Property Deal Analysis Overview
Our client is a young working professional purchasing his first Denver investment property though the Nomading™ approach. He wanted his first purchase to provide a balance of investment and lifestyle. Location was one of the main focuses along with cash flow after moving out. The neighborhood will continue to appreciate.
This property closed Q3 2020.
- Single young working professional
- Wanted to start building a rental property retirement portfolio
- Nomading™ approach
- Wanted to live in an area that provided personal enjoyment, little to no maintenance, and cash flow
- Listen to the podcast "#222: Deal Analysis - Nomad™ Denver Townhouse" 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: MLS
Read about the deal quadrant and finding rental properties in Denver.
Investment Property Details
- Type: Townhouse
- 2 bedroom, 3 bathroom
- Location: Jefferson Park
- List Price: $645,000
- Purchase Price: $640,000
- Why we liked it:
- Amazing location
- Brand new build, low maintenance
- Across from Jefferson park, walk to bars and restaurants
- Roof top, mountain and city views
- Cash flow positive
Property Contract Details
- Finding the property: New build on the MLS
- Under contract: Below and secret sauce
- Inspection Concerns:
- Cosmetic issues - touch up paint, kitchen cabinets not hung level, doors didn’t stay open.
- Inspection negotiation outcome:
- Builder corrected all punch list items
Property Financing Details
- Lender: VA
- Loan Type: 3.5% down VA
- Appraisal: at value, no issues.
- Seller Concessions: 0
- PMI: N/A
- Interest Rate Buy Down?: No
Spreadsheet Rental Analysis
Property Operating Expenses
First Year Returns
The spreadsheet shows a positive cash flow of $3778 once he moves out after year one with a 5/35 cap rate. The analysis doesn’t include a property management fee as he is willing to self manage, while accounting for a 5% vacancy rate and 5% repairs and reserves sine it is a townhome and a brand-new build.
Read more about the Nomad strategy and how it works by viewing these case studies on Nomad properties.