All Forum Posts by: Kevin Greer

Thanks for sharing Dan.  This appears to be a great site and tool to search and analyze quick numbers. 

Thanks for sharing.  I think we are definitely feeling this in Denver CO.  I am sometimes concerned that we're moving to a top of a bubble that won't be able to sustain these home values and price increases.  Good to see incomes increases although not in line with housing increases. 

I agree with John Weidner and Bill S.  Denver is a hot market and you won't make numbers as written in books and prescribed by the rules.  But if you are in it for the long run, then start today.  I am in amazement of what the market is doing, how much it is appreciating, and how high the demand is.  80 people visited a home for sale last weekend which produced over 12 offers.  This is raising prices.

After living in Indianapolis for 6 years and selling our home to make less than 1% appreciation (over 6 years), the cash flow can be there, but not the appreciation.  And you need a trusted network in remote towns to give you comfort.  So for your local Denver buying, make sure you love the property and ready to play the long game.

Has anyone had experience in consolidating multiple property loans into a single loan?  Can this be done with a commercial lending or through a portfolio lending?  Is there published content on how to do this? 

I agree with Jon who is spot-on that in an "all-in expense model" which is how you have to look at each deal (use a detailed spreadsheet model) that cash on cash in these $300K homes is more realistic at 2-4% ROI. If you use a property manager, then maybe break-even. You have to be prepared to ride along long-term to make these deals work.

However, personal believe is that with rates likely to increase next year, demand will stay high, rents will increase, property values will increase and we'll find that these homes will be $400K homes within a decade.  Compare to other large cities where comperable homes are $600, $700K, etc, people will continue to come to Colorado as long as the job market stays robust.  Therefore, I see this investment game different than 1 or 2% rule and immediate cash flow and there is some risk involved.  My 2 cents. 

Hi John.  I love the Highlands Ranch and surrounding market counties as target market.  But agree with your analysis that break even or slight cash flow is normal.  You need either heavy cash down, an owner occupancy model moving around, or a rare fixer upper.  All this is challenging marker where there are more buyers than sellers.  But I think that this heavy demand also spurs appreciation and the long-term hold model may be worth it long term - 20 or 30 years as property appreciates, inflation impacts, rents increase, and the home gets paid off.  Happy to talk more.  

I have found Colorado and the Northern region where you're looking to be aggressive competitive and tough. I too have had a challenge finding positive cash flow homes without significant cash down and then the cash on cash return on deposit is not there. As a general rule, need to avoid HOA. I have also found there are many investors who love the area and will pay FMV+ for long term holds. So agree you're not doing the math wrong here, need to be patient and find deals where people need to get rid of property.

Interestingly, I'm finding Colorado investors buying out of state to meet cash flow goals.

Thanks everyone for the excellent advice on Security Deposits.  This was very helpful advice will research Colorado law and apply these practices!

Welcome to Denver Alison!  You'll fit in perfectly with your Dog - I think everyone here has at least 1.  But don't tell everyone what a great place this is (it's a secret!)

All,

In talking with various investors, I understand that in certain states security deposits must be maintained in cash, cannot be invested, and accounted for in a separate account.  Thus this would tie up tens of thousands of dollars in a non-interest bearing account.  Additionally, with a portfolio of properties, tying up this cash with a very low risk of payout while a new deposit is coming in would seem ineffective.

Is this accurate and does this apply to Colorado?

What are best practices for maintaining security deposits?  Any advice greatly appreciated.

Thank you.

Kevin