Colorado Springs Real Estate Investing Podcast

The headlines have been consistently painting a bleak picture of the real estate market with declining sales prices and higher interest rates. It can be hard to feel like there’s opportunity in real estate right now. Thankfully, despite these bleak headlines, deals are still being found in every Colorado region. And not only that, it seems that what Preston and Jenny are seeing in their own markets is vastly different than what the data is describing.

In this month’s Colorado real estate market updates, Newt Wyler join us from Northern Colorado to share insights into the Longmont, Greeley and Fort Collins markets. Although stats look similar across all Colorado markets, the panel highlights deals they have seen in their own markets emphasising there is still plenty of opportunity to be found. Moreover, the panel has noticed an increasing trend in the popularity of ARM products among their investors to help increase opportunities in their portfolio. By using ARM products, optimizing your portfolio, and keeping an eye out for great deals, investors can still achieve their investment goals in Colorado.

If you’re interested in buying an investment property and want to know what’s on the market now, sign up for our weekly deals list email.

If you’re considering creating a solid career in real estate investing, it’s important to have a solid strategy in place. In this episode, Mark, Taylor, and Jason share their insights and experiences of a successful partnership, walking us through their deals, strategies, and lessons learned.

Mark, Taylor, and Jason understand that one key to success in real estate investing is tailoring your approach to the investor’s unique strengths. This ranges from the type of strategy (short of long-term), or property type (single family or multifamily), depending on the situation. If you are going to take on a partnership approach to investing, an added crucial factor is setting clear roles and expectations within the partnership, and leveraging each member’s strengths and expertise to close more deals and build a strong real estate portfolio.

We often recommend picking a niche and a market, and sticking with it. Mark, Taylor, and Jason show us why sometimes it is best to NOT take this advice, and they have been wildly successful in just a few short years by trying a variety of different strategies and locations, all of which have been very well-thought out.

Our guests today explain how they meticulously researched different locations for investment, through  gathering and analyzing data on factors like population, employment growth, and median income, and using software to compare results and identify promising opportunities. However, it’s important to remember that real estate investing is a middle to long-term investment that requires patience and a focus on adding value over time.

To accelerate your success, Mark, Taylor, and Jason suggest learning from books, podcasts, and blogs, networking with other professionals, and optimizing workflows within your team. By following these tips and tricks, you can achieve both your personal and team goals and build a thriving real estate business!  As a bonus, make sure to stick around for a hilarious hurdle the guys overcame during their last purchase.

We want to know what you want to hear! What struggles are you having in your real estate investing journey? What has you stumped? What will help you level up your investing game?

We want to know!

Please send an email to [email protected] to submit your answers!

If you’re interested in obtaining some intriguing real estate information, you are in luck. Get ready to embark on an exceptional journey because we have a story that will surpass even the most thrilling roller coaster ride.

Jenny and Leah, our favorite Colorado Springs realtors, share with us how they helped a client in becoming a real estate expert by purchasing a remarkable property in Woodland Park with the intention of renting out a portion of it. 

Leah elaborates on how she worked closely with their client to locate the ideal property that would not only meet their requirements but also offer the possibility of short and long-term rental. To put it mildly, the client struck gold! He had purchased a previous fantastic house with a separate entrance that was transformed into a duplex, and now, he bought a property with a 5 bed 3 bath House Hack. It’s also important to mention that he only pays about $550 a month to live there. It’s akin to winning the lottery, but with Real Estate.

The most astonishing aspect of this situation is that this savvy client only invested $14,000 and will recover the entire sum in a mere 4 years. In just 48 months, he will have 2 incredible properties converted into rentals. That’s what we call intelligent investing!

If you’re thinking, “Wow, that sounds incredible, but how can I participate in this real estate opportunity?” Do not fret, Jenny and Leah have you covered. In this episode, they also discuss financing alternatives to property management as well as how you can get in for less with seller concessions so that you too can become a real estate expert.

In conclusion, this is a narrative of real estate wealth and ninja abilities that will inspire you to explore the realm of house hacking. Regardless of whether you are located in Colorado Springs, Denver, or broader, this podcast is filled with valuable insights and practical advice. Share this valuable information with anyone you know that be interested in real estate investing!

We want to know what you want to hear! What struggles are you having in your real estate investing journey? What have you stumped? What will help you level up your investing game?

We want to know!

Please send an email to [email protected] to submit your answers!

Part 3 of the 5-Year Review Miniseries. The BRRRR Method: Does it Still Work? (Real Estate Pro Reveals All)

Jenny Bayless is back with part 3 of the 5-year review miniseries using the BRRRR method -if you need a refresh, check out part 1 and part 2-. In this episode, Jenny dives into the details of each step of the BRRRR method, discussing the importance of finding the right property, calculating the potential return on investment, managing the rehabilitation process, tax regulations, insurance costs, finding tenants that will take care of the home, and refinancing at the right time. She also shares her lessons, mistakes, and crucial tips like understanding what a seasoning period is, why you should always get a sewer scope inspection, and more.

Jenny purchased the first home in 2017 from a wholesaler at $113.000, put 10% down, and funded the rehab which was about $25.000. Now the house is rented at $1,425 with amazing tenants that love the space. One important concept to mention is the seasoning requirement and which is the amount of time that has to pass between your original loan on the property and when the bank is ready to give you a cash out on a new loan on the property.

This episode is an excellent resource for anyone interested in real estate investing and looking to turn a distressed property into positive cash flow through the BRRRR strategy. Learn how Jenny managed to buy more properties from 2017 to 2022, and get insider knowledge on how to start building your real estate portfolio today!

If you already have a portfolio, optimize it with our in-house consultants for cash flow, appreciation, and generational wealth.

We want to know what you want to hear! What struggles are you having in your real estate investing journey? What have you stumped? What will help you level up your investing game?

We want to know!

Please send an email to [email protected] to submit your answers!

Jenny Bayless is back with part two of her miniseries on five year holds, and this time she’s sharing her personal success story of a property that she purchased with no money out of pocket and has kept the same tenant for five years. Follow along as she explains how she took a negative cash flow property and transformed it into a positive cash flow property, while also providing tips and tricks for keeping a good long term tenant happy during the renovation process. This is the ultimate example of a successful five year hold – it’s easy to manage, requires no extra investment, and has generated profits year after year.

Jenny’s journey started with a great deal on an estate sale property in 2017. With some exterior renovations, she was able to make it more saleable and secure a hard money loan for $120,000. But that was just the beginning – she added value to the property by upgrading appliances and replacing the carpet with laminate flooring. Despite a negative cash flow in the first few years, Jenny persevered and made substantial improvements to the property. She even did a cash out refinance and extracted $50,000 with no money of her own invested!

Now, fast forward to 2022, and Jenny’s profits are soaring. She’s made up for the initial negative cash flow and is walking away with $9,500 in profits. And get this, she didn’t even have to do any major renovations or repairs! With a repair budget of $2,000, her total profit was a whopping $9,500.

Don’t miss this episode full of valuable insights and real-world examples of successful real estate investing. Tune in now!

We want to know what you want to hear! What struggles are you having in your real estate investing journey? What has you stumped? What will help you level up your investing game?

We want to know!

Please send an email to [email protected] to submit your answers!

Check out the podcast or YouTube video to hear the full conversation with Envision Advisors agents Jenny Bayless, Preston Newberry, and Jeff White. We talked about stats, creative deals we’re seeing, and and our predictions for the future.

-1.9% in Jan ’23 vs. a 2.3% premium in Jan ‘22

Note: The above Executive Summary is from Lon Welsh of Your Castle Real Estate.

If you’re interested in buying an investment property and want to know what’s on the market now, sign up for our weekly deals list email.

This miniseries is all about reflection. Taking a look back to see how properties perform from the very beginning to five years in. As I sat down and looked at the numbers for this single-family home in Colorado Springs, it is clear that while expenses might rise a bit, income does too. This is a great example of a simple Colorado Springs rental property appreciating over time.

We bought the property in the fall of 2018. I found the home on Facebook. Someone had posted a Coming Soon on a Colorado Springs Real Estate Facebook Group, and I responded to the post. They wanted $150k for it, which I thought was reasonable. Overall, it was a solid house. I reached out to the person listing it, and we rushed down there to see it the next day. It had great bones, so we went ahead and locked that up for $150k, and got to work rehabbing the house. We got new windows, new appliances, and there were a few electrical issues that the seller actually gave us a credit to correct them.

I personally painted the interior and exterior of this Colorado Springs rental, so it took me a really long time to do it. But I got rid of the mustard color on the outside and made the interior more neutral and appealing to renters. All in all, we didn’t put a ton of money into it to get it updated. We purchased it with a private loan. I’ve seen properties in this neighborhood sell for about $350k, but I would think ours is worth about $280k. Resale value aside, it’s a great rental property. We made about $4500 that first year with a net operating income of about $2000 for the year (which does incorporate mortgage interest, which is technically not a part of Net Operating Income). Once depreciation was factored in, we actually had a net taxable income of -$872. 

2019 was the first full year of operations. We had a rental income of about $14k. We experienced an insurance increase, which brought down our net operating income. Mortgage interest for 2019 was $8300 for the year. That made our net operating income $3000 for the year with a net taxable income of -$1600 for the year. This is a good showing of your typical first year expenses.

In 2020 we made exactly the same income for that year as we did in 2019. We didn’t raise rents because we had a good tenant. We did refinance the house to a 4% interest rate in 2020, which we knew would help us in the long run. Our tax expenses went up because Colorado Springs does assessments every other year. Our mortgage interest went down due to amortization. So, our net operating income for 2020 was $6400. With depreciation, our taxable income was $1800.

Our rental income went up in 2021 because our tenant left, so we had an opportunity to increase rent for the new tenant. With Colorado Springs rental demand high after the pandemic, it was easy for us to increase rent to market rent for the next tenant. We increased the monthly rent from $1195 to $1550 between the two years. Since we got a new tenant, we did have to deal with tenant turnover expenses. One expense that I paid for during this tenant transition period was getting a Matterport 3D tour. It cost about $200 and it saved my time because prospective tenants could explore for themselves without having to do a showing.  

Our expenses in 2021 were mainly cleaning and maintenance. Insurance increased by over $100. Mortgage interest went down due to amortization. We had to pay for repairs to the fence before the new tenant moved in. Taxes went up just a few dollars. So, our net operating income was $5600. With depreciation, our taxable income was $1000. I will say turnover costs are an underappreciated cost when it comes to real estate investing. Cleaning and maintenance totaled $1500 just to take care of typical renter turnover items. Definitely, something to keep in mind. 

In 2022, our insurance went down by about $100. I asked my insurance broker to shop us around, so we got a better deal. Mortgage interest went down due to amortization. Repairs were minimal at $600. Taxes were assessed in 2022, so they increased to $775. Net operating income was $10,000, then minus depreciation, the net taxable income was about $5500. 

After 5 years, I can say this was a good investment property for us. Putting the numbers down, it was good to see the trends in income and expenses. Understanding the need for incremental increases in rent to be consistent with the market and with rising expenses is critical. This helps you continue to see the income increases you want year over year.

Jenny Bayless is an investor-friendly agent with Envision Advisors, Colorado real estate investor, and the host of the Colorado Springs Real Estate Investing podcast. Connect with Jenny by emailing her at [email protected].

Colorado Springs and Southern Colorado is such a stunning place to live which is why Leah is proud to call it home. With deep roots in La Veta, Colorado, she came to the Colorado Springs area in 1995. Since becoming a licensed Realtor, Leah has gained experience working with first-time home buyers, investors, and also in vacant land sales. Leah has a wealth of knowledge in the Pueblo area, which we are predicting will be a hot market for 2023. She was Rookie of the Year, and in 2022 was the Top 2nd Year Agent at Your Castle Real Estate. I sat down with her to recap her 2022 investing goals and to see what lies ahead for 2023.

Leah’s goals for 2022 were:

Congratulations are in order–Leah is about to close on her nomad™ property, which she will move into in a few months. Leah said she saved for her rental property and personal reserves, but did not quite achieve the 5% for her Pueblo property, so that will transfer to her 2023 goals. Leah was instrumental with the Pueblo expansion in 2022. The market definitely threw a wrench in those plans, but the Pueblo market is starting to really heat up now. Finally, Leah did go to Hawaii…twice! And achieving a healthier work-life balance is a work in progress for her. This became Leah’s first goal for 2023 because she didn’t do this in 2022. 

Since Leah didn’t make her 2022 goal of better work-life balance happen, she is making time management a priority in 2023. That includes setting boundaries for when she works and when she steps away from work to focus on self care. 

In order to achieve her goal of saving 5% for her Pueblo property that she plans to buy in 2023, she will need to overhaul her budget. Leah wants to eliminate any extraneous expenses, such as the many subscriptions she has. There is an app called Rocket Money that helps you identify subscriptions, manage bills, and even cancel recurring charges with a single click. 

Leah also wants to push herself to participate in more investor meetups. She says she is admittedly a bit shy when it comes to these events, but they really are fun and a great way to grow your network and learn from fellow investors. 

Finally, Leah wants to close at least 35 deals, with 12 of those being in Pueblo. I can see our clients being more interested in Pueblo than Colorado Springs in 2023. With the growth in Pueblo and the UC Health partnership with Parkview Medical Center, there are lots of opportunities in Pueblo. 

Leah also sees the value in investing in Pueblo, which is why she is targeting a simple 3 bedroom/1 bathroom single-family home in Pueblo for under $200k for her 2023 investment property. Since Leah is just starting out with investing for herself, she wants to begin with something simple. Leah plans to self-manage to gain the experience before transitioning to a property management company. It’s always good to start out self-managing your properties, in my opinion. It’s easier to assess what kind of property manager you are looking for after you’ve done it yourself.

If you’d like to invest in Pueblo or learn more about the market, Leah is a wealth of knowledge. She works tirelessly for her clients (but remember, she is striving for some work-life balance!). She’s familiar with multiple Southern Colorado markets and will go above and beyond to help her clients achieve their Real Estate investment goals. You can connect with Leah by emailing her at [email protected].

Before becoming a real estate investor, Jordan Malara started his career in a very traditional job. He read “Rich Dad, Poor Dad,” by Robert T. Kiyosaki and Sharon Lechter and thought maybe investing was something he could do. Well, he was right, and he crushed his investing goals in a short amount of time. I sat down with Jordan and got to the bottom of how he grew his portfolio from zero to 12 units in 4 years.

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Jordan bought his first home thinking he would change it to a rental. The key to his success was simply keeping costs as low as possible. “I didn’t really know how to analyze a deal, but I did try to spend less than what the average buyer was spending. There wasn’t really much beyond that,” Jordan said. He still owns his first home, and it’s been a great long-term rental for him. One great lesson he learned was that holding a property is key to building wealth. As Jordan says, it’s not about when you buy a property; it’s that you buy something and let the power of time do its thing. The power of time in real estate is a real thing.

Going into the second property, Jordan and his wife approached it much more like an investment. Jordan went to a local meetup and met someone who introduced them to house hacking and walked him through the numbers, which was immensely helpful. This helped Jordan really get into investing and they still work together today.

Jordan was looking for a duplex to house hack. They bought a duplex in Ivywild, a subdivision of Colorado Springs south of downtown, west of Cascade Avenue and along Cheyenne Creek. It is one of the city’s oldest working-class neighborhoods and has recently seen a revival. Jordan knew this area was going to be developed, although it wasn’t quite there when they purchased it. The future opportunity informed their decision to move to this area. 

The property at a glance:

Which level did they live in? The smaller one! Jordan and his wife made the tough decision to downsize in order to maximize their returns. Although they had to sell furniture and live differently than they had before, they remained motivated by keeping their long-term goal in mind. The upper unit was rented above market price, so it completely covered the mortgage on their lower unit. That was the moment Jordan said a lightbulb went off and he realized that real estate investing works! They were living for free. 

Financial freedom is great, but it’s not without sacrifice. Everyone’s goal is autonomy of time, or some kind of freedom. Jordan shares that to achieve financial freedom or a “soft retirement” you have to make sacrifices. For him, these were the sacrifices he was willing to make:

It’s hard when you’re just starting out as a real estate investor, but I tell everyone it’s a good idea to self-manage your investments at first. You learn faster. Then when you grow and can afford a property manager, you can more effectively leverage them because you’ve lived it. The sacrifice up front pays off later.

The next property Jordan was looking for was a duplex or triplex. It was a competitive time, so they wanted to get creative about how they got into their next project. They found a mediocre single-family home in old Colorado City. It was a 2/1 and they took the basement, which had a separate entrance, and added a bedroom/bathroom. Then after 9 months, they converted the garage to an ADU. Now they use those as three medium-term rental units.

Then they purchased another investment property Jordan and his wife chose not to live in. It qualified for a short-term rental permit. There was a detached garage that they converted into a two-bedroom, two-bathroom cottage. It took them about a year to do that and renovate the main house. They purchased the home for $465k with a hard money loan, so 90% was funded. They spent $175k on renovations and then refinanced – it appraised for $775k. Another successful investment that resulted in two additional units. 

Jordan bought a new house in September 2022 that already had a detached cottage. He actually found it on Facebook. There was a wholesaler trying to offload it. After some investigation, it turned out the person who listed it didn’t have the right to exclusively list the property, so they asked the seller if we could work out a deal. The property had three entrances to the house on different levels. So, Jordan separated the house into two short-term rentals. They live on the main level. Jordan hasn’t quite finished renovating all the units, but the basement is up and running. He now has a blend of short-, medium- and long-term rentals. Their long-term rentals are with property management. Jordan says an important aspect of real estate investing is to do what you enjoy most. He enjoys working with STRs more than LTRs. Maybe that’s because you hear more positive things from STR guests than from LTR tenants. Whatever it is, Jordan is happy to manage the STRs and have property managers work with his LTR properties. Now he can be more selective about what he wants to spend his time on. 

Jordan’s investing goal was 10 units in 10 years. He crushed that goal and is already at 10 units, and they accomplished that in 4 years! In fact, as of today, Jordan now has 12 units total. Because of that, Jordan’s not looking to purchase anything else right now. He’s in a holding pattern so that they can identify where they can add value to their existing properties. Jordan says, “I want to preserve and protect.”

Jordan’s best advice to a new real estate investor is just to get started. “You don’t have all the knowledge right away when you start out. The truth is you will never know exactly the outcome on investing, but you just have to do it.” Jordan was willing to take on the risk that he didn’t know everything, but he knew that he would figure it out. They bet on themselves and were surrounded by people who wanted to help. There’s always some unknown with every real estate deal. Even after you’ve done some deals, it doesn’t mean it removes that discomfort. Jordan says to embrace the discomfort, move forward methodically, and continue to invest. “It will be hard, but if it wasn’t everyone would be doing it.”

Jordan is a real estate investor and agent that, in partnership with his wife, has built a portfolio of rental properties through house hacking and furnished rentals. Jordan’s primary investment strategy has been to purchase one house a year to house hack and overtime have worked up to large scale value add renovations, such as full house renovations and ADU garage conversions. You can connect with Jordan on Bigger Pockets.

Now that we’re in the new year, I want to reflect on my 2022 investing goals and share my plans for 2023.  These are the goals I’m putting in the 2023 Guide to Colorado Real Estate Investing Strategies.  Check out our submission guidelines to include your investing goals in our annual, crowd-sourced book.

This may be surprising, but one of my main focuses this year is getting my personal finances a little tighter and not necessarily investing in real estate.  I increased my personal spending quite a bit over the past year, and I’m doing my homework to figure out where that spending is coming from.  My husband and I have been tracking our expenses for close to a decade now, so my plan is to take a deep dive into the finances and see what areas have grown and what we can do to mitigate the expenses.

Our family size has doubled in the past couple of years, and we’re not as frugal as we’ve been in the past.  I want to identify expense categories and see if we have alternative options.  For example, I noticed our auto insurance increased significantly, so I reached out to my insurance broker and got a couple of quotes from other major carriers.  I was able to reduce that expense by 40%!  While I’m not clipping coupons, I am seeing if there are easy wins that can save my family money. 

If possible, I’d like to reduce our personal living expenses by 25% of last year’s spending, getting us back to our 2021 level of spending.

How does this relate to real estate investing?  My husband and I are focused on finding the rental property number we need to be able to retire.  If our rental properties aren’t adequately covering our expenses, then our investing goals will change.  If there’s a way to reduce spending to keep the original number, then we’ll adjust.  However, if we truly are living a more expensive lifestyle, we need to adapt our rental property goal.

During my first acquisition phase of real estate investing, I bought 10 properties between 2016-2018.  From 2019-2020, I didn’t buy any.  Instead, during that time I sold two properties and parlayed the proceeds into purchasing a family home.  But most importantly, I worked to get the remaining properties stabilized and managed efficiently.  I figured out a lot of the bugs from self-managing, took care of major projects, and got the properties exactly where I wanted them.

From 2021-2022, I purchased more properties, adding eight units to my portfolio in 2022 alone.  My goal last year was to purchase just four properties, so I doubled that goal. 

Thus, my 2023 goal is very boring: I don’t want to buy or sell anything, just stabilize what I acquired in phase two.  My plan is to get these properties to run like well-oiled machines by making capital improvements and increasing their efficiency. 

This is important for my strategy because I don’t want to get caught up in buying and not be able to maintain my current trajectory.  Once I make sure they are performing well and there are no duds, then I’ll look into buying more properties. 

Last year, I wanted to publish 52 episodes of the podcast, with at least 6 focused on Pueblo.  In the end, I published 51 episodes, though I technically recorded 52.  Since I took some leave during the year and the general purpose was accomplished, I call that a win. 

This year, my goal is to publish another 50 episodes.  I want to keep getting Colorado Springs and Pueblo market information published on an ongoing basis so investors are well-informed. 

In 2022, I wanted to increase the number of closed transactions by 30%, 15% of which were Pueblo.  Our team came pretty close to that goal, so I’m happy for us.  While I’m not making excuses, the market threw a wrench in our plans, and people’s sentiments changed midway through the year.  However, we’ll keep looking for new resources and strategies to help our clients. 

This year, I want to match the team’s transactions from 2021.  I’m not increasing this goal because right now, buyers and sellers are very confused about what’s going on, the market is volatile, and I think a lot of people are waiting to see how things land.  I wouldn’t be surprised if it takes the next few months for people to start transacting again. 

I hope sharing my investing goals for the year will help inspire and clarify your own goals.  Reach out to me with any questions, and be sure to share your goals in the 2023 Guide to Colorado Real Estate Investing Strategies.