Denver Investment Property – The Do’s and Don’ts in the Current Denver Real Estate Market
The Worst Investment Models in the Current Denver Market
Denver Investment Property currently means rents are high, Prices of homes are up, supply of homes are down , new development is booming and getting a construction permit is nearly impossible, to top it off there is a Stock and Housing Bubble Looming in the near future. What do you do? Where to Invest?
Many have chosen to sit on the sidelines in Denver simply do to the fact that they do not know how to invest in a complex market with so many factors that could change quickly at any moment. CAUTION has been the choice of most.The House Ninjas Denver Wholesale Deals has the property and knowledge to keep you profitable in this crazy market.
I want to break down some of those factors for you and show you how you can profit in this market with little risk.
Do not Buy Rentals in Denver Now
Unless you can find a rare good deal at least 25% equity with minimum $300 cash , instead buy out of state in markets that still have great value. (See the list below of the best markets to buy in.)
First off Rents are high, it seems like a great time to buy rentals right? Not necessarily although the temptation of great cash flow seems too good to be true it’s simply better to have purchased rentals the past 5 years and to already own them then to purchase any cash flowing property now.
Why- Equity is important when buying a rental , cash flow is good for now but future long term value is gained in equity and with a large stock and housing bubble on the near horizon and high rental rates being temporary it could be an upside down disaster financially to buy into a market with values this high. Simply put these rental rates will not last, people are already moving elsewhere rather than face the unrealistic prices currently for rentals.
Do Not Buy Long Term Fix and Flips
Big projects are now a massive risk and profits are the lowest they have been due to the acquisition cost, sure a good deal may be found in this category from time to time but with permits holding up the projects for months and the market being peaked out you risk losing all the profits as the roller coaster starts downhill as many did during 2007.
New Construction is a Win/Lose Situation
Many are hoping on the new construction bandwagon and this seems to be a good idea, supply of houses is at an all-time low and demand at an all-time high. There is a lot of money to be made right now in new development in Denver Metro but with that comes a huge risk, the Bankrupting kind of risk as any day the market could crash right alongside the stock market and global markets. The better choice is finding the land and property to flip to these to developers even if it means doing the site work when needed.
The Best Models to invest in the Denver Market now.
Buy Short Term Flip Properties
Right now one of the best ways to invest in Denver is to take advantage of the increase in sales and high demand by obtaining lip stick flips aggressively with Hard Money/Private or Cash and flipping them quickly for smaller profits, this is a great model right now. Quantity and speed is important in this model. In many cases price reductions are easier to get from regular home sellers then from the banks the past 5 years. You can ride this model until the bubble pops and have very little risk if you limit the amount of liquid cash you’re using. We have a large selection of Denver Wholesale Property each week at The House Ninjas the Wholesale deals in Denver that work for anyone’s investment model.
Buy Out of State Rentals
Many markets around the country never recovered and still have decent demographics, if you’re looking for a great portfolio why not buy 10 houses at 50-70k in a place like Alabama with rents averaging $1050 a month for a 3 bed and have both cash flow and long terms equity to weather further economic turmoil. This is a great Model, in many cities you can buy turnkey with everything in place or you can find wholesalers like our company who can provide, contractors and property managers to get you started if you’re looking for the raw deals without turnkey mark up.
Flip Development Land in Denver
Developed lots are in high demand in the Denver Metro as well as any property with the possibility to build. This fits in to a quick flip model, buy a house with great zoning in a good area that makes sense for a builder or developer and make 20-100k plus to flip it over quickly with no work.
Another option is to find empty lots in good areas with no site work and do the site work for your rehab and then sell the property to developers and builders. This is a great Model but does require cash, Private money or credit lines in most cases.