Deal Analysis – Family Nomad™️ in Littleton Townhouse

This deal analysis breaks down how a family of four is using the Nomad™ real estate investing method to start building their rental portfolio for retirement planning. They found a great property that fits their personal needs and investing needs. After they move out, we’re estimating a small positive cash flow which is great for only putting 5% down.

This property closed in Q4 2019.

Investor Profile

• Young family with two toddlers
• Second property. Converting first to rental
• First rental needed updates to achieve max rent
• Cash out refi on home #1 to fund this property and future down payments.
• Staying in Littleton, CO for family and schools
• Goal: 3/2 or greater with a low price point in tight geographic area.

Deal Quadrant: MLS

Read about the deal quadrant and finding Denver Investment Properties.

Investment Property Details

• Type: Townhouse, end unit
• 3 bedroom, 4 bathroom
• Location: Wadsworth & Coal Mine Ave in Littleton
• List Price: $321,900
• Purchase Price: $322,500
• Why we liked it:
  • Low HOA
  • End unit
  • Zillow renovated property
  • Move-in Ready
  • Location works for the client
  • New Appliances
  • New Paint
  • New Carpet

Property Contract Details

• Finding the property: Spent a couple of months looking at properties to understand the market while renovating house #1. Multiple offers on this one.
• Under contract:  Above ask and secret sauce
• Inspection Concerns:
  • None (minor stuff)
• Inspection negotiation outcome:
  • None

Property Financing Details

• Lender: Conventional
• Loan Type: 5% down conventional
• Appraisal: at value, no issues.
• Seller Concessions: 0
• PMI: Prepaid
• Interest Rate Buy Down?: Yes

Spreadsheet Analysis – After Move Out

Property Operating Expenses

First Year Returns

Conclusion

We’re estimating $697/yr in cashflow after they move out. I’d consider that about break-even. Keep in mind, that’s not just paying the mortgage but also paying insurance, taxes, vacancy, HOA and putting money aside for repair reserves. Some investors look at this and scoff at the cashflow, but they are not focusing on the big picture of building a rental portfolio.

What do you think of this deal? It’s an A+ in my book when you consider they are balancing the needs of a young family. Their family is happy, and they are one property closer to their retirement cash flow goals.

Video: Deal Analysis – Family Nomad™️ in Littleton Townhouse