In this episode, Leah joined me to talk about a townhome purchased by a first-time investor.  She helped him figure out what to look for and was able to get him under contract on the first property they saw.  Even with conservative projections, the client is getting great returns thanks to his choice to self-manage the property. 

Investor Profile

This client is a brand-new investor out of Denver who was looking for a property that would cashflow.  To help him understand what to look for, Leah and I ran through different analyses on properties beforehand using our Rental Property Spreadsheet. 

Appealing Features of the Property

This is a 3 bedroom/2 bathroom townhome located in central Colorado Springs.  It’s in a great neighborhood that backs up to a golf course. 

Property Contract Details

Contract

The property was listed at $230K, and Leah submitted an offer for the buyer for $250K.  It’s hard to find anything in the $200s right now, and properties in that price point are highly competitive.  The client was competing against 5 other offers, but, fortunately, his was strongest. 

Inspection Issues

The inspection found that the foundation needed to be encapsulated.  Leah was able to negotiate $1K in seller credits toward the $3200 repair cost.  Otherwise, the property was well-maintained and in good shape.

Spreadsheet Analysis

Property Overview

We ran rent conservatively at $1650, but the client might push it a little.  Similar properties run at $1750.

Property Operating Expenses

To save money, he is going to self-manage.  Self-managing is a great learning experience for anyone so inclined, and this is a solid property to start with because it’s in good shape and the HOA handles some of the maintenance.    

First Year Returns

The client’s goal was to cashflow about $200 a month, which he’ll be able hit with an annual cashflow of $3K.  His cap rate of 5.6% and 36.5% return on his initial investment are great numbers, especially for a traditional investor who isn’t house hacking.  By self-managing the property, he’s helping to boost his returns. 

Conclusion

This deal analysis really highlights the benefit of self-managing.  By choosing to do the work himself, the client’s returns are significantly higher than they would be otherwise.  As an investor who also self-managers her properties, I recommend anyone who has the ability and interest to look into it. 

Connect with Us

If you have any questions about investing in the Springs, or want some help finding your own property, send me an email.  We are more than happy to help you house hunt for your own investment property. 

YouTube Video

Denver Investor Buys in Colorado Springs for $250,000

Podcast (colorado-springs-real-estate-investing-podcast): Play in new window | Download | Embed