All Forum Posts by: David Hodge

Bill S. Thank you for the response. I actually had bad info. The fin sq footage above grade is actually 1,270. Not 850. The tax assessors site labeled the sq footage in a confusing way. With this updated info rent range now says $1,600. Does that sound reasonable to you? I agree, the schools are 5's which isn't that great. If the repairs are what we are thinking, it should be a good 20-25% discount from the as is value. We'll see how it goes on Sunday!

Thank you Matt M. Do you recommend any management companies that might be able to give an opinion as well? Since it's a holiday weekend and I only have a couple days, I'm thinking the craigslist test might need more time.

Matt M. I don't own the property yet though. I'm trying to get a better estimate so I can determine what my offer will be.

I'm meeting with a seller this weekend to possibly purchase their house and am trying to get in contact with some local Denver property management companies to get a better idea of what the rent would be.  Zillow says $1,795 which seems way to high but Rent Range says $1,350 which seems too low.  I called a couple management companies already but they seem to have taken off early for Thanksgiving. 

Also, if anyone knows south Aurora well, what do you think this house would rent for... 3bd, 1.5bath. 850 fin sq ft plus 420 sqft unfinished basement.  2 car garage.  It is in the Aurora Knolls - Hutchinson Heights neighborhood. 

I agree with Tally Lawing . There is a lot here in CO other than Marijuana. Plus, if someone is so enthralled by marijuana, that they are willing to move across the country for it, they probably aren't the type of people who are buying houses.

Jackson Long my first rental was from a turnkey company a year ago and has been great so far but I am now focused on finding off market deals on my own, within my state. There are some downsides with turnkey properties... first, you probably aren't getting it for a discount. Investors who find discounted properties are able to pull the equity back out, sometimes immediately, and reuse that initial downpayment to buy another property. That's how you really accelerate your growth. That's not going to happen with turnkey. If your in a slow growing market, it could be many many years, or decades, before you can pull that money out to buy more. Another risk is cheap houses and how you need to calculate capex on cheap properties. If your rent is $2,000/mo you might be ok with capex of 5-10% but if your rent is only $600/mo your capex will likely need to be 20% or more. Your rent is much lower, but the cost of a roof on a $2k rent property is probably pretty close to the $600/mo property. So a larger portion of your rent needs to go to capex (possibly all of it). Long story short, don't buy cheap properties if you aren't experienced. Finally, there are a lot of bad turnkey companies and a lot of bad areas. You won't see that by reading a proforma. Go with a soldier area and the best management co around, not the best looking P&L.

Also, if you decide to go the out of state, cashflow route, I recommend finding the best company with the best management. I bought a house from BuyMemphisNow and it's managed by one of the most reputable management companies in the country. If your main focus is building your net worth, I would try to find something here in Denver, but if you want something that will cashflow, without much work, consider Memphis. There are a number of trustworthy companies there. Both options have their inherent risks.

James Free have you considered any nonconventional means of acquiring properties, like direct mail marketing? You have a better chance at getting good returns if you can find something that isn't on the MLS for everyone to see.

There are significantly more people moving into Denver than there are homes being built. No one knows for sure, but if you simply look at supply and demand in the Denver area, we could be continuing up for 5-10 more years.

Thank you all for the responses! Christian Bors s I agree that seems like it would help. I actually mention in the letter that my wife and I are looking for buy a house... I'm hoping it shows that we are a real couple and not just some faceless business.