All Forum Posts by: Rick Watt

Hi @Sean Mentzinger, sure thing.

Chris and Charles' strategy (or at least one of them), is to look for single family attached homes that are on the MLS. They have found that in the Denver market these have the best CAP rate and COC returns. I bought into their strategy and decided to go looking one weekend at a number of different properties. I didn't think I'd find anything worth putting an offer on, but the third house in we found a gem.

We found a fix and flip that had been on the market for about a week.  It was originally listed for $250k, but had been reduced to $235k.  It's 1862 sq. ft., a 3 bed, 2.5 bath condo with a 2-car garage.  New carpets, flooring, granite countertops, stainless steel appliances.  It has an area that can be easily (and cheaply) converted into a 4th bedroom, which made it a great find.

Chris and Charles use a spreadsheet developed by one of the local lenders in Denver (very similar to the calculators on BP), so we just plugged in the numbers on my phone while on-site. I did look at a number of deals they had closed over the past few months and watched several of their webinars on how they analyze the numbers. So while on site it was extremely easy to plug them in and get an idea of the CAP rate, COC and monthly cash flow.

Annual cash flow should be a bit over $7,000.  I'm still debating if I'm going to try and rent it out myself or use a PM company.  I travel every week for work, so likely the latter.

Regarding negotiating, we were originally going to put in an offer at $230k, but when my realtor talked to the seller's realtor, they said they were expecting a full price offer to come in. We thought this a great property so I was fine coming in a full price. We went in with a full price offer and the seller came back and said they were expecting a cash offer at nearly full price, but would consider ours if we were at full price and could close by 12/22. We put in the offer and they came back and said they want to take our offer, but wanted us to include an appraisal shortfall clause in case the appraisal came in low. They also mentioned they couldn't get an FHA loan with a previous buyer. This made me nervous, but I went back to the numbers and was ok with it at $235k as it cash-flowed great, so we went ahead with it. They accepted our offer and the appraisal ended up coming in at $255k. Phew!

I think I'll be looking to get another rental as soon as I can find a good one and am also looking at Multi-family Syndication.

Thanks everyone for the congrats, I'm very excited.

@Suzette Brathwaite, congratulations to you as well!

Thanks @Will Kirkendoll.  Definitely what I kept reminding myself - just take action.  

Thanks @Account Closed.  Once I figure out how to rent this one out I'll be on the hunt for another.

I found BP about two months ago and listened to BiggerPockets Podcast 247: How to Buy Your First (or Next) Property by the End of the Year [The 90-Day Challenge!] with @Brandon Turner and thought there was no way I could begin my investing career and purchase a property by the end of the year.

I was wrong.  With the help of @Chris Lopez and Charles Roberts at Your Castle Real Estate I was able to find a great condo in Aurora (Denver suburb) and just closed on it a couple hours ago. It's an 8.3 CAP and very typical of the properties Chris and Charles are able to find in the Denver Metro area.

Thanks BP and my great real estate team.

@Chris Lopez, I'm registered.  Thanks for setting this up, looking forward to this event.

Thanks.

Rick

@Gregory Flores, Jr. and @Jeremy Swathwood, I'd be up for that.  My travel schedule is all over the board, but would love to get something going in our area.  If we can't a meet up going soon, let's plan to meet for coffee in the next couple of weeks. 

Jeremy,

@Dmitriy Fomichenko just setup a Solo 401K for me and I'm very pleased.  His team is great to work with and the process could not have gone smoother.  I have a good CPA in town, but I haven't talked to him about his experience in dealing with these types of accounts.  I plan to do that shortly and will let you know if he is someone who can help.

I live in the Farm as well.  I'll send you a message about meeting up sometime.

Rick

@Gregory Flores, Jr., welcome.  I'm new here as well and really enjoying all of the information and help from other members.  I'm at Parker and Arapahoe so probably not far from you.

@Jim S., sounds like a good strategy.  Thanks for the input.