I would agree with what has been said above and will throw in my two cents:
1 - Off Market deals vary wildly meaning it could be $200,000 for $300,000 house or $500,000 for a $650,000 house. Either way, the margins are razor thin with limited selection.
2 - Break even has been considered a great deal in the Colorado Springs market for some time now and I am finding even these are getting harder to come by. In terms of appreciation, if you've purchase in the last 12 months or earlier then you've definitely won! In terms of the future, this is all speculation by the way, I believe properties will continue to appreciate but not at the same rate we've seen for 2020 or YTD 2021. In the last 3 weeks I've seen a hard slow down in the market which is good for Buyers while Sellers are still doing fine but they are not getting 10+ offers over a weekend like they did a few months ago. I will say that mid July to mid August is always the slowest selling season for me personally every year so that could be playing into it some. The competition isn't coming back which is a good thing in my opinion.
3 - Multi-family is the best option for cash flow. I like these because the properties coming to market are often with quite a bit of deferred maintenance and leases that haven't been turned over in years. This allows for the Buyer to turn the units over from a cosmetic standpoint and increase the rents which brings it to a cash flowing property within the first 24 months. Just keep in mind these need quite a bit of capital.
4 - The market is still going up and our listing inventory has a chance to catch up for a moment. We'll see if it shrinks again in the 4th quarter.
5 - Colorado Springs is a stable market. If you're in the flipping business then I think there is always the game of Russian Roulette involved. If you're like me and invest for the long term, then I won't really care so much what the next 10 years brings to a degree. I do believe I'll be fine as I am not over leveraged in an a relatively expensive market. Going back to the conversation of appreciation, the rents are definitely appreciating and I don't foresee that slowing down any. I am seeing some double digit percentage increases in my rents which is making my once break even properties very cash flow positive. Again, this is a long term play but cash flow does make me happy.
6 - I would read about State Bill 173 that is coming into effect in a couple days. This is a big win for tenants and a major downer for Landlords. Colorado becomes more and more of blue state every year. The initial legislation tried to bring in rent control but that eventually got shot down by the end of it. What did pass, along with many other items, is a limitation of rent increases maxed out at once per year. For most owners including myself, that doesn't matter so much. What does matter is they were initially trying to limit the increase for the unit, regardless if the tenant transitioned in that 12 month period. My prediction is Colorado will see rent control in the next 5 years. I've personally talked to two owners since the bill was passed who have owned their rentals for 10+ years that were looking for Property Management Services. After a conversation with them about SB173, they both ended up listing their properties for sale to take their money and run to a more landlord friendly state. Personally, I see these sorts of things in good and bad lights. The bad is obvious as Landlords continue to invest with one arm tied behind our backs. The good part of this for me is about supply and demand. Both of these owners removed their properties from the listing inventory in town. Since they were single families (condo and detached single family home), they will sell for prices too high to be picked back up by an investor, thereby getting sold to an owner occupant Buyer, thereby restricting supply, thereby increasing demand for my investment properties, thereby increasing the rental rates and my cash flow.
7 - Thank you for the shout out @James Carlson. I am biased with the Colorado Springs Real Estate Investor Association given I am one of the hosts. We meet monthly and usually have 50-60+ people attend. The group always varies from people who don't even own their own home yet to some who've been in the industry for years.
8 - I haven't seen any good FB groups out there. Even ours isn't great as its more marketing than any real deal share. Since the wholesalers are having zero problems moving their inventory they don't have any need to post what they have on FB.
Colorado Springs is a great place to live and play! No longer as cheap as it once was but I still promote BUY NOW! In my opinion, the values aren't going down so you have to start riding the wave at some point in time.
