Buying Investment Real Estate in Fort Collins
Interested in investing in Fort Collins? Even if you’re only looking at buying a house as a good placement for capital so that you don’t have to pay rent anymore, this blog post is for you!
Today, I want to talk to you about all things Fort Collins investment and share different investing techniques and strategies. First, a small disclaimer. Since the entirety of my portfolio and net worth is tied up in real estate, while you read on about my tips, please understand that I’m coming from my place of bias. Now, let’s start!
The 4 key factors for real estate investing
I think there are 4 things that you need to have at least ONE OF if and when you’re considering investing in real estate.
1. Be a real estate broker
If you’re looking at doing fix and flips or buying holds, having that real estate license will not only give you some insight into properties but also help you save commissions. You can pay yourself when you’re buying property or selling property, etc.
2. Manage the property
Manage the properties of your first five units by yourself. There are plenty of tools and educational materials to support you. Looking on the bright side, it will definitely give you a hands-on experience from learning how to collect rents, dispositions, marketing, maintenance, utility bills backs, etc.
3. You’ve got to be the money
If you have a small budget, there are ways and opportunities for investment. But in reality, real estate is expensive. The median house prices are around $450,000+ so if you don’t have enough money, it might be difficult to get around in real estate. There are private lenders out there all over the place.
If you have the big bucks, you can be the bank. Being the bank is the pinnacle (in my opinion) of real estate investing.
4. Be the contractor
Maintenance expenses can range from 5-10% of monthly receipts. If you’re able to renovate the kitchen, or put in the cabinets, you could save some money on home repairs. Don't be the person though that jobs have to be done twice. It will cost you more if you have to tear out your work and have someone else come in and redo it.
With at least one of these four factors, you have a much better chance of being successful in real estate.
7 tips for investing in Fort Collins, Colorado
There are tons of different ways of investing in real estate, from fix & flips, buy & holds, investing in commercial, office, retail, industrial, land to even becoming a minority partner in real estate partnerships/syndications.
If you want to hear what investing in Fort Collins looks like in today’s figures, check out my YouTube video below where I elaborate on this even further.
Now, I want to share some tips on how to successfully invest in real estate in Fort Collins.
1. Put a large down payment
If you’re only looking at doing placement of capital and want to ensure that the property cash flows, I suggest you put more than 25% down.
2. Buy from a wholesaler
Wholesalers usually want to work with investors. They are easy to work with, but it might be best to partner up with someone like me to ensure it goes smoothly. Also, if you want to invest with a wholesaler, you will more than likely need to bring cash aka Hard Money or a private lender. Big bucks
3. Off-market deals
If you want to get a little bit more in the weeds, then try to have conversations with people directly. Let them know you're interested in investing in real estate and trying to find off market deals. Although these opportunities are time-consuming, they are quite fruitful. They are the real conversations people who are looking on the market wish they are having.
4. House hacking
What do I mean by house hacking? You buy a 4-bedroom property. You move in and rent the other bedrooms to friends or anyone else who’s reliable and needs a place to stay. You offset your mortgage substantially and parlay that into another deal a couple of years down the road.
The best thing about house hacking is that you could take advantage of owner-occupied rates which are more favorable as well as lower down payments.
You can also "house hack" with a duplex. You live in one side and rent out the other side. That way, you and your wife do not share a home with anyone but get the advantage of offsetting your mortgage with someone else's rent.
5. House flipping
Another option for real estate investment in Fort Collins is house flipping. I suggest you find a trustworthy team of construction workers to help you fix the house in a timely manner. This is one of the higher risk types of real estate investing. If you don't know your numbers and are not willing to bring on more experienced partners, your risk level is sky high!
6. BRRR (Buy, Rehab, Rent, Refinance, Repeat)
This is again where you buy a property, put some money into it to add value. Then you refinance, pull out some cash, and move to another investment. Owner occupied opportunities can be done with this if you are willing to live in a construction zone. Low risk, but big headaches.
The other way is to do a "fix and flip" but rather than flip it to someone else, flip it to yourself, refinance it and hold it as a rental.
7. Mis-marketed property on the MLS
Another way to invest is to look for properties on the market that no one else is looking at. Possibly because the price seems too high, "bad area of town", wrong type of property, not enough bedrooms, or a number of other possibilities. In reality, when you dive into these properties, maybe they are actually marketed incorrectly and you've found what amounts to a decent property! As crazy as it sounds, it happens more often than you'd think!
I hope this article helped you understand real estate investing in Fort Collins. If you need any help, count on me! I’d love to help out. Drop me a text or call me and we’ll get started!
In the meantime, check out the YouTube video below and consider subscribing to our channel: