Deal Analysis – Under $35k Down to Buy a Rental in Denver!

One bedroom condos are the lowest price point properties that you can find in Denver and Aurora. An investor can buy one for just over $30,000 out of pocket with a 25% down payment. You won’t find other rental properties that need so little down!

One bedroom condos are the lowest price point properties that you can find in Denver and Aurora. An investor can buy one for just over $30,000 out of pocket with a 25% down payment. You won’t find other rental properties that need so little down! This rental property came through our network. There was a curveball and unfortunate tragedy during the transaction: the tenant passed away.

This property closed in Q4 2019.

Investor Profile

  • In addition to investing in the stock market, the investor wants to build a sizable rental portfolio for retirement planning.
  • Not the investor’s first rental property.
  • He knew his budget and was able to make a quick decision.

Three Learning Options!
  1. Listen to the podcast “#155: Deal Analysis – Under $35k Down to Buy a Rental in Denver!” 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
68% of the rental properties we buy are found on the MLS.

Read about the deal quadrant and finding Denver rental properties.

Investment Property Details

  • Type: Condo1 bedroom, 1 bathroom
  • Location:  Aurora
  • List Price: $120,000
  • Purchase Price: $115,000
  • Why we liked it:
    • Low price point with good returns
    • Solid performing cash flow condo
    • Good condition
denver real estate map
One bedroom Aurora rental near E Mississippi Ave and S Buckley Rd

Property Contract Details

  • Finding the property: We are always networking by telling others what our clients need and watching what others are selling. Another investor sent an email to us that he wanted to sell so he could 1031 into a bigger property.  He sent the email to us first because we’ve closed deals together and knows we perform and our clients are ready to go.
  • Under contract:  Below ask and secret sauce
  • Inspection Concerns:
    • Service and cleaning of HVAC
  • Inspection negotiation outcome:
    • Service and cleaning of HVAC

Property Financing Details

  • Lender: Conventional
  • Loan Type: 25% down conventional
  • Appraisal: at value, no issues.
  • Seller Concessions: 0
  • PMI: None
  • Interest Rate Buy Down?: Yes

Spreadsheet Analysis

Home Deal Analysis spreadsheet
Home Deal Analysis spreadsheet
Home Deal Analysis spreadsheet

Property Operating Expenses

Property Operating Expenses analysis spreadsheet

First Year Returns

first-year returns on home sale

Conclusion

This is a straight forward deal and great rental unit. With condos in this price range, after a few years, we recommend that our investors look at optimizing equity. Since this is some of the most affordable housing in Denver, there’s a chance for strong appreciation. After a few years, it’s wise to look at the potential for a cash-out refinance or to sell, utilize a 1031 exchange and trade up to a better rental property. Regardless of what the investor does, he can enjoy solid cash flow for the next few years.

Video: Deal Analysis – One Bedroom Aurora Rental

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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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