Deal Analysis – Wheat Ridge 1031 Exchange Duplex
This Deal Analysis looks at a 1031 exchange duplex located in Lakewood, Colorado. Our client was a buy/hold investor from the United Kingdom. He had three properties in the Denver area and sold one to trade up to a multi family property. Check out the episode to see how the numbers stack up.

He came to us with only 3 weeks left on his 1031 exchange identification period and wasn’t able to visit Denver for the purchase. We found him a duplex on the Denver/Westminster border, and he closed with two tenants already in place.

This property closed Q3 – 2020.

Investor Profile

  • Seasoned Buy/Hold Investor
  • Lives overseas and needed help, because he couldn’t visit Denver due to COVID
  • Has been investing in Denver for 6+ years
  • Looking for multi family
  • Wanted a 6%+ CAP rate

Three Learning Options!
  1. Listen to the podcast “#246: Deal Analysis – Wheat Ridge 1031 Exchange Duplex” 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
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: Duplex
  • 3 bedrooms, 2 bathrooms in each unit
  • Location: Berkley North by Hidden Lake
  • List Price: $589,000
  • Purchase Price: $570.000
  • Why we liked it:
    • On the market for 61 days
    • Renters already in place with 10 months left on lease
    • West of I25
Denver real estate map
Wheat Ridge 1031 Exchange Duplex near @ 72nd Ave and Lowell Blvd

Property Contract Details

  • Finding the property: Buyer was on a tight timeline with his 1031 exchange identification period expiring soon. We found this deal on the MLS.
  • Under contract:  Under ask
  • Inspection Concerns:
    • Issues with a deck that needed fixing
    • There were some structural concurs
  • Inspection negotiation outcome:
    • Deck issues negotiated into concessions
    • Structural engineer was brought in to certify the structure

Property Financing Details

  • Lender: Conventional
  • Loan Type: 15 year ARM
  • Appraisal: at value, no issues
  • Seller Concessions: $5,610
  • PMI: N/A
  • Interest Rate Buy Down?: No

Spreadsheet Rental Analysis

Deal Analysis spreadsheet 1031 exchange
Deal Analysis spreadsheet 1031 exchange

Property Operating Expenses

Property Operating Expenses analysis spreadsheet

First Year Returns

First year returns analysis spreadsheet

Conclusion

Given our short timeline, we were pleased to find a deal that was a great fit. If we had not been able to deliver this for our client, there would have been a tax liability on the 1031 exchange.

Check out our 1031 Exchange Denver Guide to learn about 1031 Exchanges in Denver.

YouTube Video: Rental Property Analysis – Wheat Ridge 1031 Exchange Duplex

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Authors
Scott Kimball
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