Rental property in Colorado Springs
Last Thursday (12/1/5) I drove 70 miles to view 5 rental properties in Colorado Springs that looked to be moderately promising. They are in a good rental area, the southeast part of town, and they were 3/2 and 2/3/1 condos in the $100K range. The 3/2 condos were REO properties so I expected there would be at least a little rehab necessary. It turns out that I only got to view 3 of the 5 properties - one of the REOs had the door standing wide open and a basement light on... a little too spooky for my agent and me. one of the 2/3/1 condos just plain cancelled.
The results: the 2/3/1 condos were virtually the exact same layout with some minor price difference but the major difference was that one condo owner felt compelled to do a variety of repairs (wall patching, wall installation, etc.) without the benefit of a professional contractor - it looked like crap. The better of the two 2/3/1 condos is listed at $106K and has an 18 year (stated, not documented) rental history with only 5 months of vacancies. The rate that the last renter paid (the lease ended last week) was $750/mo, again, this is stated, not documented. The only concern was The one 3/2 REO condo that I viewed was in the process of being rehabbed by the bank. If they rehab the kitchen in addition to all of the other areas I think that this will be a moderately good deal. It was listed at $100K with no rental history. The one thing that concerns me about this condo is that the community that it resides in has more of an apartment complex feel (as opposed to the neighborhood feel at the 2/3/1 condo). I am going to get some current mortgage quotes from about 4 different mortgage companies that I am looking at using. I have worked the numbers and it will be hovering around a break even. I will not invest at a loss, I really don't want to afford a loss and this is a bit difficult to avoid while I am doing 100% financing until I can get some cash out deals under my belt. The loans that I am hoping to get are long term (15 or 30 year) fixed but I may have to settle for interest only loans. The loan that I do not want is an adjustable rate - I am already seeing my HELOC on my primary residence go crazy.. I don't need another one of those with the Fed making the adjustments that it is making.
posted by investor john @ 8:26 PM
1 Comments:
Ken,
Thanks for the comment - and more importantly, welcome back and thank you very very much for your courage to protect our country!
I have not been looking in the C. Springs market for about 4 months because I've been focusing on property in Idaho. However, while I was looking for condo rentals in the Springs the one thing that I ran into many times was that the HOA dues were well over $200/mo - this would always kill the deal for me because I was looking to do a 100% financing, standard investment loan. Certainly this is not the type of investing that is taught or encouraged with the Rich Dad folks, but I wanted to get my feet wet.
I want to point you to 2 other people who are active on the Rich Dad forums who are in the area who have more experience with investing in your market. The first is hakrjak. He lives in C. Springs and has several rentals. He has a very good posting which may answer some of your questions about investing in the local market, here is a link to that post. The other person goes by STG. He is just out of the Army and I think he is living in Pueblo (about 30 miles south of you). He does flips. You should read his blog which gives details about many of his deals.
Generally speaking, I would recommend that you read as many as the Rich Dad books as possible. There are recommended books that can be found throughout the Rich Dad Forums, this is also a great resource for real estate questions you have. Search the forum for any question that may have already been asked. I have just read a book by William Bronchick which goes over flipping properties and I'm currently reading his material on basic REI. I recommend him. One more thing that I will recommend and that is to join the local real estate investing club - this is a great way to network and build a list of potential buyers and sellers. They usually have great educational meetings also. The Colo. Springs club or the Denver club are the two clubs that I know about.
Good luck and I hope to see some of your posts on the RD site.
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