As we wrap up this year, investors in the Denver real estate market are beginning to see a slight reduction in the number of REO listings causing the inventory to move at a much faster pace than we’ve seen in recent months. Over the last several years the MyH-O-M-E.com team has published a DAILY SPREADSHEET of new foreclosure listings with their equity spreads for our loyal investors. We have noticed that our list has shrunk over the last year by nearly 30% which is consistant with the overall reduction in foreclosure filings throughout the state. Two years ago, Colorado had the dubious distinction of leading the nation in foreclosures, but it appears that this market is forging its way toward balance ahead of most.
What does this mean for the investor? For the serious buyer it means that even though there continue to be great deals there are just fewer of them and the competition is greater. As I pointed out a month ago, the average sales price for an REO listing in the Denver area is 101% of the list price, and I believe that we will see that spread increase as more buyers vie for a property. Word has spread in the Denver area that the MyH-O-M-E.com team maintains a steady inventory of bank owned listings. This has caused agents representing investors to call our office regularly wanting to learn what properties might soon become available. They recognize the need to get a jump on the competition and our last three Denver bank owned properties went under contract the day they were listed.
For the sideline investor who has been waiting for the market to bottom out before jumping in, I would suggest that you may have waited long enough. If your intention is to create real estate wealth, then the time to act is now. Break through your paralysis, you’ve analyzed the Denver real estate market and you’ve seen countless deals that you wished that you had moved on get grabbed up by someone else. Unless you actively get into the game now, you will likely live to regret your hesitance. I would recommend that you contact an agent who understands real estate investing in the Denver area and allow that agent to help you to assemble a team that will help build your wealth. You don’t have to do it by yourself!
That said, here’s a rough gem. It’s probably not for the first timer nor the faint heart unless there is construction experience lurking in the background. The broker’s remarks on this listing indicate tha there is no furnace (not a big deal) and that there could be structural concerns (not a big deal, either, if you know how to handle it). This REO home is in the city of Westminster, just north of Arvada, and its price tag of $84,900 clearly acknowledges the sort of rehab work that this property may require.
But let’s look at the upside! With six bedrooms, two bathrooms, this 1900 square foot ranch might easily sell for $160,000, but I might recommend that this property be held as a rental because even though our foreclosure rate is diminishing, our rental vacancy rate has also been reduced, and with six bedrooms, this home could provide good shelter for a large family.
To gain more information about this Denver investment property, please contact us and we will help out in any way you need.
Posted by: Dave Perlowski
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