Why Multifamily Real Estate Investing is Heating Up in Colorado and Idaho

Here’s the secret behind the enormous growth in multifamily real estate syndication in the Rocky Mountain region.

Here in the Rockies, Colorado has been one of the country’s hottest real estate markets for years. Denver is experiencing an unprecedented population explosion and other Rocky Mountain cities are seeing the same kind of incredible growth, especially among renters looking for apartments and other multifamily housing options.

In addition to Denver, cities like Colorado Springs, Aurora, Greeley, Boise, and Rexburg are some of the fastest-growing cities in the nation. Rental properties commonly sit at 100% capacity. For property investors, this makes Rocky Mountain cities some of the best places to invest in multifamily real estate.

What’s Multifamily Real Estate?

If you’re not yet familiar with multifamily real estate in the Rocky Mountain region, let us introduce you to it. The term refers to buildings and communities that house numerous people and families. Picture apartment buildings, condos, mobile home parks, and sometimes even lifestyle-adjacent properties like storage facilities.

In the investment world, this is a lucrative investment opportunity for groups of investors who come together to make money on the best places to invest in multifamily real estate. Investments are often handled through real estate syndication, which is explained in more detail below.

Multifamily real estate investing is a smart choice because it brings large returns, offers a reliable source of income, and is lower-risk than other types of investments. Plus, if you handle it right, it’s a passive form of investing that brings returns without much time or hassle. 

A Brief History of Rocky Mountain Multifamily Housing Trends

To understand why the Rocky Mountain market is so hot right now, you have to take a quick look at the past. Shared housing has existed since the start of humanity, and modern multifamily housing is simply the latest version. 

Early “flats” arose in Victorian England, where poor families gathered in cities to find less expensive options than the sprawling mansions bordering the city. Apartment living had another big boom in popularity near the start of the First World War and again as World War II ended when U.S. families were struggling to make ends meet. 

People have always needed small, affordable living spaces in busy towns and cities. Here in the Rocky Mountain region, numerous new trends have impacted the latest surge in multifamily housing:

• Apartments have become more luxurious while staying fairly affordable.
• Amenities like pools, spas, and workout rooms are attractive to renters.
• Suburban living is growing in popularity, creating demand for multifamily housing.
• The booming tech sector is attracting people to jobs in certain cities.
• Investors have found innovative new ways to approach financing multifamily projects like real estate syndication.
• The COVID-19 crisis impacted housing and the economy by making people want more affordable apartment-style living.
• Remote working from home has become much more common.
• The Rocky Mountain region is one of the hottest in the nation. See more below!

Why is Multifamily Investing So Hot in the Rockies? 

Real estate investors, Colorado and Idaho are your best bets for new investments. They’re attractive places to live for young families and up-and-coming millennial professionals. There’s an irresistible combination of natural beauty, outdoor recreation, housing options, and endless career opportunities.

Net migration research shows that Colorado and Idaho have both seen a significant net migration of residents, with Colorado gaining 29,546 and Idaho gaining 5,840. People are primarily migrating from more rural and urban zones to the suburban areas surrounding cities in Colorado and Idaho. 

Denver remains one of the best real estate investments in Colorado and is world-famous as a gold mine for investors. In addition, Idaho real estate investors have seen their Boise property values rise rapidly in the past decade. Smaller Colorado and Idaho cities are now experiencing the same effects.

Wondering where to invest in multifamily real estate? Today, some of the best cities to invest in multifamily real estate include:

• Denver, CO
• Colorado Springs, CO
• Aurora, CO
• Greeley, CO
• Boise, ID
• Meridian, ID
• Nampa, ID
• Rexburg, ID

These Stats Show the Boom in Multifamily Real Estate Interest in Colorado and Idaho: 

Colorado

• 50% of Denver residents rent their homes, which is far above the national average of 35%.
• Denver is ranked as #12 among all American cities for young professionals and #15 for outdoor activities.
• Denver gets an “A” for economic and ethnic diversity and also has a large number of A+ ranked schools.
• In Colorado Springs, 41% of residents rent their homes, which is significantly above the national average.
• Colorado Springs has an “A” ranking for economic and ethnic diversity, public schools, and nightlife activities.

Idaho

• 39% of all Boise residents rent their homes, which is higher than the national average of 35%.
• The median rent in Boise is $957, which is lower than the national average and makes it an attractive area for renters.
• The suburban neighborhoods of Meridian, Idaho are just 15 minutes from downtown Boise, which makes this area a popular place to rent a home.
• Rexburg, Idaho has become a hot city for renters because its average rental price is about $300 below the national average.

Sources: Niche, PropertyManagement

Making Money on Your Passive Investment

Multifamily property investment is a form of passive investing that generates financial value with minimal work on the part of the individual investor. You can make money without extensive investment knowledge, education, or skill. 

That’s why the phrase “put your money to work for you” is a common way of describing passive investing. Your sponsor/partner handles the heavy lifting of managing the investment and reporting back to you.

Plus, the sponsor in real estate syndication is the person or company that identifies potential new investment projects, secures the properties, and improves the investment value with thoughtful wealth-building techniques. You just sit back and wait to make passive income!

Understanding Rocky Mountain Real Estate Syndication

One of the best ways to start investing in multifamily housing in the Rockies is through real estate syndication. Real estate syndication involves a sponsor-investor relationship where the sponsor locates investment opportunities and the investor passively participates in a lucrative investment project.

The syndicator uses its vast intellectual, financial, and real estate resources to find high-yield projects in the Colorado or Idaho areas that deliver profitability for everyone involved. They also add value to the project through remodeling, rehabilitation, remarketing, and other techniques that reliably build value. Income from the investment property arrives through rental income and, sometimes, property sales.

Life Bridge Capital is an example of a successful real estate syndicator that works with groups of investors on major multifamily investment projects in the Rocky Mountain region, including Colorado and Idaho.

Millennials Love Multifamily Housing in the Rockies

Multifamily housing has a huge future in the U.S. It holds a strong attraction for millennials and Gen Z-ers who don’t have much interest in homeownership. They’d rather rent as a lifestyle choice and spend extra money on entertainment and travel.

• 6 in 10 millennials who want to move are interested in going west, including the Rocky Mountain region and particularly the Denver and Colorado Springs areas.
• Colorado is the #2 state in the nation for millennial movers and Idaho is at #9.
• Younger adults are less interested in buying than renting due to the surge in home prices since 2017.

5 FAQs About Multifamily Investing

Q: What kind of income could I see from multifamily investing?

A: Every project is unique, but it’s not unusual to see 21% annual investor returns on new projects with Life Bridge Capital, which is currently paying out the full preferred return on all deals without missing a single dividend. The goal is to deliver steady, reliable returns.

Q: How involved do I have to be in the investment?

You can be an extremely passive investor with little to no daily involvement with your investment. Your sponsor handles the main workload and provides you with informative updates along the way.

Q: How will multifamily investing affect my taxes?

A: The tax implications are generally very positive. Of course, you should always consult a financial or tax advisor before making any new investment.

Q: Why focus on multifamily investing in the Rockies?

A: The Rocky Mountain region is exploding with new population growth, especially among younger adults who prefer to rent rather than buy housing. Several of the nation’s hottest housing markets are located here, and multifamily real estate investment helps you make money on this opportunity with minimal risk, time, or stress.

10 Eye-Opening Multifamily Trends in the Rockies 

1. During a time when the nation’s population grew just 7.4%, Colorado’s population skyrocketed into 15% growth. Broomfield and Weld Counties in particular had an explosive 30% population growth.
2. Colorado has almost 1 million more people than it did a decade ago. Between 2010 and 2020 alone, the area gained about 775,000 new movers. When you combine this with extremely high homeownership costs in the area, multifamily housing is a prime target for new residents.
3. Suburban Idaho home costs are up a staggering 32%, especially in popular Ada County. At the same time, home values now regularly exceed $500,000 in this region. This is making home buying far less popular while the demand for rentals rises sharply.
4. Bell Policy, a national watchdog group, ranked Colorado at the top of its list of U.S. cities with changing demographics that put homeownership out of reach for the middle class and caused people to seek large multifamily housing.
5. Amazon just bought a $9 million facility in Colorado Springs, attracting thousands of new job applicants to the area. These new residents need multifamily housing.
6. Idaho now leads the country in population growth, gaining 53,000 new movers within the space of a year, which notably happened during the 2020 COVID-19 pandemic.
7. Idaho’s population gains have endured for more than a decade, making it the country’s #1 new-mover state between 2010 and 2020 with a gain of more than 271,000 people who moved from other states to Idaho.
8. The Boise area has a low rental vacancy rate of 3% to 4%, showing the need for additional multifamily housing as soon as possible.
9. Idaho’s booming population and tight rental market are two factors that landed it on a state list of vulnerable areas for potential homelessness. Additional affordable housing is desperately needed in Idaho.

The entire region’s economy and housing markets are booming with no end in sight, redefining the meaning of “Rocky Mountain high”! New home prices are up at least 19% in Colorado, at least 9% in Idaho, and home values regularly exceed $500,000 in most of the Rockies. This makes multifamily real estate investing a smart choice that provides local people with affordable housing, all while building your personal wealth.

How to Start Investing in Rocky Mountain Multifamily Deals

If you’re reading the information on this page and starting to get excited about investing, we don’t blame you! Here’s how to start investing in multifamily real estate.

First, educate yourself about the basics of real estate syndication and see what kind of investor you are. Do you prefer passive investing? Do you like the idea of focusing on other things in your life while your investment does the work for you? If so, you’re a good candidate for a multifamily investment deal.

Next, find a real estate syndication partner in the Rocky Mountain region that has a strong track record for finding lucrative projects and delivering positive results for investors. Ask the syndicator questions about how to invest in multifamily real estate to help you understand whether or not you’re a good match.

If you’re new to this process, click the link below to read a guide that’s custom-made for real estate investment beginners. It shares tips and tricks that will save you from making mistakes in your multifamily investment journey.

Ready to Rock an Investment in the Rockies?

The Rocky Mountain region is booming with new residents and soaring with new investment opportunities. Profitable new real estate projects are becoming available every day. To learn more about investing in real estate in Colorado, Idaho, and beyond, contact Life Bridge Capital.

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