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Thought the Denver cap rate thing was a scam, then my cousin's duplex in Globeville proved me wrong
I kept telling my cousin he was crazy paying $685k for a beat up duplex off 44th and Pearl because the numbers looked way too tight at a 5.2 cap. He showed me the actual rent rolls after he bumped both units to $2,150 and the taxes were way lower than I figured for that pocket. Is anyone else seeing cap rates compress that hard in the north side or is Globeville just its own little bubble right now?
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richard_dixon19d ago
That $685k on 44th and Pearl is actually not bad when you run the real numbers. I looked at a fourplex on Clayton near 38th last spring and the seller was asking $1.1M at a 4.9 cap, which felt insane until I saw the tax bill was only around $4,800 because of the way the county still has some of those lots classified. The catch in Globeville is the insurance, my buddy's place off 47th jumped from $2,800 to $5,400 in one year after the hail claims in that corridor. So the cap rate looks great on paper but you have to bake that in or the deal flips on you fast.
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