All Forum Posts by: Robert-Lee Pass

hey man, i was also fresh starting out and just want to say you should keep running different property over and over. i think about on my 40th or so i had one deal that the numbers were so DRAMATICALLY different than everything else Ive seen it lit a fire under me to go get it . I walk it tomorrow !

i guess that's what they say when you run enough reports you will start to KNOW what a good deal is. just watch the FOMO when you do strike gold. I'm battling that curently

So there's this deal right , Class B new build in a growing new community with a k-5 school to boot. I was mainly focused on the Class A but they are 175K more for 2-300 sq ft + garages and only get 200$ more per rent per side (this is a 2023 duplex - No garages 3/2/0 1100sq ft per side. these are day 1 numbers with base case rents (rents on a class b are supportable by section 8 where as the other more expensive units would be too much for the same 3/2 .

So Ive ran about 40 properties so far maybe more and this is the first one where the numbers are looking DRAMATICALLY better than anything else . especially the top tier class a duplex in the same neighborhood. the cash to close is really skewing the returns.. anyways , what do you guys think?

This is my first investment property beyond my primary residence.

I really think im having a problem evaluating property because i feel like its not somewhere i would love to live myself.. does that make sense? my current house fixtures , having a wife and 2 kids , a 3/2 1100 sq ft just seems rough. but there's more than just people like me in the world so i should forget all that right? that fear turns into vacancy fear. the vacancy rate in the neighborhood is 1.7 so i used 2 . if i go to 3 it turns coc to 27 and -25$ cashflow from shown

Overall goal is to hold forever, Cashlow at 66 and beyond with complete debt paydown , pass to kids when i die , they use the cashflow for their primary residences and beyond. (10 of these will do haha... but really)

so 100% the section 8 pay is the same on a single family unit as well as a multi unit ?? is that true as long as they have matching bed/bath counts? I just realized they don't care if there is a garage or not either

Hey everyone so real quick Ive got a question about Section 8 . First of all what is your thoughts on using the section 8 fair market rent number as the comps for what i can get for a unit , and secondly will section 8 care about a garage or the square footage of the unit ?

I believe sq footage doesn't matter and its only Bed/Bath count that do but what about the garage ?

SECOND : I was doing research on the actual Max allowable rent for a particular county. I am finding numbers that say 1500 across the county and then i see numbers that say something completely different when I go to HUDuser.Gov. I want to believe the data they are showing but the top line they show is actually the zipcode i live in 80817 and its showing 3400 for a 4 bed when a 4 bed here is only 2400 market so I feel like that error means i have to scrutinize the whole data sheet.

If anyone has a second would you mind researching really fast as to what the Max Rent amounts are for Zipcode 81007 3 bed 2 bath (I'm seeing 1500 on some and 1840 on others , but that 1840 is what a new build class A rents for in that neighborhood / Zip. so its got me questioning. 

Thanks everyone .I'm about 2 months out from closing on a duplex . rental comps are currently 1600 a side for one of the units I'm buying .. I'm trying to see if 1500 is the Section 8 amount or 1850 because its right there on my comps of 1600 .

Quote from @Max Ferguson:

Hey there, I would be happy to give you my thoughts on your strategies if you want to set up a call. 

the underlined statement is completely incorrect though unless I am misunderstanding:
" Nearby Rural: Limited development might mean slower changes to the landscape but potentially fewer surprises. The location is growing and its the safest city in that entire county. home-ownership rate is very high like 85% most of the homes were built in the last 24-36 months. Currently only 30 people per mile "

Pueblo and Pueblo west are the same city. Pueblo West has tried to become a city independent of Pueblo but were unsuccessful. I encourage you to look at crime statistics for the entirety of the city......

With that being said a ton of my colleagues do flips, buy and holds, new builds, etc.. in Pueblo West. Much better cash flow than the springs but will incur far less appreciation IMO. I am personally considering buying multifamily there in the future as well. 

If anyone knows anything different feel free to chime in if I am missing something. Both have pros and cons and it is great to see the research you are putting into it!

Feel free to reach out whenever. I also have a friend looking to offload a large number of multifamily doors in the Pueblo area, not sure how many he has in Pueblo West though. 

Good luck man, you'll crush it regardless of what you decide!

Hey man , nice to see you so local . I should have an FA number in the next 3 months as well , that'll be cool ill keep your name in mind in case we cross paths haha.
So what would pueblo west be considered? a SubDivision? I do see the mailing addresses sometimes of pueblo west are still pueblo maybe a township or something? but that's too small too .
Your saying Pueblo west is to pueblo as Security-Widefield is to Colorado springs ? or How fountain (where i live now) is to the springs?

I can see what your saying if i compare security and the springs proximity. but again security widefield is very different from other places in the springs no? So i guess what i was trying to say was its the highest median income as well as the safest ZIPCODE in that county? that feels more correct to say. thanks for that

Quote from @Alecia Loveless:

@Robert-Lee Pass I have been investing in a more rural area for a long time. In about a 50 mile radius of 6 towns there’s maybe 45,000 people if even that many. We are surrounded by state and national forests as well as several ski mountains and golf courses.

The largest town has about 9,000 people and does have a Home Depot, Lowe’s, Walmart, Applebees, and a 99 Restaurant which is New Englands version of Chilis.

While the cost of entry is much less than towns farther south in my state things still start around $350,000 now. When I started back investing 4 years ago the price point was somewhat lower.

I have seen significant amounts of appreciation in the past four years but prior to that the area was still seeing 5-7% per year in appreciation.

I don’t see anything wrong with you buying the new construction property in the “rural” area if that’s what you’re leaning towards. As long as you take into consideration the possibility of a slightly longer vacancy factor in your calculations I think you should be fine.

You say you want this as a long term hold property and you never know what may happen in the next 10-20 years. People may flock to Pueblo West to get out of the city. This duplex may become the best investment ever!

 thank you for your words I appreciate it :)

Quote from @Jaron Walling:

@Robert-Lee Pass What's the cost to build and what is the monthly rental income for the duplex? Assuming you're living in a unit a new build as a rental can be challenging from a numbers prospective. Not many investors will encourage you cash-flow negative and pray for appreciation to save you in 20 years. That's my outsider opinion. 

I glanced at your numbers and the property taxes are about $2k per year. That feels incredibly low. Our rentals in Indy have higher property taxes. Every market is unique so maybe Colorado is less but I was a bit shocked by that. Cheers. 

 Hey  man, yeah Colorado has a 0.45% tax rate on purchase price. so taxes are correct. 
As far as cost to build . i will be buying it finished turnkey ready to go , I will be moving out of my current house leaving the wife and kids here and going to that duplex myself on one side. It will take 1200 a month from me to live there too and then it will cashflow +3-400 a month once I move out , rent the other side and move back home . so its not appreciation I'm counting on to save me just the fear i can get it rented to a tenant for a year plus is whats got me scared haha.

Quote from @Theresa Harris:

Depends on the area.  Find out the cost to build a garage.  Where I am it would be about $20-30K. It gets too windy where I am for one of those covers from a box store to work (they'd blow away and end up down the road-and that did happen to one person). Lots of people seem to use their garage to store stuff rather than park their car.  The house should be priced less due to the lack of the garage.

 Yes sir market rent difference is 50-100$ per spot per unit (so i 1 car is 50 less than a 2 can and no garage is 100 less per side. About the wind i do live in Colorado but i assume we connect the carport to footings and anchor it for something like this .. plus permanent install translates to a permanent land improvement instead of just sitting it down on the ground and calling it a day

Quote from @Brandon P.:

Quote from @Robert-Lee Pass:

Hey everyone , real quick, i just came across a decent deal price wise (-175K from comp with garage) its a 3/2 duplex 1100 Sq Ft  but has no garage or car cover. thoughts on demand for something like that or challenges ill run into with that decision

Hi Robert-Lee,

If you think the deal is good, but just missing a garage, I wouldn't worry about that. Worst case scenario you could just buy a carport at Lowe's or Home Depot for a couple thousand dollars.

Best,

Brandon

Thanks for your words. Yes the deal seems to be pretty good 17-27% CoC depending if seller covers closing or not.

I'm thinking a 2 car carport about 5-6k quality level and a fence installed i bet this thing would hold a tenant nicely .. I think I'm going to give it a shot . the cash to close is so low i feel i cant go wrong

Hey everyone , real quick, i just came across a decent deal price wise (-175K from comp with garage) its a 3/2 duplex 1100 Sq Ft  but has no garage or car cover. thoughts on demand for something like that or challenges ill run into with that decision?