Real Estate Investment Opportunites in Denver (Aurora, Lakewood: bank owned, fit in, section 8) - Colorado (CO) - City-Data Forum

Lafferty Daniel · 10-07-2009, 02:42 PM

Hi everyone,

Just wondering what districts in Denver or suburban cities you think will be good investment opportunities in the next 5-10 years?

Hopefully sometime in the next couple of years, my wife and I will be moving to Denver to be closer to my family, and because we love it there.

We will likely purchase a home between $175,000 - $250,000. We love the charming homes near downtown, but wouldn't mind a condo either since we aren't planning on having kids anytime soon. I would like to live in a district or suburb that has a lot of potential. Something that might be underrated today as opposed to the area by Union Station that is overrated in my opinion. (At least in terms of price.) Doesn't really matter if it's East Denver, North Denver, or a suburb.

Please let me know if you'd like more info. Thanks!

Dorthy · 10-07-2009, 03:14 PM

//www.city-data.com/forum/denve...nder-200k.html

Lafferty Daniel · 10-07-2009, 03:28 PM

Quote:

Originally Posted by yodi

//www.city-data.com/forum/denve...nder-200k.html

Thanks for the link yodi, but I was hoping to get a little more info.

I already new about Capital Hill, Wash Park West, Platt Park etc. as being nice areas that aren't "underrated." I did learn that Rosedale might have some potential since it borders some of the areas I just mentioned.

Any other areas that I should look into? Thanks again!

Brian_M · 10-07-2009, 05:34 PM

Talk with a local Realtor... but I want to warn you that in the price range you're considering, it is a Sellers Market here. In the 2 weeks my wife and I spent looking, there were Multiple houses that went under contract the day we were able to see them, and all of those houses had multiple offers with at least one over asking price. Location doesn't really matter (though condition of house does... the homes that are sitting all have either foundation problems, are short sale/bank owned/forclosures, or have renters that won't play nice and let you in/destroy the property when they leave)... it's just within that price range.

But the areas to watch are those with major dollars coming into them from the city by way of localized improvements and lite-rail. One that my wife and seriously considered was Jewel/Hoffman Heights in Aurora, just south of Fitzsimmons. It's stable right now, but looks like there should be at least a little upward growth in the next decade. We bought in Ruby Hill, which is due to have a major overhaul to the park. I'm sure there are others.

But it's all speculative. Money could fall through on the projects and they stall out forever, or take 5 times longer than expected. A hundred other things could cause any area to suddenly lose value (a friend in the industry still feels homes are about 20% inflated). Unless you enjoy taking a gamble on speculative things (stock market, casinos, etc..) it'd be smarter to just look for the right property for you. No one is likely to see major profits from over-inflated homes again, or if it does happen, itll be more than just a decade out.

Lafferty Daniel · 10-07-2009, 06:50 PM

Thanks for the info Brian. I had no clue it's a sellers market there. Sure seems like there is a ton of inventory on websites like Trulia.

BTW, I'm not looking at buying property in Denver just to make money. I just prefer to find an area that has a lot of potential because it's currently under the radar. I don't know much about Ruby Hill. I thought I read here that they have Section 8 housing which can hurt the value. Is that true?

Brian_M · 10-07-2009, 09:43 PM

Don't know about value and Section 8 housing, but looking at the Available Sect. 8 housing here DHA - Homepage for Dever SW, the closest one I found to our house (still a mile away) was a 4bd that rents for $1450/month.

Value will only Change if something desireable or negative is introduced/removed. If it's already present when you buy and is present when you sell, the value will not be impacted by that particular thing (be it Sect 8 housing, a golf course, whatever).

From the looks of our appraisal (7 comparables), the value of the neighborhood is driven more by a rash of forclosures over the previous year resulting in a lot of bank-owned homes that have driven prices down. With the stringent lending practices in place (sheesh, we did a conventional loan with 20% down, mortgage under 20% of our income and credit scores above 775 ~ our lender said we'd be the easiest loan he'd do this month and it's STILL had a ton of hiccups/headaches), prices ought to be making a slight upward trend as those homes are resold.

Went went about our shopping first by location (wife's employment is off US6 out by Golden ~ before interviews we had included the VA hospital, hence looking at Jewel/Hoffman Heights), we wanted to stay within a 30 minute Normal commute. Next was price, we had a limit of $200k (self-imposed, no sense being house poor), and the final criteria were personal wants. We found, without exception, that the homes closer to I25 were in better shape for the dollar. Some neighborhoods where absolutely Destroyed with settling (found one house with a basement floor that'd dropped over 4"), and those were sprinkled all over the place. Those prices came down, most likely, because of the neighborhoods. Ruby Hill is decidedly ethnic (seems to be a mix of asian and latin/mexican), and there is a good bit of crime along the major streets (Federal and Mississippi ~ I have another post in this forum where you can see Current crime stats for Denver county areas). None of that bothers us because the Specific neighborhood seems to be older couples (our 1958 house is being sold by the original owner), and there's been no real crime within several blocks for the 3 years history available. A simple case of a good pocket of homes in a 'bad' area... I'm of the opinion that things are getting Better right there, not worse. So I expect this pocket to grow. We were really put-off by the, well, no PC way to put it, by the 'whitness' and blandness of the outer suburbs (Arvada, Westminster, Wheat Ridge, Lakewood, Thornton) we saw. Obviously lots of people are looking for that kind of living (and they are PROUD of their homes! Wow, prices were high), and there is nothing wrong with it... just not right for my wife and I (even if we would blend in perfectly).

As for the Sellers market thing, yeah.. caught us Completely off guard. Lots and LOTS of attempted flips in your price range (some were down-right frightening how bad they were, quality of workmanship not materials). We were told you have to go north of $400k to get into the Buyers market. We put in an offer on our house in the driveway of the house, it'd been on the market for 17 days and we made an offer over asking (2 other offers came in before the deadline, both near asking price according to our Realtor). We'd missed out on another a few blocks away a few days before by waiting to pull comps that evening. I'm glad we're done looking, it's not a process I'd wish on anyone... make SURE you have your lending lined up before starting to look.

When you're looking at Trulia/Zillow/COHomeFinder/whatever... check for the Type of listing. A lot of them will say "Backup". That means the home is currently under contract and they're just collecting offers incase lending falls through. There are also a LOT of short sales that aren't listed as such in the main notes (realtors get more notes), potentially alright deals if you don't mind waiting 3 months. Of the 43 internet leads we sent to our Realtor three days before we met to start looking, 7 were still available/not short sale.

Anyway, good luck! We did manage to find a house that met all but one of our Major criteria (it failed by being Larger than we wanted), so it's possible to find the right house. Don't let me gloom and doom you into thinking that the right property isn't out there for the right price for you. It's just finding that lil bugger.

Brian

2bindenver · 10-08-2009, 08:02 AM

Everything depends on what you want, and your desire for pain/profit.

If you have already ready The Millionaire Real Estate Investor, then you know what will fit in your box.

Where the new commuter rail seems to be popular, from $60,000 to $175, 000 is a sellers market - I just put one under contract for 10% over asking price, cash sale.

You need an advocate with boots on the ground here. It's better if you are here too. But if you cannot be here, find a Realtor that knows a property manager (or is one,) has access to a painter, a handyman, a construction manager (for rehab), and has experience doing what you planning.