Deal Analysis – Investment Fourplex in Denver – Great Location!

This is a unique fourplex in a great part of town. It’s a mixed-use building with residential, commercial, and retail. It’s on South Broadway near I-25 with great walkability. The area is seeing great growth from new class A apartment buildings and lots of restaurants and retail stores. The light rail is walking distance. The plan is to take the cash flow now and ride the wave of change and appreciation!

This is a unique fourplex in a great part of town. It’s a mixed-use building with residential, commercial, and retail. It’s on South Broadway near I-25 with great walkability. The area is seeing great growth from new class A apartment buildings and lots of restaurants and retail stores. The light rail is walking distance. The plan is to take the cash flow now and ride the wave of change and appreciation!

This property closed Q4 2019.

Investor Profile

  • Repeat clients looking to add more to their portfolio.
  • Long term goals are for retirement planning.
  • Defined property criteria for great location and low maintenance.

Three Learning Options!
  1. Listen to the podcast “#166: Deal Analysis – Investment Fourplex in Denver – Great Location!” 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: Networking

Real Estate Deal Analysis Quadrant
32% of the rental properties we buy are from networking.

Read about the deal quadrant and finding Denver Rental Properties.

Investment Property Details

  • Type: Multiunit
  • 4 Units
    • 4 –  1 bedroom,  1 bathroom
  • Location: South Broadway
  • List Price: $745,000
  • Purchase Price: $733,000
  • Why we liked it:
    • Location, Location, Location!
    • Rented and updated
Denver real estate map
Investment Fourplex in Denver – Great Location! near E Colorado Ave and S Downing St

Property Contract Details

  • Finding the property: Our clients wanted to buy more multifamilies that cash flow now, but in a part of town with expected appreciation. We started hunting and found this through our network.
  • Under contract:  Below original ask
  • Inspection Concerns:
    • One unit with water damage from broken pipe.
    • Punch list items
    • One water heater
    • One broken window
  • Inspection negotiation outcome:
    • All fixed by seller!

Property Financing Details

  • Lender: Local bank
  • Loan Type: Commercial loan – mixed use threw a curveball to lender
  • Appraisal: At value
  • Seller Concessions: None
  • PMI: None
  • Interest Rate Buy Down?: No

Spreadsheet Analysis

Multifamily Deal Analysis spreadsheet
Multifamily Deal Analysis spreadsheet
Multifamily Deal Analysis spreadsheet

Property Operating Expenses

Property Operating Expenses analysis spreadsheet

First Year Returns

first-year returns on multifamily rental

Conclusion

This property has a lower cap rate than many of the other ones, but that’s because of the location. Generally speaking, the better the location, the lower or more compressed the cap rates will be. South Broadway is a great location with light rail access, walking score, and proximity to downtown. It’s no surprise that class A apartment buildings are being built there. Rental properties with good cash in great locations are a solid investment!

Video: Deal Analysis – Investment Fourplex in Denver – Great Location!

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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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