All Forum Posts by: Jeremy Norman

There's been a bunch of people asking about a Pueblo Investor Group for a long time. I look forward to it!

See everyone there!

Also late to the party. Everyone else had good advice on the loan part. I will maybe say a few words about the market you chose.

BLUF: I think it's a great market to invest in still. Be conservative though.

It's been a while since I posted, but I am still active in Pueblo. I still like the market and have had to adjust over the last couple years to find the stuff that makes sense. Stuff can still cash flow, even now, with the right deal. I've seen a couple wholesale deals the last few months that were so good you could have BRRRR'd a duplex in a desirable place, likely recouping all of the money.

I will say that seasonality has returned, at a minimum. We'll see if rent gives up some of the gains in the near future. I have seen it a bit recently, and heard of managers having some similar experiences. Not the end of the world stuff, but same as normal housing, it's not going up 5% per month anymore (hyperbole).

I don't think you said where you're from, but on the first Tuesday of the month, I generally still go to the Colorado Springs meetup at Third Space. There's a few Pueblo investors there, too. Always happy to chat with people about real estate there.

@Sumesh B. pm @Daniel Haberkost

He does wholesaling there and probably a great resource to start with.

@Jason Levinson and I are putting together an investor meetup in Pueblo, CO. More details to come, but we're looking to have it on Tuesday August 17th, ideally around 6:30pm. 

If you're interested, please let us me know so that we can schedule an appropriate sized venue

We're expecting the cost to be free, other than a request to buy beverage or food from the venue - once confirmed. 

PS, I'll create a proper event on BP once the venue is confirmed.

No major renovations. The capex was somewhat significant and instant (but could have been easily worse). As units have turned, we've been trying to make minor improvements, primarily preemptive maintenance. I expect that ~10k of renovations per unit would increase rent I could reasonably expect by another $200-300/month per unit. Untested.

All numbers are from memory, btw. So may vary a little. 

At the time, memory says that it was 2950. It's now to 3400. PITI is ~$1500

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Pueblo.

Purchase price: $350,000
Cash invested: $95,000

4 plex in Pueblo, CO in decent shape.

What made you interested in investing in this type of deal?

Targetting Multifamily along front range for cashflow

How did you find this deal and how did you negotiate it?

MLS. Originally offered $315k which would have made it pure cash flow with then present rents a small amount. When winning bid fell through, we took backup position at breakeven pure cash flow, but below market rents.

How did you finance this deal?

Conventional. 25% down

How did you add value to the deal?

Mostly through turnover, gross rents have increased by ~$400/mo over 1.5 years.

What was the outcome?

Operating well. Many challenges for first time landlord.

Lessons learned? Challenges?

During the final walkthrough, one of the tenants informed us they would be late on rent. Another tenant also was late first month. Had to get those systems running faster than expected.

Furnace died first month, water heater 5 months later.

Unexpectedly high insurance.

Bought at beginning of the pandemic (we were watching it early as a coworker nearly got locked down in Wuhan in December 19).

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Wayne Tucker - Mortgage Broker
Jason Levinson - Real Estate Agent

I have done some write ups in the past. I think that the recent podcast was decent. The choice of houses they decided to consider was not my personal favorite and unlikely to make me even open it in a browser if my drip contained it-which it wouldn’t.

I think it’s a great city. However, there are an inordinate number of people who are flaky compared to CS and Denver. Good Contractors and property managers and handy men are hard to find. They exist, but I have always had a much easier time getting them to show up (or even return calls) when I lived in Denver and the Springs. In fact sometimes I am just paying them to go down from the springs-the lost time for people not showing up easily makes it more expensive than paying reliable people from less than an hour away.

Prospective Tenants are that way too. Maybe thats normal other places, but the first time I tried to fill a vacancy, I think maybe 10% of people showed up even after confirming with them less than 2 hours before. I’ve since gotten a lot better at making people stick to it and planning for some no shows.

I am still looking to buy in Pueblo. Market inefficiency makes you stand out. Many people don’t screen tenants or treat them right. I do both (I think) and so I feel like I have an easy advantage. It is more work though. The experience has been invaluable.

Also, I am thinking about doing a sort of reia or at least happy hour in the city sometime in the next month with a few BP and local people, depending on interest. Hit me up if you are interested-goes for anyone.

I can share some of my recent #’s or consider a few of yours if you like too.

I've written a couple lengthy discussions of the fundamentals of the city. I think it is an extremely good city to invest in so long as you understand what you are investing for (cash flow for us buy and hold investors). Fundamentally, Pueblo is growing faster than the national average and the rents are still only 1/3 the median income, meaning that at least half of the LOCAL population can afford rents. (and so on and so on).

Industry is increasingly diversified in the city. It is NOT a tech hub like Denver or (lesser) Colorado Springs. It does have tech, however. I've seen the applications to my own property. 

There are a few other important things to consider, however. First off, northern Pueblo is timewise the same distance away from down town Colorado Springs/Fort Carson as Falcon/Peyton, which are also growing and great. It's similar to how close Castle Rock is to downtown Denver (but it's actually closer in time). In my day job way up by the Air Force Academy, I had well paid co-workers that chose to commute from Pueblo/Pueblo West instead of spend the crazy amount of money to buy in the Springs. I've also had Pueblo tenants that commuted up to work in Fountain.

Colorado Springs is great. I live here and love it. I'm a native of the city. However, it's worth understanding that the crazy amount of rent growth, influx, and increasing pay (mostly through new higher paying jobs, not necessarily better pay for the existing jobs) have not blessed everyone equally. While Colorado Springs is building quickly... it's far from cheap to do so. Pueblo is affordable and 30 minutes away... so don't discount the "draft" it's getting (although it's far from the only driver of the city). 

Now for the reality check to this rosy picture... If you look way back to the recessions, Pueblo was hit harder than Denver or the Springs by about 2-3x (not percent... times.) That can easily go the same way in a recession, as the economic draft drying up can be hard on the city in terms of price. However, even more seriously, it's highly absentee owned by people who live in Colorado Springs and Denver (or metros), so... expect that any liquidity issues in real estate to be magnified in Pueblo.

In the end, I think that it's still a great place to invest. You can get cash flow if you look (even after long term costs) and the fundamentals suggest you should be able to hold on to it through a recession if you buy it right. It has been experiencing price appreciation as well, making it a great hybrid market. 

One last thing, I often say this to people I know in COS and DEN metros... it's also a perfect place to do "long distance investing" with training wheels. You will be forced to build your systems and teams, but it's only 30 minutes to 2.5 hours away from most bigger front range markets. 

... Just my 2 cents. Happy to connect with anyone interested in the area/market or even more if they have deals.