Denver ranks high on the list of ‘recovering real estate markets'. Among many American investors, we are servicing Asian, Isreali and Canadian Investors too. Many are buying residential and small commercial properties as buy / holds. If you are new to real estate investing, please read on:
Our unemployment rate is one of the lowest in the Country, and we are not daunted by the recent layoffs. Denver remembers the 12% unemployment of the 1980"s - trust me when I tell you that Denverites KNOW how to get back up on their feet! A 6.5% unemployment rate simply signals that we need to step up our efforts to secure new business and help our current employers grow. (See this website for fantastic statistical information: http://www.metrodenver.org/site-selection/real-estate ) Real estate investments are here, and this attracts the good, the bad and the ugly.
We are diligently working on our transit systems and, in employment attraction, we strive to balance industrial, technology, alternate energy, oil and gas, and medical jobs. Coupled with a strong interest in sustainable and green building, Denver is emerging at the leader in laying a solid foundation for a long-term sustainable community.
The experienced and smart investors are hiring talented Realtors and other qualified professionals to assist them in their purchases. There is also a pool of new and unseasoned buyer - I call them the "Flip this House TV Crowd".
Many who new to RE investing are following the "formulas" touted by Investment Seminars and private (packaged) coaching programs. I occasionally work with (or refer) Investor Buyers who are graduates of some of these training programs. Typically, their interest is in the cheapest deals for fix / flip. This usually translates to the highest risk neighborhoods with a high level of competition.
I want to offer some food for thought to help new residential investors assess where and how to invest for optimum business success - and for the long term sustainability of the target neighborhood. (After all, you may want to invest again in this community in the future!)
Shop where there is less competition - If you are bidding in a high risk area that is a frenzy of other Investor competition, you are competing with any number of Investors who are new and unseasoned to the game. Perhaps they attended the same training you did. The properties are cheap and EVERYONE wants to buy low and sell high. However, recent statistics indicate some of these neighborhoods that experienced high activity last year are now devaluing further. (Take note; not all neighborhoods in Denver are continuing in decline.)
Consider Buy / Hold properties - Foreclosed families cannot buy a home until they have repaired their credit. Most are still employed and need a place to lease - with all their belongings in tow. This could be built-in tenant retention plus the person you sell your rental to in coming years!
Research, research, research! Even seasoned investors forget this tip. Study the history of the neighborhood(s) you are interested in. Whether an f/f or a buy / hold, if you know your market, then you will also have a picture of who your customer will likely be. Understand to whom and how you will market your property. Budget appropriately - NEVER skimp on sales or marketing. If market research and risk assessment are new to you, hire a qualified coach to train you or to perform the assessments for you.
Marketing Plan / Exit Strategies - You have a house or building that you purchased in an investor-active neighborhood. What will you do to set your property apart from the rest of the pack? How will you remodel and advertise your property to sell faster that your competitors? What is your plan if the house does not sell quickly and you have a hard money loan or balloon payment due?
Hire a full service Realtor - For the buy and the listing. In this competitive market, you will need all the good help you can obtain to prepare your remodel, new build or rental to cash flow for you. Your business coach / consultant should be able to teach you how to interview and hire the perfect professional for your needs and geographic area.
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