors are willing to take a lower cap rate with the expectation it will be more than made up for in the end with appreciation. B) You are often competing against other buyers who have no idea what ROI or Cap Rate mean. They just want to be able to tell everyone they have a place in Aspen/Vail/Telluride.

I cant speak specifics for other areas but here are a few examples for Telluride. It is important to realize that everything in town is only walking distance away, the town is surrounded by both NFS and open space, and there is a limit on how high you can build. The least expensive 2/2 condo is 659K. You can probably only expect a 3.5% ROI if you short term rent it fully managed. With that said, I just bought 2 hotel rooms that get a 6% cap 100 yards from the lift - they are 1980s and the crappiest rooms in town. They average around 210 nights per year at 140/night average or thereabouts. More nights than anything else in town because they are the cheapest. They are not sexy, and so point B above is not really a factor. Management takes around 35-40% of gross so you could trade a bit of time on Airbnb for a higher return.

As an investor, we are always looking for value.  We often get caught up in the numbers though and sometimes forget there is much more to it than just the cash on cash return.  If that's all that was important we would all just buy in St Louis or Michigan.  That's not likely the same house you would want to go stay for 3 months in the summer though!

I guess, because of that, my best advice would be to book yourself a tour of Airbnb's throughout the state.  The whole state is great, but diverse, and all the towns are different.  I for example don't like Vail as IMHO its essentially a glorified truck stop, sterile, with none of the old cowboy charm of a place like Breckenridge, Crested Butte, Aspen or Telluride.  To get the best 'Value' find the town that works for you, then the investment that will work for you.  

Hi David.  I am a passionate investor and Licensed Broker based in Telluride, CO.  I would be happy to discuss Colorado so feel free to Call or email me directly.  I invest in Telluride and across the Western Slope (Ouray - Delta).  By the sounds of it, you intend on spending a reasonable amount of time in the state, and so your personal enjoyment of the place is as equal a priority as the investment side.

If you think you will be travelling back to Chicago a lot during your time out here, then a front range/summit county location like Jon has suggested might be in your best interest, so you arn't too far from DIA.

If, however, your goal is to get far away from the highway, then come and visit us in Telluride!  There are an unlimited supply of trails to hike and several rivers to kayak.  We have the added benefit of being just a couple of hours from Moab which is maybe less attractive in the middle of summer, but an exceptional place for spring or fall adventures.  From an investment standpoint, the town of Telluride has put in a concerted effort to make it both a summer and winter destination with 2 world renowned film festivals in addition to bluegrass, jazz, blues and brews, wine and car lovers festivals filling up the summer calendar.  Because of this my short term summer returns rival the winter returns.  I'm not so sure any other Colorado town could say that.  While you intend on being here for the summer, that just a) means there is more for you to enjoy when you are here, and b) it is a good safety net if you don't end up being able to spend as much time as you hoped for.  I luckily landed here, and only in travelling the rest of the state do I appreciate how lucky I have been to find IMHO the best place to invest and LIVE!

Feel free to reach out,

Mark Simpson

Telluride Realty & NGNF LLC

There are probably 10 different answers to this question and they all begin with depends.

In my opinion the most valuable aspect of a flip is finding the deal.  If its a great deal, you should have no shortage of people tripping over themselves to give you a much better split than that.  My partner and I have done a few at 50/50 and 60/40 (although I would never do less than 50/50 again).  We did some of the work, but hired out much of it).  We were only able to do this without putting our own money in once we had already done 4 or 5 flips with our own money, and proven that we actually knew what we were doing.

How much experience do you have?

How certain are you with your numbers - purchase, rehab, sale?

Do you have any assets you could pledge as added security (in which case why not just pledge that and the flip to get hard money).

All these factors play into the equation.  If your answers are None, not very, and None for even 2 of the 3, 80/20 might be a good deal for you.  In this case, how much would 20% net you, vs just bidding the job?  Another way to do it would be do a % split, like your 80/20 but you get paid for your time at an hourly rate as well (but don't get paid until the deal is done, and only if a profit is realized).