All Forum Posts by: Robert-Lee Pass

the way I'm looking to do it on just a duplex for about the same price with rents in line with your analysis . The first year ill be only collecting one sides rent as i live in the other, it offsets but doesn't eliminate the payment until i move out and rent out the other side. Still wont cashflow like crazy but itll be decent and not an alligator

Quote from @Charlie Moore:

Wrapping up a new construction duplex right now. Torn between selling and keeping. Want to keep it, but when I account for all expenses the cash flow is really rough. My question is...how much should I allocate/factor in for Cap x and monthly maintenance on a new construction? Lessening those %s obviously greatly helps my monthly numbers but I don't want to run them too low. I plan on doing a 1031 in a a few years so in all likelihood I wont be addressing any of the bigger ticket items. Hope that makes sense. Thanks! 

 
Great Question! Im in the same boat. Im buying it tho not building it , i
literally just made a post asking if the deal was "Good enough" a
minute ago because of cashflow.

Hey everyone so just a short overview, this is a New build duplex in a class A neighborhood , buying semi low money down so cash-flow inst the greatest. Keep in mind this will be a 30 year or forever hold with appreciation the ultimate goal and cash flow at year 20-30 being retirement income (hoping to stack 10 of these if i can)

Here's the numbers, I'm planning to close in April i just got back from taking the wife and kids to the build site, they approve so that's nice haha.

My thinking is account for all expenses and hope that it being a new build will save me some time before having to perform cap ex style repairs (I do have about 50K cash on hand after the closing of this property so i feel comfortable with handling curve balls for a few years) New Build structure and neighborhood/school gives me hope that in 30 years i can still command a decent rent on a property 30 years old instead of trying to take something from 1970 all the way to 2055 and still get decent rent out of it . Vacancy rate is 1.7%

Cash Flow - My thought is 4-500 isn't much every month BUT that is a cushion for a property tax increase or insurance premium bump, maybe Even if i cant rent it for my conservative estimate then i still wont go red on the month holding it, it'll just be maybe 100-200 cash flow a month instead.

Thanks for taking the time if you've read this far. thanks for your input.

Quote from @Jennifer Reinhardt:

Hi Robert!

Yes, lots of people invest in Pueblo West. Having a building that needs less work at a lower price point is a good way to start. I have helped several investors invest in Pueblo West and their properties are doing well. I could run a pro forma on the building if that would help you, so you could project the returns. Out of hundreds of properties, my team chooses a few that will work and then we can help with management as well. Choosing the right property is key! The money is made on the purchase. Advice I would give: Look for a building without an HOA or owner occupancy requirements. Be sure to do a full inspection before closing. Make sure you run the numbers properly so you can have reserves and the property will cash flow.

Congrats on looking to expand your portfolio this year! That is awesome!

Hey Jennifer , thanks for your reply , I agree with the newer building benefits you mentioned. The property wont be in an HOA and there is no owner occupied requirement. I have been in close contact with my lender. I learned a couple days ago I only need reserves if I use the rental income to offset the DTI, they require 6 months of 50% the new PITI payment in reserves for a Duplex if i had to use the rent from one side to qualify.
Either way I have the funds just didn't know that was the written rule until the other day.

I actually made a mistake too when running the Pueblo west Neighborhood scout report. I didn't realize that area was broken into 5 different neighborhoods South of 50 , When i just typed it in and assumed , it gave me the 5 acre lot homes north of 50. that's why population per mile in that original report i posted was Rural density.

As far as Pro Forma on properties I'm actually able to do that no problem but thanks for offering. Ive got all the paid services active right now as far as data , rent estimators, prop stream, data vendors etc. just straight comping rents will work too as there is 6 other exact same builds in the neighborhood recently sold (wish I could see the concessions it sold with). I'm even assuming -150 less on rents per side from the highest comps and the agents pro forma estimations. Comps just didn't support it yet , maybe I cant see old filled listings from last year but I'm going to call a couple owners before pulling the trigger using SkipTracing haha.

I am unrepresented on this purchase , I'm actually on hour 82 of the 168 required to get my broker license, I'm on track for March Completion then exam April. If you were to actually find me a property I wouldn't mind working with someone on the buyer side as long as you walk me through the paperwork and process allowing me to learn a little along the way. (I'm only getting my license for knowledge and to broker my own personal deals and family's deals with he goal of 1 a year + all funds from being a broker go into the next property. ill be full-time outbound prospecting based.)

And for anyone wanting to see the correct data (only a 30$ mistake lol) Here you go below!

I'm sure ill head back here for more insight when my stomach turns upside down just before I make an offer. Have a good one.

Thanks everyone ,
- Robert-Lee

Quote from @Sam Dangremond:

Yes, lots of people invest in Pueblo and Pueblo West - including myself.

All that really matters is buying at a reasonable enough cost so that your rents after all expenses get to like a 7 or 8% stabilized yield on cost.  

How long have you been investing there? are you in this specific zipcode yet? That 7-8% , is that Cash on Cash your talking about or Cap Rate?

Quote from @James Carlson:

@Robert-Lee Pass

Pueblo West is super popular, especially with out-of-state retirees looking for a more affordable western destination. My wife/business partner and I are city people (lived in Denver forever and now Colorado Springs) so we don't personally love the Pueblo West area, and to make our lives, we invest only in places that we like and would want to live personally. But that doesn't mean there isn't opportunity down there. I'd connect with some people who've invested there and a realtor who knows the area.

Yeah the wife and i feel the same . Shes from Florida I'm from California we live in the springs and we wouldn't want to leave here to move there. that's sorta whats been holding me up with who exactly these tenants will consist of. The new build aspect i was hoping might give it a leg up for tenant quality.

Ive been chatting it up the 2 different listing agents of property i was interested in. I would love to talk to someone that's been investing there. just have to find them first.. i was thinking of skip tracing other new build duplexes and calling the owners cold.. tell them what I'm thinking, I'm looking to enter the neighborhood in that capacity .. etc. see if they support it and what the rents they are getting are. I don't trust the agents pro forma.

Quote from @Tanner Pile:

Hi @Robert-Lee Pass, 

I like the southern Colorado markets for long term appreciation plays. You can find some areas that cash flow but it won't be much unless you operate it as a short term rental. Is this duplex in Pueblo west?

Yes it is . South side of 50 north of the reservoir. The cash-flow isn't the best but it is the most expensive area of pueblo.. Lots of great looking single family houses out there too. but even then, buying new at 390K on a non duplex still wont cash-flow on a 3/2/2 1300 sq ft

I made a post over in the Starting Out section but it didn't get much traction. Really looking for feedback so I'm giving it another shot in the general forum.

Colorado Springs Metro vs Nearby 'Rural" was the Title. Trying to just get straight to the point this time. 

The response I got was to never invest in anything rural.. but then i felt like maybe my definition was incorrect. just to clarify I would have never considered this place Rural in the literal terms. I only referred to it as that because when I ran the neighborhood scout report it came back saying density was "rural" level.

(Link to old thread .. no need to click just linking it --> https://www.biggerpockets.com/forums/12/topics/1166206-seeki...)

Ill try to attach the report here to this thread not sure if i can do that .

below ill also give some general stats so you have a better idea of the "Rural" I'm talking about. I'm looking to purchase a new build in this zip code. maybe ill be getting in before major expansion? maybe its at its peak now ? etc etc

Population of Zip code : 34.3K as of 2022 Dec +4% from Prior year +11% from 2017
Population of County : 169k as of 2022 Dec (Comparison to the Colorado springs El Paso county population of 740k)

Because this will be my first Multifamily as well as my first time being a landlord (Just not my first time purchasing a house. currently about to leave my previous house hack into this duplex) , I'm very much in love with the idea of very low CAP Ex Repairs needed in the first 5 years, the tenant quality applying to a new build unit in a new community, Just a much nicer and newer product for the money . I'm 30 years it would be nice to have a property that rents like a 1995 house does today and not a 50-70 year old property like a 1970 would be at year 30. Location of the unit is right up against that Lake Pueblo State park too. I actually frequently go there with the family in the summer.

I would greatly appreciate any experiences, advice, or considerations that could help me weigh these options more effectively. Have you invested in either a Local Metro or a Nearby Rural area? What factors did you find most crucial in making your decision? Any lessons learned or pitfalls to avoid?

Thank you in advance for your input. I'm looking forward to a discussion that will hopefully guide me toward making a well-informed choice.

- Robert-Lee