Deal Analysis – Denver Single Family House Nomad™

Our clients wanted to buy a house in an area they could enjoy while living there and hopefully ride the wave of transitioning neighborhoods and therefore appreciation.

Our clients wanted to buy a house in an area they could enjoy while living there and hopefully ride the wave of transitioning neighborhoods and therefore appreciation. This case study breaks down a home in a great location just north of City Park on the edge of Whittier and Skyland neighborhoods. Their focus is on accumulating properties through Nomading™ rather than focusing on reducing their current living expenses with house hacking.

This property closed in Q4 2019.

Investor Profile

  • Young couple who recently relocated back to Denver
  • Wanted to start building a rental property retirement portfolio
  • Did not want roommates, so focused on the Nomad™ strategy
  • Wanted to live in an up and coming area for personal enjoyment and appreciation potential

Three Learning Options!
  1. Listen to the podcast “#152: Deal Analysis – Denver Single Family House Nomad™” on the Denver 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.

Deal Quadrant: MLS

Real Estate Deal Analysis Quadrant
The majority of Nomad™ and House Hacks are found on the MLS

Read about the deal quadrant and finding Denver rental properties.

Investment Property Details

  • Type: Detached single family house
  • 3 bedroom, 2 bathroom
  • Location: Whittier neighborhood
  • List Price: $395,000
  • Purchase Price: $407,000
  • Why we liked it:
    • Location, location, location
    • Updated
    • House pushed back on lot
    • Lots of charm and character, exposed brick, etc
    • Lots of off-street parking in alley
denver real estate map
Single family house Nomad™ in Denver near E 17th Ave. and Colorado Blvd.

Property Contract Details

  • Finding the property: Timed purchase and closing for current lease ending. Looked at multiple properties to dial in area and price point. Great location and great house, so it received multiple offers.
  • Under contract:  Above ask and secret sauce
  • Inspection concerns:
    • Roof
    • Water heater
  • Inspection negotiation outcome:
    • New roof through seller’s insurance
    • Seller concession for water heater replacement

Property Financing Details

  • Lender: Conventional
  • Loan Type: 5% down conventional
  • Appraisal: Above!
  • Seller Concessions: $1,350
  • PMI: Monthly
  • Interest Rate Buy Down?: Yes

Spreadsheet Analysis – After Move Out

Home Deal Analysis spreadsheet - Move out
Home Deal Analysis spreadsheet - Move out
Home Deal Analysis spreadsheet - Move out

Property Operating Expenses

Property Operating Expenses analysis spreadsheet

First Year Returns

first-year returns on home sale

Conclusion

Our Denver rental spreadsheet shows a negative cashflow when they move out. Our analysis includes a 10% property management fee ($2,940/yr). If they self manage, that will get the property very close to neutral cash flow while still accounting for a 3% vacancy and 8% repairs and reserves. They plan on holding high cash reserves to handle any unexpected curveballs from life, the property or the market. This is a great fit for their personal living goals and long term investing goals.

Video: Deal Analysis – Denver Single Family House Nomad™

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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
Chris Lopez
Chris Lopez is a Denver area real estate entrepreneur and investor, as well as the host of Bigger Pockets’ House Hackerz and the Denver Real Estate Investing Podcast.
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