All Forum Posts by: Matthew H.

Originally posted by @Daniel Hillman:

Hey Matthew, welcome to the Springs! It is an amazing city and I think it will fit a lot of the criteria you have. I would look in the Old Colorado City area or anything on the West side of I-25. That will put you closer to the mountains with easier access to hiking and cycling. I love Red Rocks Canyon! You could also check out the North East side of town between downtown and Palmer Park. Palmer Park has some great trails and you could be in biking distance from downtown. Best of luck! Feel free to reach out if you have any other questions. 

Exactly what I was looking for. Thank you Daniel for the suggestions! We will check them out for sure. 

Originally posted by @Jeremy Gaal:

Matt,

From one Jersey guy to another, welcome (or potentially future welcome). Finding multi-families in the Springs are tough, but we have a pretty awesome investing community here. With that said, what would your timeline be to move out this way? I may have a rental opening up soon. Either way, feel free to connect and happy to help in anyway I can. 

 Hey Jeremy, thanks for the potential future welcome :D

We are looking to take a trip out there this summer to get a gist of the area so the move likely will not take place until the fall.

First the backstory. Feel free to skip to the end for the question :)

I am a 30 year old guy who grew up in Central New Jersey and although I have made plenty of friends here, I have really never felt at home. It just seems like people are in a rush to get everywhere, so stressed, and not into the same way of life that I am, the weather is humid, and the cost of living is high.

I have always taken the safe route in life, rarely taking chances and also foregoing experiences/vacations until last year.
Ever since I was a child, I felt an attraction to the West, specifically Colorado. I had never visited CO until Feb 2020 for a weeklong snowboarding trip to Breck and absolutely loved it. Since then, I have taken a few other trips to different states and even Mexico (if you knew me, that would surprise you!)

For years, I knew that I did not want to stay in the Northeast but up until now I haven't felt like I was ready or had a good excuse to take the plunge and move.

I have been reducing the amount of "stuff" in my life for years to the point where I can now fit everything that I own in (or on) my 2011 Honda Fit.
I have paid off all of my debt, have over 6 months of my current spending in cash, and have a current NW around $282k with $120k of that in a taxable account.
I have a stable job as a Data Analyst that I have been working remote with since the pandemic hit.
I am single with no children or pets (but do have 2 small house plants)

I love walking, cycling, mountain biking, snowboarding, kayaking, hiking... basically all things active and outdoors.
I like to reduce the amount of my personal consumption and focus on the important things in life such as my relationships, health, and finances.
I am that guy in the neighborhood that always walks or bikes everywhere although I have a great car parked in the driveway.

Anyway, a good friend of mine asked what I thought about moving out west with him. We have both been feeling a bit... stuck lately.
Now that I am working remotely (I asked my employer to remain remote even after everyone returns to the office... request pending), I have someone to go and split costs with, and I really don't have much keeping me in the Northeast (family likely moving to South Carolina in the next few years), I am ready to take the chance.

There are so many places that I'm sure I would like but in an attempt to not get analysis paralysis, and actually commit to making a move, I decided to focus on Colorado Springs.
This came after doing some research on decent cost of living areas that are ideal for young active professionals who love the outdoorsy lifestyle such as myself (and my friend).
It seems like there are good job opportunities there if I do chose to get a job in the area (likely to be the case if my job denies my wfh request).

Ultimately, I want to buy a small multifamily house to house-hack in but first I want to start narrowing down where in Colorado Springs I would like to be.
I felt that it would be best for us to rent a 2 bedroom apartment for maybe a year in Colorado Springs to get a feel for the area and see if/where I would like to buy something down the road.

I am not a big city guy but do like downtown and suburban areas. I like being walk/bike distance to grocery stores, gyms, etc. For reference, I currently walk about 3.5 miles to the nearest Aldi to get groceries :D
I am okay spending a little bit more if that puts me in a better suited-for-me area but still want the rent to be reasonable.

For anyone familiar with the area, do you have any recommended areas that I should look further into or stay away from given the little bit of info that was shared above?

Thanks so much!


TLDR; looking for areas in Colorado Springs for a young, active professional to rent a 2br apartment

Originally posted by @Michael Lee:

You need to realize it will ttake 25 or 30 units to maybe pay all your bills unless you just are looking for supplemental investment. To here are many factors consider but I would want ARV on x .70 as well as your C on C return of at least 12 percent and a positive cash flow.

 Thanks for the reply Michael.

I am planning on buying a property that I can live in and rent out the rest (a "house hack"). I want to purchase it as a rental so that I have the option of moving out and having a good cash flowing rental to add to my portfolio.

Right now, I am really only concerned with running the numbers as if I wasn't living there.

It's helpful to see what you are looking for in a purchase (coc return of ≥ 12%). Does ARV really matter to someone who is not planning on flipping or pulling their money out to use elsewhere?

Originally posted by @Karen O.:

It's a beauty.

Your numbers seem about right if you've accounted for closing costs, vacancies, maintenance, capex, pm and financing. 

There may be other costs like heat if they aren't separate & lawn care/plowing which could eat into your cf.  And a 150 yo house tends to need more care unless it's already been updated.

And of course all of that is moot if the seller is unlikely to sell for $150k+ less than asking.

 Understood. You can see my assumptions from the post 2 above this one.

This is more so that I am able to tell when a good deal actually comes up.

Thanks for taking a look!

Originally posted by @Ned Carey:

@Matthew H. At the asking price I don't think it is close to a deal. With expected rent for both units at $3,746,  it starts to make sense at $375K which is the 1% rule.  Of course you should use actual numbers for you final analysis. 

Thanks Ned. I am learning on how to properly run the numbers.

To me, the asking price is irrelevant. I am looking to find what the purchase price would have to be based on a good (enough) cash flow and cash ROI.

If I input $375,000 as the purchase price, while keeping all other assumptions the same, I get a monthly cash flow of $51.49 per door with a cash ROI of 1%. This doesn't look good (cash flow of ≥ 100 per door and ROI ≥ 10%) which is why I am wondering if my assumptions are too conservative.

Originally posted by @Allan Smith:

something seems off about those numbers. With outrageous taxes like that, I dont know how you would end up with $250 per month in cash flow. Dont forget 8% vacancy, capex, maintenance, insurance, and possibly mgmt. If cash flow is important I'd be a lot closer to $150k on that one.

It would be great for someone to double check my math and assumptions. I solved for purchase price based on getting a cash ROI of 10%.

The assumptions that I used to get a cash flow of $283.49 per door were as follows:

Purchase Price: $263,803 (the variable that I would like to solve for)

Down Payment: 20% ($52,761)

Immediate Improvements/Rehab: $10,000

Closing Costs: 2% of purchase price ($5,276)

Finance Amt: $211,042

Interest Rate: 4.749%

Mortgage Years: 30

Mortgage Payment (Just P&I): $1,101

Property Tax: $12,391/year

HO Insurance: $960/year

Utilities: $2,100/year

Maintenance & Repairs: $2,000/year

Vacancy: 5% of rental income

Property Management: 6% of income

CapEx: $2,544/year

My calculations then left me with a NOI of $20,013, Cap Rate of 7.59%, Cash Flow of $6,804, and Cash ROI of 10%.

Hi everyone,

I am practicing running numbers on buy and hold investments and would like your help.

Here is a duplex (two 2 bed 1 bath units) in Princeton Junction, NJ.

https://www.zillow.com/homes/for_sale/NJ/pmf,pf_pt...

Rentometer shows that a 2 bedroom unit in that area rents for an average of $1,873 per month.

Zillow shows property tax of $12,391 per year.

My question is at what purchase price would this generally be considered as a good deal?

I am more concerned with cash flow and ROI than I am with appreciation.

Using my assumptions, the property would have to be purchased for $263,803 to give a cash ROI of 10%, cap rate of 7.59%, and a cash flow per door of $283.49. Is this too conservative?

Thank you for the responses everyone. Some good information here.

@Jerry W., I completely overlooked the importance of learning my market. I have to look into this more as I am still unsure of exactly where I want to purchase. I guess that means that I should learn all of the markets in the general area that I am interested in (~30 min driving radius).

@Peter Hollyfield, driving around the areas of interest is a good idea that I have heard plenty of people talking about. I should definitely start doing this to get some first-hand experience with the area.

I have a degree in Mathematics and work with numbers daily so I definitely understand the importance of being comfortable with the quantitative side of things. That being said, I still have to work on my RE knowledge so that I can apply my background in Mathematics proficiently.

I'm all about fixing things myself and of course saving money!

@John Hickey, I have been analyzing some data (more for entertainment than anything else) but the data only went back to 2012. I'll check out city-data.com and see what they have.

Hello BP community. Newbie here. I am currently saving up for my first property. I plan on purchasing a duplex, living in one side with a roommate, and renting out the other side (i.e. the infamous house-hacking). FYI, I plan to purchase the property within 30 minutes of Princeton New Jersey (where I work). What do you recommend that I do while saving? I have been listening to the podcasts, browsing the forum, reading books, and analyzing deals (Excel nerd here). I want to use my time wisely now so that I am ready to go once I have the funds. Looking forward to hearing your opinions! -Matt