3 Bedroom Townhouse in Colorado Springs for $300K
Last year, Realtor.com named the 80911 zip code in Colorado Springs the hottest zip code in the US, thanks to its affordability and quality of life. This is a great area for investors to look at, since the housing is less expensive than the Denver metro area, and it’s highly sought out as a place to live. New investors Chris and Christine Dewhurst started searching in that area for precisely this reason, and realtor Leah helped them purchase their first investment property. The process went so smoothly, they’re already looking into purchasing a second property. Listen to the podcast to find out what you can get for 300K in Colorado Springs.
Three Learning Options!
  1. Listen to the podcast “#39: 3 Bedroom Townhouse in Colorado Springs for $300K” on the Colorado Springs Real Estate Investing Podcast
  2. Watch the YouTube video (at the bottom.)
  3. Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast or video.

Investor Profile 

Chris and Christine had been toying with the idea of real estate investing for some time.  They knew their Denver home had quite a bit of equity and wanted to figure out how to make it work for them.  Thanks to a Covid-induced delay, they had a lot of time to think about where they wanted to purchase a home, at first focusing on Denver and then looking at out of state prospects.  They settled on Colorado Springs after Christine kept coming across it on lists of the best places to live and work.  

When looking at potential areas to invest in, they focused on places that had a university, hospitals, and major employers.  A bonus for Colorado Springs is the military presence.  Even during a downturn, military housing stipends stay the same, so vacancy rates aren’t as affected.  

Long Term Real Estate Investing Goals

Chris and Christine are focused on the long term benefits of investing in real estate.  Their plan is to start building their portfolio and have it supplement their retirement down the line.  They are mostly focused on returns that will come in 10-15 years.  

Strategy for Achieving Goals 

They just purchased their first investment property and are making plans to move ahead with their second.  They want to steadily add to their portfolio in the coming years, ideally owning 10 or so properties eventually.  

Investment Property Details

This is a 3 bedroom 3.5 bathroom townhouse in the Security community of Colorado Springs, on the southern end of town.  

Appealing Features of the Property 

The house was in their price point and in great condition, which appealed to them since they didn’t want to put a lot of money in on the front end.  The number of bedrooms and bathrooms, as well as the large square footage, made this townhouse attractive to Chris and Christine and to potential renters.  

Property Contract Details

Contract

The house was listed at $289K and they put in an offer at $300K.  There were 10 other offers, but the seller went with theirs because it was cleanly written and was assessed to be the best path for getting to closing.  As we note a lot on our podcast, price isn’t everything.  A lot of times good terms will increase a seller’s comfort level and they’ll pick that over a higher offer.  

Inspection Issues 

A lot of little things came up during the inspection, but their offer said they wouldn’t object to anything under $500.  Some of the issues included a furnace that needed to be cleaned and a dishwasher that required a repair, but nothing crossed the $500 threshold.  Leah was with them during the inspection explaining what these findings would cost and had people lined up who could help them resolve the issues.  Surprisingly, the seller agreed to fix a lot of the things that came up, even though Christine and Chris didn’t ask for it.  

Property Financing Details 

Stabilization: Plan v Reality

The pro forma for rents in that area is $1700 a month.  Chris and Christine were able to find a tenant at $1750 and start their lease about 2 weeks after closing.  

Spreadsheet Analysis 

Rental spreadsheet analysis colorado springs townhome

Using our spreadsheet, Chris and Christine were able to see what the different outcomes would look like if they changed some of the numbers.  This helped them decide to make a down payment of 25% vs 20%.  That down payment amount enabled them to get a better interest rate, too.  

Property Operating Expenses 

Property Operating Expenses Colorado Springs townhome

They plan on using a property manager for their townhouse.  Both Christine and Chris work full time and this isn’t their area of expertise, so it made sense for them to rely on someone who is an expert in this field.  Once they decided they would hire a property manager, it allowed them to branch out from their immediate area and led them to investing in the Springs.  

The HOA for their community covers the exterior of the building, landscaping, and trash.  A lot of townhouse HOAs in the Springs don’t cover water and sewer.  This townhouse community is part of the Security water district, so the tenant is able to obtain water through there.  

First Year Returns 

First year returns spreadsheet Colorado Springs townhome

The annual cashflow for this townhouse before taxes is $2337 a year, or about $200 a month.  This was great news for Chris and Christine, who were just hoping to break even.  Since they are more focused on long term results, they weren’t expecting a return until the 10-15 year mark.  

Immediate Goals and Plans for the Property 

They are going to continue renting out this property and allow it to appreciate.  

Exit Strategy/ Long Term Plan

Chris and Christine are still working out the process of meeting their long term goals and are talking to their lender about what next steps they should take.  They’re excited to embark on this journey and see how it changes the landscape of their retirement timeline and lifestyle.  They have two kids who could potentially take over ownership of some of the properties, after learning what it takes to manage them.  

Connect with Chris and Christine 

Both Christine and Chris would love to connect with other investors and hear about different processes, as well as share theirs in more detail.  To reach out to them, you can

Get Started Building Your Own Colorado Springs Rental Portfolio

For information on how to get started investing in Colorado Springs, check out our free 2021 Colorado Springs Real Estate Investing Guide.

You can also check out our real estate investing toolkit which has free spreadsheets you can download to analyze rental properties.

YouTube Video: 3 Bedroom Townhouse in Colorado Springs for $300K

Analyze Before You Buy
Start Evaluating Properties Today with Our Free Toolkit
In a rapidly changing market, having the tools you need to help you analyze the data is critical. Know what the numbers will look like ahead of time so you don't buy a bad deal. Our toolkit is designed to help you thoroughly analyze any kind of deal so you can invest with confidence.
Start analyzing your Colorado investment properties today
Rental Property Spreadsheet • House Hacking Spreadsheet BRRRR Calculator Spreadsheet • Fix and Flip Deal Analyzer Investing Maps • Rehab Pricing Estimator
Start analyzing your Colorado investment properties today
Rental Property Spreadsheet • House Hacking Spreadsheet BRRRR Calculator Spreadsheet • Fix and Flip Deal Analyzer Investing Maps • Rehab Pricing Estimator
Authors
Jenny Bayless
Jenny Bayless is an investor-friendly agent with Envision Advisors, Colorado real estate investor, and the host of the Colorado Springs Real Estate Investing podcast.
Similar Post You Might Also Like
Deal Analysis - Denver
How to Combine House Hack Strategies to Live for Free
One of the great things about house hacking is its versatility—house hackers aren’t locked into just one strategy. In this
Colorado Springs
October 2022 Market Updates: Take Advantage of Dropping Rates and Seller Concessions
The October 2022 market stats for Denver, Colorado Springs, and Pueblo are now out, and our roundtable is back to
Sign Up For Our Newsletter
What do you want to learn today?