This is a unique fourplex in a great part of town. It’s a mixed-use building with residential, commercial, and retail. It’s on South Broadway near I-25 with great walkability. The area is seeing great growth from new class A apartment buildings and lots of restaurants and retail stores. The light rail is walking distance. The plan is to take the cash flow now and ride the wave of change and appreciation!
This property closed Q4 2019.
Investor Profile
- Repeat clients looking to add more to their portfolio.
- Long term goals are for retirement planning.
- Defined property criteria for great location and low maintenance.
- Listen to the podcast "#166: Deal Analysis - Investment Fourplex in Denver – Great Location!" on the Denver Real Estate Investing Podcast
- Watch the YouTube video (at the bottom.)
- Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast or video.
Deal Quadrant: Networking
Read about the deal quadrant and finding Denver Rental Properties.
Investment Property Details
- Type: Multiunit
- 4 Units
- 4 - 1 bedroom, 1 bathroom
- Location: South Broadway
- List Price: $745,000
- Purchase Price: $733,000
- Why we liked it:
- Location, Location, Location!
- Rented and updated
Property Contract Details
- Finding the property: Our clients wanted to buy more multifamilies that cash flow now, but in a part of town with expected appreciation. We started hunting and found this through our network.
- Under contract: Below original ask
- Inspection Concerns:
- One unit with water damage from broken pipe.
- Punch list items
- One water heater
- One broken window
- Inspection negotiation outcome:
- All fixed by seller!
Property Financing Details
- Lender: Local bank
- Loan Type: Commercial loan – mixed use threw a curveball to lender
- Appraisal: At value
- Seller Concessions: None
- PMI: None
- Interest Rate Buy Down?: No
Spreadsheet Analysis
Property Operating Expenses
First Year Returns
Conclusion
This property has a lower cap rate than many of the other ones, but that’s because of the location. Generally speaking, the better the location, the lower or more compressed the cap rates will be. South Broadway is a great location with light rail access, walking score, and proximity to downtown. It’s no surprise that class A apartment buildings are being built there. Rental properties with good cash in great locations are a solid investment!
Video: Deal Analysis - Investment Fourplex in Denver – Great Location!
Podcast: Play in new window | Download (Duration: 17:28 — 20.0MB)
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