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.
- Listen to the podcast “#146: Deal Analysis – Family Nomad™️ in Littleton Townhouse” 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 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
Podcast: Play in new window | Download | Embed
