All Forum Posts by: James Orr

Hi Mark... yes, we are definitely seeing a softening (some of it seasonality). Have you run your numbers to see if holding out for the higher rent is worth the added vacancy? I'm curious what you came up with.

Thanks.

There are several factors that make Northern Colorado and Fort Collins specifically such a strong market for real estate sales and rentals.

We have great, diverse job base including a huge tech, healthcare, breweries and university for jobs.

We're consistently named as a top place to live attracting employers and workers to consider the move. Part of it is weather with 300 days of sunshine a year, part is low crime and part of it is great local culture.

We are a growing University town with a good number of students and more coming each semester.

There probably are a bunch of other reasons, but that's a few good ones.

I will also mention, since I track stats on rentals for my clients that we have seen a slight softening of the rental market (which is partly seasonal). This is NOT to say that the rental market is not still super strong, but it is not the crazy insane rental market we've seen recently.

For example, here are rents by week for single family homes in Fort Collins (all bedroom configurations).

Also, when we run our analysis numbers, we still recommend (and use) 3% for vacancy and strongly recommend investors start looking for tenants at least 60 days prior to your current lease expiring.

@Alex Lawson... do they have 5% down owner occupant loans in Ontario? My clients buy subsequent houses as owner occupants and then live there for a year and convert them to rentals.

Hi @Adam Rothweiler...

> I've also looked into Greeley and Evans just a little bit but through Conversation it sounds like Greeley is going to be much more urbanized in the next 5-10 years, calling it the "new FoCo." Not much to go on but I'm going to be doing some researching. Ever hear any talks like that?

I work and invest in Northern Colorado. Greeley/Evans have very different economic conditions driving it than Fort Collins (and even Loveland).

It is true that all of Northern Colorado (like Denver) are going up in value very quickly.

And that the price to rent ratio in Greeley tend to be better than properties in Fort Collins, you rarely ever hear people say, "I ultimately want to move to Greeley." You hear it regularly with Fort Collins and less frequently, but still often for Loveland and Windsor.

With that being said, there is lots of opportunity in Northern Colorado in general and Greeley/Evans in specific.

Hope that helps.

FHA is often the most lenient to qualify for. High 600 credit score shouldn't be an issue there at all. So that would be 3.5% down. You may have challenges with DTI but you can talk to your lender about that. If it were me, I'd talk to a lender early in the process.

As an aside... here in Colorado we have some lenders that do grants combined with the 3.5% FHA to make them nothing down like your VA option as well. Some of my clients doing the Nomad model do FHA as their first property.

Hope that helps.

You may want to consider the Nomad investing model as well @Austin Freeman to buy a number of rentals over a period of years. You can do the first one with little or nothing down and then the remaining ones usually with 5% down each.

That's awesome @Logan Trainor! What's the plan for the next house?

Thanks @Solomon Oh!

> I like the numbers & charts you used to calculate the amount. I used the vacancy rate of 8% as I am very conservative about having 1 month as a buffer to find a tenant.

Ahhh... if I were running numbers on that, I'd use a "rent ready" cost for that rather than have it be a "vacancy".

> I know I really can't say too much in the way of rentals, but doesn't 10 units/houses seem like a small number for 10 years worth of work?

This is the Nomad model where we are moving into each one and only putting 5% down on each, so the total amount invested is very small. You can do additional deals beyond this as well, but you need to live in each one for a year to get owner occupant financing with the smaller down payment and slightly improved interest rate.

> How do we accelerate this process so we can do 100+ units?

You can do additional investing beyond the Nomad model.

Thanks @Solomon Oh!

> I like the numbers & charts you used to calculate the amount. I used the vacancy rate of 8% as I am very conservative about having 1 month as a buffer to find a tenant.

Ahhh... if I were running numbers on that, I'd use a "rent ready" cost for that rather than have it be a "vacancy".

> I know I really can't say too much in the way of rentals, but doesn't 10 units/houses seem like a small number for 10 years worth of work?

This is the Nomad model where we are moving into each one and only putting 5% down on each, so the total amount invested is very small. You can do additional deals beyond this as well, but you need to live in each one for a year to get owner occupant financing with the smaller down payment and slightly improved interest rate.

> How do we accelerate this process so we can do 100+ units?

You can do additional investing beyond the Nomad model too to increase the number of units.

Hi @Miguel Escobar...

I'm in Fort Collins and know several attorneys here in town that specialize in different areas of real estate. What area in particular are you looking for? I'd recommend a different attorney for evictions or setting up an LLC or preparing a note and deed of trust, etc.

Thanks!