Charles and I just wrapped up the June roundup webinar (our monthly “let’s grab a virtual cup of coffee and talk Denver real estate investing.”) No webinar recording this month! We had technology issues about halfway through. Below is the summary or you can listen to the recorded version on our podcast channel (Episode #40)
Denver Monthy Market Snapshot
The infographic is from REColorado and compares May 2018 to May 2017.
Commentary: Not much has changed in the market. It’s still a seller’s market with high demand and low inventory. Charles guesses the higher number of listings might be from people pushing the market and asking for too much. We don’t really know! We did have fun speculating about what the market will do one year from now in May of 2019. Our guess, probably more of the same.
Wait or Buy Now?
I asked a question to Charles about waiting for the market to turn vs buying now. We have lots of investors asking what the market will do (we don’t know or pretend to know.) Charles and I both have an attitude that is similar to stock investing. That’s to dollar cost average your Denver real estate investments since it’s impossible to predict the market and foolish to do so!
As Charles discusses in his Advanced Real Estate class (check the calendar for future classes), leverage is the key to getting great returns in real estate. He has data that compares buying at the best time during the crash to now that shows you can get similar returns by using leverage.
Investing Indicator: Denver Renters Are ‘Demanding’ and Want In-Unit Washers and Dryers
From the Denver Business Journal 6/28/18:
Denver renters have been described as “demanding,” and the one feature they want — in-room laundry — is the hardest to find.
That’s according to a new report from Apartment List, which indicated that 65 percent of Denver renters are looking for units with washers and dryers, but only 26 percent of units have them.
On the other hand, Denver renters aren’t really looking for cat-friendly units, which is the most oversupplied amenity in the city.
“Renters in Denver are more demanding than those in other parts of the country, with renter demand above the national average for eight of the 10 amenities we analyzed,” Apartment List said in a statement, adding “we categorize Denver as having too many amenities. Renters are likely to have an above average chance of finding all the amenities they want, and an above average chance of ending up with extra amenities that they don’t want.”
Commentary from Charles: Washer and dryers are about 47th on the list to worry about! He puts dishwashers at 44th on the list. From his experience, he doesn’t supply the washers and dryers. If previous tenants leave them, he gifts them to the new tenants and tells them the have to deal with issues. Charles did an analysis of his portfolio and is at 0.8% vacancy over the last four years.
Deal #1: Duplex Listing in Aurora
Charles listed a duplex for a client at 323 S Yoast St. Aurora, CO 80012. MLS public remarks:
Come see this fantastic duplex on a gorgeous tree-lined street! These units have great layouts, large kitchens and beautiful hardwood floors. Each unit has a full basement with two additional bedrooms. One basement has a full bath and the other a 3⁄4 bath. The units are separately metered for gas and electric and have their own washer/dryer hookups. Each unit has a large, fenced backyard which your tenants will really appreciate! Quick access to 225 and shopping. Check out this wonderful investment opportunity, you’ll be glad you did!
- 4 bedroom (2 non-conforming, no egress window, but easy add) and 2 bath units
- Each unit is 1,845 sq ft.
- Market rent is $2,000 per unit
Download the MLS data sheet.
Deal #2: House Hack in Aurora
Denver House hacking is a great way to build wealth. One of our clients is buying his second house hack. A few years ago he purchased a duplex and is ready to buy another property to continue to build his rental portfolio. We had another property under contract a few weeks ago, but the inspection report came back with numerous health and safety issues (electric panel falling off, gas lead, shot sewer, etc) and the sellers did not want to fix or negotiate anything. Terminated and moved on.
Address: Exact address omitted for privacy. It’s in North Aurora, north of Colfax and west of I-225 and UC Health and the Children’s Hospital.
- 5 bed / 3 bath house with a detached 4 car garage (currently rented at $300/mo by the previous owner.)
- Full kitchen and 3 bedrooms upstairs.
- Small kitchen, 2 bedrooms, and a separate entrance.
The house hackers will leave in the basement and rent out the top unit to maximize rental income. It’s a short-term sacrifice for long-term wealth creation.
Creating your real estate investing plan and putting together your team can be a daunting task. That’s why we offer a free investment consultation to anyone – with no obligation or “hard close” at the end.
Our approach is simple – just have a conversation where we can ask you questions to get a solid understanding of what you want to accomplish with investing in real estate. Then, we’ll start helping you put together your investing plan.