Colorado Springs Real Estate Investing Podcast

I used the proceeds from a cash out refinance on rental properties that we had bought a few years ago to take advantage of the significantly low interest rates on those properties.  As a result, we wanted to redeploy the cash out proceeds into additional rental property. 

This one was very easy since it was a new build, turnkey property, and the expected performance was quite good!  I was able to not use any of our own cash and procure a cash flowing rental property that is brand new (expecting pretty low maintenance for a few years) in an area that is experiencing very good growth!  The next set of units for sale were already almost $20,000 more than what we bought this for – – instant equity!

For more Colorado Springs Deal Analyses including house hacks and multi family properties, check out our Colorado Springs Deal Analyses page.

For more Colorado Springs Deal Analyses including house hacks and multi family properties, check out our Colorado Springs Deal Analyses page.

Source: The above executive summary is from Lon Welsh of Your Castle Real Estate.

In case you missed it, the 80911 zip code south of Colorado Springs has the “hottest” housing market in the U.S., according to an analysis by realtor.com.

The 80911 zip code covers the Security-Widefield area, bordered by Milton E. Proby Parkway to the north, South Powers Boulevard to the east, Fountain to the south, and Fort Carson to the west.

To come up with their list, the realtor.com economics team looked at ZIP codes in the 300 largest metropolitan areas (which include the main city and surrounding smaller urban areas, towns, and suburbs) from April through June of 2020.

Each ZIP code needed at least 13 listings per month to be included. Only the top ZIP code from each metro area was included.

Colorado Springs’ 80911 was the only Western zip code to rank in the top 10.

According to realtor.com, homes in 80911 sold in a median six days in July 2020.

“The appeal of the ZIP code, about 80 miles south of Denver, may lie in its relative affordability,” they said in their analysis. “The median home list price was $306,500 in July—significantly less than the median $455,050 price within Colorado Springs’ city limits, according to realtor.com data. It’s also much less expensive than Denver’s median $550,000 price tag.”

“But that increase in demand has driven prices in the ZIP code up nearly 15.9% from last July,” the analysis noted.

Several Pikes Peak-region zip codes have made the “hottest” list in the past few years.

Zip code 80916, which covers a portion of southeastern Colorado Springs, was ranked #10 on last year’s list.

In 2018, zip code 80922, which covers the Stetson Hills area, came in at #2. That same zip code was ranked #7 in 2017.

So what are the nation’s most in-demand ZIP codes for 2020?

If you are a real estate agent that is interested in working in the Colorado Springs division of Envision Advisors, please keep reading:

We are a small team of real estate agents at Your Castle Real Estate with a focus on working with investors buying rental properties and house hacks. Over the past few years, we’ve experienced high growth from a strong online marketing presence and through local networking.

Our goal is to help investors achieve their financial and retirement goals through real estate investing by finding deals and helping them with their long term strategy. We are looking for team members with a strong interest in real estate investing for their clients and for themselves. While helping clients achieve their goals, we assist team members in achieving their own financial goals.

We’re looking for an agent to assist us with house hacks and residential investment properties in the Colorado Springs market.

We are looking for a talented individual who is the right fit for our culture and long term goals. We believe reaching out to our community is the best first step in order to “get the right person on the bus,” because we feel the right person is already engaged with real estate in some way.

It depends on your experience and situation.

Listen to episodes #230 – 234 on the Denver Real Estate Investing Podcast about the Envision Advisors

Write a cover letter that includes:

Please follow the instructions below carefully. Failure to complete any of the steps may disqualify you from consideration.

This podcast is that episode from August. It starts with a high-level overview of the house hacking market in Colorado Springs and digs deeper into these topics:

View the blog post for that August episode here where you will find all these topics discussed in detail, spreadsheet screenshots, and the video from that episode.

View the Denver House Hacking Guide Overview page to check out all 15 episodes in the series.

If want a free copy of book, email Jenny at [email protected].

Reach out to either of us and let us know what questions you have.

This property closed Q4 – 2020.

We are estimating $1,497 a year in cash flow after accounting for the mortgage, insurance, taxes, vacancy, HOA, and putting money aside for repairs and reserves.  The landlords are managing themselves, and they got a well-qualified tenant in the property very quickly (barely any vacancy).  Not bad for only putting 15% down!

For more Colorado Springs Deal Analyses including house hacks and multi family properties, check out our Colorado Springs Deal Analyses page.

HOME + CONDO Nov ’20 vs. Nov ‘19

HOMES Nov ’20 vs. Nov ‘19

CONDO Nov ’20 vs. Nov ‘19

Year to Date this year vs Year to Date last year

Source: The above executive summary is from Lon Welsh of Your Castle Real Estate.

The showing traffic in November was excellent compared to prior years, so we can reasonably assume the party will extend into December and probably January, too.

Great performance! Slightly lower than October but still record highs! Lots of buyer demand is still evident despite the election.  No seasonal slowdown in sight yet.

When I first began investing in real estate, I had “shiny object syndrome” and it was very hard for me to hone in on a specific strategy or goal to work towards.  I found that the only way to beat shiny object syndrome for myself was to jump in and see what happened. 

As I gained more experience in investing and was able to refine the process in terms of recognizing what worked and what interested me, my big goals became quite clear!  With each passing year, I am able to more clearly define my investment goals for the near future, because I have laid the groundwork in prior years and I am ultimately working towards those big goals.

To create my investment goals, I follow three general rules: I do not want to own an empire; making sure I don’t overextend myself; ensuring I have adequate cash reserves to cover all aspects of my life.  By keeping these rules in mind, I know my goals are not only attainable but will keep me comfortable, as well.  

By using these rules, I am better able to frame my goals.

Fun fact: My husband and I have been tracking all of our expenses and our net worth together since before we were even married.  We enjoy looking back at our spending, earning, and savings trends to see how they’ve changed over the years.  I knew by my mid-20s that collecting a paycheck was not going to contribute to wealth.  However, it was not until we were 29 years old that we started really putting a lot of effort into real estate investing.

I firmly believe that you cannot invest successfully without first being in a good position financially (rules #2 and #3).  While I am a big fan of low cash down deals and refinancing to redeploy equity while accumulating properties, these tools should only be used to strengthen your position and never used out of necessity.  I attribute a lot of our financial strength to simply knowing where our cash inflow and outflow goes.  By tracking our monthly expenditures, we can easily identify areas in which we can reduce our spending without causing discomfort or constraining ourselves.  Keeping a close watch on our income, expenses, and net worth allows us to better plan our savings and decide how to turn those savings into income-producing assets, and use them for fun things, like vacations!  In addition to these savings, we also have retirement savings accounts from employment, as well as some stocks, which we treat as a “set it and forget it” situation.

My personal budgeting goal for 2021 is to continue tracking our income, expenses, and net worth as we have been doing.  This is the best way to avoid “lifestyle creep” and instead continue to make wise financial decisions.

Between the Getting Started Guide and various Colorado Springs Real Estate Investing podcast episodes, you probably already have a good sense of my current portfolio and how it came to be.  Our present-day portfolio is the result of experimentation—we started out of state and then pivoted to Colorado Springs only; we began investing with hard money loans that came with pretty expensive terms and then were able to turn to private loans once we had a solid track record; we didn’t have a cohesive plan for fixing up our rehabs, but now we have a fantastic network of contractors.  After a lot of trial and error, we now have a good grasp of what we want in a rental property and how to get a property to that point. 

Over the years, we have refined our investing strategies in order to get to our current rental property portfolio.  For now, we are content with our strategy and holdings because they best fit our lifestyle.  At one point, my husband and I had 10 rental properties in Colorado Springs, but we sold 2 of them in order to fund our dream home.  Some people in the personal finance community may look at this as a foolish move, but we don’t regret it.  We were able to cash-in some of our hard work in order to put a good-sized down payment on our personal home, while still retaining our strong financial position.  As of the time of this writing, we own 8 rental properties in Colorado Springs and are in the process to close on our 9th this year. 

My 2021 real estate investing goal is pretty simple: I want to pick a property I currently own and pay off that loan.  Some people reading this might be cringing and asking, “Why on earth would you want to do that when you could deploy your equity into so much more?”, or “Interest rates are so low, why wouldn’t you want to borrow at those rates?” While there’s nothing wrong with those sentiments, I stick with rule #1: I am not setting out to own an empire.  We have always looked at our portfolio in two phases: accumulate the assets and then pay them off.  We have accumulated the properties that we want, so the next step is to simplify things and start to pay some mortgages down.

In 2020, I made a huge career move by resigning from my well-paying W-2 job that I held for a decade and transitioned to the world of self-employment by joining the Envision Advisors team.   I do not regret this transition for a second!

I flirted with the idea of leaving my stable W-2 job for a while, as I have the stability of my husband loving his W-2 job, and we built our real estate portfolio to accommodate such a move.  While I’d known it was time to move on for a while, it was hard to leave a good-paying, stable job.  The final push to leave came when my daughter was born, and I realized that I was fortunate enough to have the option to quit my prior job in exchange for the flexibility of being with her.  Making this decision also allows me to focus on helping others buy rental properties so that they can hopefully attain the same level of flexibility and freedom to achieve their goals, something I’m passionate about sharing.

I plan on helping the Envision Advisors team expand down to Colorado Springs, bringing to that market the same level of service and knowledge that our clients know to expect in Denver. 

When we started working in the Colorado Springs market in 2020, we weren’t sure what to expect in terms of client interest and speed of expansion.  Now that we have a general baseline from this year, these are my real estate agent/team goals for 2021:

2021 is gearing up to be a busy year with these goals in mind, but I am excited to work towards them.  Like many things in life, taking big steps now will provide the momentum needed to achieve even bigger goals in the years ahead.

Click here to check out the submissions page for information on how to submit your chapter.

If you would like to learn more about real estate investing in Colorado Springs, start here. From there you can view the latest quarterly report on the Springs market or sign up for the Colorado Springs Deal Email List to get analyzed rental properties sent straight to your inbox.

To learn more about the Colorado Springs rental market, check out the Colorado Springs Real Estate Investing podcast that I co-host with Chris Lopez. We analyze local deals and address topics that are important to Colorado Springs real estate investors.

We discuss a basic overview of loans that investors can utilize, such as:

With conventional mortgage loans, we discuss nuances that include:

Some of the other topics we discuss:

For purposes of this presentation, we will consider single family rentals (SFRs) as residential housing other than multifamily, to include: condos, townhomes, and single family homes (SFHs). This presentation aims to discuss the current SFR market for Colorado Springs and what this means to buy and hold investors.

Colorado Springs has a strong rental economy, but not enough supply, resulting in low vacancy and increased prices.

* Source data: Apartment Association of Southern Colorado Q2 2020 Report

◇ Article by Rich Laden, “Second-quarter apartment rents reach a record high in Colorado Springs”

Forget about the 1% and 2% rules from Google and BiggerPockets! The rules state that the monthly rent should be 1% or 2% of the purchase price. You will rarely find properties that meet these rules in Colorado Springs. These rules do not equal great rental properties or long term wealth building.

Forget about the 50% rule from Google and BiggerPockets! The 50% rule states that 50% of your rental income will go towards the property operating costs (All the costs except for mortgage payments). In Colorado Springs metro, we’re typically seeing between 25% to 35% of rents going toward the operating costs- similar to Denver.

We underwrite conservatively and realistically!  Make sure you understand the underwriting numbers from listings and other agents.

Example property: This is a 1 bed, 1 bath, 1 carport condo, located in the Southeast part of the city.  This is the lowest priced type of property I have seen in a while here.

Example property: This is a 3 bed, 2 bath, 1 car garage townhome with no HOA located near Ft Carson and built in 1986.

Example property: This is a 2 bed, 1 bath, 1 carport single family detached home with no HOA located in the Stratton Meadows area.

The condo example has a better cap rate and cash on cash return than townhomes and then single family.  As we learned previously, SFHs have better appreciation than condos and townhomes.  This likely contributes to the lower cap rate.  In other words, the price of the asset is increasing at a faster rate than its performance in terms of rent rate growth.  More specifically, rent rates are not increasing at the same rate that purchase price is, so as a result, the single family home prices are appreciating at median price increase of 18.8% from September 2019 to September 2020, which is far outpacing rent growth, and is still faster than condo/townhome appreciation of 14.1% in that same time period.

There are still good opportunities for investors to purchase for buy and holds in Colorado Springs.  However, if the current trends maintain, the longer you wait to buy, the more likely you will lose out to rents not increasing at the same pace as prices.  Condos, townhomes, and single family homes are all seeing large price increases, along with very low supply.  As a result, Colorado Springs is still a great market to invest in.