All Forum Posts by: Scott Trench

Chat is finally live for ALL BiggerPockets members, Pro, Plus, and FREE!  

In the bottom right corner of your screen you'll see the blue "Colleague Chat" box. Go ahead and send one of your connections a message and try it out!

If you find any bugs or errors in the messaging system, either reply to this thread here or send them to me (perhaps via chat ;) ).

Also - Special Thanks to @Robert Perry and Edd Morgan for putting this together!  We hope it helps everyone network and do more business!

To learn more, watch this quick video:

Hi Basilio!  Could you please send me an email ([email protected])?  Please reply with any and all email addresses that you may have used to sign up with!

@Account Closed

@Account ClosedIt looks like you might have two accounts - is this you as well:

http://www.biggerpockets.com/users/EugeneD3

If so, let me know and I can close this non-pro account.

Just wanted to let everyone know that Pro and Plus users can now chat with any BiggerPockets Members that they are colleagues with! 

In the bottom right corner of your screen you'll see the blue "Colleague Chat" box. Go ahead and send one of your connections a message and try it out!

If you find any bugs or errors in the messaging system, either reply to this thread here or send them to me (perhaps via chat ;) ).

To learn more, watch this quick video:

Oh, and here's my first chat with Josh:

@James Felder

This is a really interesting post.  Thanks for bringing it up.  As I see it you have a property worth $335,000 and cashflowing roughly $645 per month. Let's assume that you have roughly $225,000 in equity in the property (assuming you financed it at 20% down when you bought it at $155,000, and have been paying the mortgage down steadily for 5 years).  Your cashflow, therefore is generating you about a 3.5% return on your equity.  

Let's also assume that in addition to that cashflow you are paying down your mortgage at a rate of about $300 per month - another 1.5% return on equity.

As a Real Estate Investor, I'd hope that you are looking for 10% + total returns on your invested capital, unless you have a good reason for holding on to the property.  That means that you will need the condo to appreciate in value at at least 5% per year for every year that you hold onto the property without selling.  

Now we enter speculation mode.  

It is my belief that a reasonable person can expect Denver property values to appreciate at a rate of 5% or more for the next decade or so - we've got a great, booming economy and lot's of infrastructure being developed.

That said, I believe that you are investing in the one asset class that I am skeptical of in terms of long term appreciation potential here in Denver - condos. 

Currently, we have a tremendous shortage of condos due to some questionable builder defect laws and opportunistic attorneys that have made a killing suing builders for relatively minor problems.  What this has created is a marketplace with a tremendous number of apartment complexes that are easily convertible to condos.  After a holding period of 7-8 years (after which the builders are less likely to be sued through the silly laws currently in place), these complexes will likely be sold off to homebuyers as condos and the condo will no longer be an endangered housing type here in Denver.  

At that time, I see condo prices falling back down to earth.  

I think now is a wonderful time to sell condos, and if I had one to sell, I'd be unloading it.  I'm skeptical of the potential for those assets to appreciate at a rate of 5% or more of the medium to long term.

In my view, just because this property won't cashflow doesn't make it a bad deal, or even a bad investment.  This is NOT the midwest, and if you don't at least acknowledge the fact that Denver is a growing city, you will miss opportunity.  

I'll repeat; Unlike rust belt cities, Denver is growing.  In fact, it's BOOMING.  Go walk around and talk to folks.  It's amazing how many people are moving here after college or from each of the other 50 states.  They are moving here in the hundreds of thousands - they are young, and they are educated.  The market is taking this into account and responding with enormous buildings going up all over town, rising rents, and rising prices.  Hell, the government is even responding and pouring billions and billions into infrastructure projects like light rails and new parks.

This particular property is sandwiched between two excellent parks, is just a few blocks from one of the largest and best maintained highways in the country, and is less than 5 miles from the heart of one of the fastest growing cities in the country.  

Even if the Denver market is absurd right now, it seems like a pretty safe bet that land in that particular neighborhood will at worst hold value, and will most likely continue to increase in value at impressive rates over the next few years as Denver continues to boom. Do you think that folks will want to live there five years from now? I do. 

Also - keep in mind that Denver has limited room to grow - at least going West.  It's pretty expensive to live in the mountains, and as much as people like to talk about how much they love mountains, remarkably few people actually live there.  Land West of Denver, especially within a few miles of downtown, is probably a decent look.  

I'm not saying that I would buy this property personally.  But I am saying that I am happy to consider low cashflow properties in awesome parts of town, ESPECIALLY if I plan to live there as a house hacker.  

It will be interesting to see who's laughing in 5 years when this property sells.

@Joli Vang

 Welcome to BiggerPockets!  I think that you are definitely getting started in the right way, and I hope to see you at the Denver Meetup next week!

I like how that very first article had some too-appropriate/accurate foreshadowing...  Great job @Joshua Dorkin !!

 @Marcia Maynard

Hi ladies!  I went ahead and launched another campaign for the woman's tee.  I edited the original post so you can find it there, OR you can just click here:

http://teespring.com/biggerpockets-woman-s-tee

Hope that helps and my apologies for not considering that ahead of time!