Our client was a buy/hold investor from the United Kingdom. He had three properties in the Denver area and sold one to trade up to a multi family property.
He came to us with only 3 weeks left on his 1031 exchange identification period and wasn’t able to visit Denver for the purchase. We found him a duplex on the Denver/Westminster border, and he closed with two tenants already in place.
This property closed Q3 – 2020.
Investor Profile
- Seasoned Buy/Hold Investor
- Lives overseas and needed help, because he couldn’t visit Denver due to COVID
- Has been investing in Denver for 6+ years
- Looking for multi family
- Wanted a 6%+ CAP rate
- Listen to the podcast “#246: Deal Analysis – Wheat Ridge 1031 Exchange Duplex” on the Denver Real Estate Investing Podcast
- Watch the YouTube video (at the bottom.)
- Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast or video.
Deal Quadrant: MLS
Read about the deal quadrant and finding Denver Rental Properties.
Investment Property Details
- Type: Duplex
- 3 bedrooms, 2 bathrooms in each unit
- Location: Berkley North by Hidden Lake
- List Price: $589,000
- Purchase Price: $570.000
- Why we liked it:
- On the market for 61 days
- Renters already in place with 10 months left on lease
- West of I25
Property Contract Details
- Finding the property: Buyer was on a tight timeline with his 1031 exchange identification period expiring soon. We found this deal on the MLS.
- Under contract: Under ask
- Inspection Concerns:
- Issues with a deck that needed fixing
- There were some structural concurs
- Inspection negotiation outcome:
- Deck issues negotiated into concessions
- Structural engineer was brought in to certify the structure
Property Financing Details
- Lender: Conventional
- Loan Type: 15 year ARM
- Appraisal: at value, no issues
- Seller Concessions: $5,610
- PMI: N/A
- Interest Rate Buy Down?: No
Spreadsheet Rental Analysis
Property Operating Expenses
First Year Returns
Conclusion
Given our short timeline, we were pleased to find a deal that was a great fit. If we had not been able to deliver this for our client, there would have been a tax liability on the 1031 exchange.
Check out our 1031 Exchange Denver Guide to learn about 1031 Exchanges in Denver.
YouTube Video: Rental Property Analysis – Wheat Ridge 1031 Exchange Duplex
Podcast: Play in new window | Download (Duration: 22:14 — 25.4MB)
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