AI Insight
Opportunity
Central City's growth trajectory, combined with Colorado's strong rental market fundamentals, suggests increasing demand for modern, affordable units. This property is well-positioned to capture that demand with its tenant-centric amenities.
AI Insight
Opportunity
For investors seeking to enter or expand in multifamily, this asset offers a manageable scale (18 units) with strong cash flow, making it an ideal platform for future acquisitions or a standalone investment.
AI Insight
Strength
The 5.70% cap rate provides a solid current yield, while the new construction and Class C positioning allow for rent growth through minor upgrades, potentially boosting the cap rate to 6.0%+ within 2–3 years.
AI Insight
Strength
As a 2025-built asset, the property reduces near-term capital risks and operational headaches. Features like community Wi-Fi and controlled access lower turnover costs and enhance security, supporting stable NOI.
AI Insight
Strength
The property's amenities (e.g., elevator, bicycle storage, 24-hour access) cater to modern renter preferences, differentiating it from older Class C properties and supporting higher occupancy rates and tenant retention.
$5,800,000
Investment Value
5.70%
CAP Rate
📈
Strong 5.70% cap rate vs market average.
$330,380
Annual NOI
💰
High NOI demonstrates strong operational efficiency.
13,454 SF
Rentable Area
🏢
Optimal size for institutional investors.
0.0%
Occupancy Rate
✅
Exceptional occupancy exceeding market.
$431.10
Price per SF
🎯
Attractive price per SF vs comparable properties.
Model your investment returns and cash flow projections
Down Payment Amount:
$2,125,000
Loan Amount:
$6,375,000
Monthly Mortgage:
$34,234
Monthly Tax:
$8,365
Total Monthly Payment:
$42,599
Monthly Cash Flow:
$1,234
Cash on Cash Return:
8.7%
Cap Rate:
6.2%
Debt Coverage Ratio:
1.54x
IRR (5 years):
12.3%
Projected Property Value:
$9,854,932
Total Equity:
$4,567,890
* Calculations are estimates only. Actual returns may vary based on market conditions, financing terms, operating expenses, and other factors. Consult with financial and legal professionals before making investment decisions.
Investment Due Diligence FAQ
Key questions for informed investment decisions
What is the investment thesis for this property?
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This property offers a compelling buy-and-hold opportunity centered on immediate cash flow and long-term appreciation. As a newly constructed (2025) 18-unit multifamily asset in Central City, CO, it combines modern Class C affordability with strong financials, including a 5.70% cap rate and an NOI of $330,380. The investment thesis leverages the property's turn-key condition, scalable entry point (price per unit: $322,222), and tenant-centric amenities to capture stable returns in Colorado's growing rental market, with potential upside through strategic rent increases and operational efficiencies.
What are the key financial metrics and projections?
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- **Sale Price:** $5,800,000
- **Price per Unit:** $322,222
- **Price per Square Foot:** $431.10 (calculated)
- **Cap Rate:** 5.70%
- **Net Operating Income (NOI):** $330,380
- **Building Size:** 13,454 SF
- **Units:** 18
The property provides immediate cash flow with a solid cap rate. Projections suggest potential rent growth due to new construction and amenity advantages, which could elevate the cap rate to 6.0%+ within 2–3 years through minor value-add initiatives. The NOI is supported by low maintenance costs from the 2025 build, enhancing cash flow stability.
How does the location and market impact the investment?
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Located in Central City (ZIP 80427), Colorado, the property benefits from the state's dynamic rental demand and growth in secondary markets. Central City offers a balance of affordability and accessibility, appealing to renters seeking modern amenities outside urban cores. The area's development trajectory, coupled with Colorado's strong economic fundamentals, positions this asset for increased demand and potential appreciation. However, as a Class C property in a smaller city, it may face moderate sensitivity to local economic shifts, necessitating careful market monitoring.
What are the primary risks associated with this property?
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- **Market Volatility:** As a Class C asset in a secondary market, it could be more exposed to local economic downturns or rental demand fluctuations compared to primary urban areas.
- **Concentration Risk:** With only 18 units, vacancy or non-payment by a few tenants could disproportionately affect cash flow, requiring proactive tenant management and reserves.
- **Data Gaps:** Missing details on zoning, tax rates, parking ratios, and lot size may limit future development planning or operational assessments.
- **Operational Dependence:** While amenities like 24-hour access and community Wi-Fi reduce turnover, reliance on consistent property management is crucial for maintaining NOI.
What value-add opportunities exist to enhance returns?
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- **Rent Premiums:** Implement smart home features (e.g., smart locks, thermostats) or upgrade common areas (e.g., lounge, fitness space) to justify rent increases without major capital outlay.
- **Operational Efficiency:** Leverage the new construction's energy-efficient systems and add solar panels or water-saving fixtures to reduce utility costs, boosting NOI.
- **Tenant Retention Programs:** Use amenities like bicycle storage and community Wi-Fi to foster tenant loyalty, lowering vacancy costs and turnover expenses.
- **Market Positioning:** As Central City grows, rebranding or minor exterior upgrades could elevate the property's appeal, attracting higher-quality tenants and supporting long-term appreciation.
These opportunities align with the property's "Modern Tenant Amenities" and "Scalable Multifamily Entry" tags, offering actionable paths to increase cash flow and asset value over a 3–5 year hold period.
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