Blog > HUGE DEAL Multi-Family in Denver: 13% ROI Opportunity for Investors!
Denver Multi-Family Investment: 13% Cash-on-Cash on Lima St
Two side-by-side Aurora multi-family properties on Lima Street offer Denver investors an 8% cap rate duplex at $480K and a 9.7% cap rate 5-plex at $1M, with a rare combined development play.
What is the Lima Street duplex investment opportunity?
The duplex at 1408 Lima Street is listed at $480,000 and contains two 2-bedroom, 1-bath units.
The property sits in Aurora just south of Colfax, close to the Denver border. The current owner reconfigured the layout over the years for personal use, so a buyer would need to convert it back to two standard 2-bed, 1-bath units. There's flexibility here. You could shape one side into a 3-bedroom depending on your goals.
At 240 dollars per door, this works as a house hack, a straight rental play, or a Section 8 income property. The lot is just under 8,000 square feet, which matters when you factor in the 5-plex next door. Most units in this age range need about $20,000 in cosmetic rehab to hit top rent. Think LVP flooring, white cabinets, and quartz or granite counters to push rents to the high end of the market.
How do the duplex cap rate numbers actually pencil out?
With 25% down ($120K) and roughly $32K in acquisition and rehab costs, total cash in sits around $152,000.
Here's the rough breakdown I ran on 1408 Lima:
- Purchase price: $480,000
- Annual rental income: $52,800 ($2,200 per unit at Section 8)
- Vacancy: 5%
- Property taxes: $2,000/year
- Insurance: $2,800/year (insurance has been volatile in Colorado the last 24 months)
- Repairs and maintenance: $1,500/year
- Utilities (owner-paid for Section 8): $4,700/year
- Net operating income: ~$39,000
- Annual cash flow after debt service: ~$12,000
That puts you at a 7.7% cash-on-cash and roughly an 8% cap rate on purchase price. If you don't go Section 8 and you self-manage with tenants paying utilities, your expense load drops and your cash flow improves. Run your own numbers based on your financing and management plan.
What makes the 1440 Lima 5-plex deal stand out?
The 5-plex at $1,000,000 contains four 1-bedroom units plus one 2-bedroom end unit with a 900 sq ft basement.
The four 1-bedrooms mirror each other in a simple, repeatable floor plan. The real value-add lives in the end unit. The basement is already plumbed for a bathroom and has its own entrance.
You have two paths:
- Easiest rehab: Add a couple of egress windows, finish the basement with two bedrooms and a bath, and turn that end unit into a 4-bedroom. This is the cheapest path to higher rent.
- Higher upside: Add a kitchen downstairs and create a true sixth unit. More complex, more expensive, but better long-term income.
At under $200,000 per door for the 1-bedrooms, the per-unit basis is hard to find in the Denver metro right now. Commercial financing applies at five-plus units, so expect a slightly higher rate.
What kind of cash flow does the 5-plex generate?
Projected gross monthly rent runs $10,565, with $1,883 per 1-bedroom and $2,200 for the converted 4-bedroom end unit at Section 8 rates.
Running the numbers at a $1,000,000 purchase price with 30% down:
- Down payment: $300,000
- Acquisition costs: ~$11,000
- Annual rents (4 one-beds + 1 four-bed): ~$126,780
- Vacancy: 5%
- Property taxes: $4,000/year
- Insurance: $3,600/year
- Repairs and maintenance: $3,000/year
- Utilities: $11,760/year (owner-paid Section 8 assumption)
- Net operating income: ~$98,000
- Annual cash flow before tax: ~$40,000
That's a 13% cash-on-cash return and a 9.7% cap rate. I did not include property management in those numbers. Add 7% to 10% if you plan to hire it out. Even with management costs included, this is one of the stronger deals I've seen in the Denver metro at this price point.
Can you combine both properties for a development play?
Combined, the two lots total roughly 17,000 to 18,000 square feet, plus the small alley between them.
The current owner has lived at the property for about 40 years and has had conversations with the City of Aurora. The city has indicated willingness to work with a buyer on rezoning and on vacating the short alley stretch between the two parcels (the alley isn't a critical thoroughfare).
I can't tell you exactly how many units a developer could build. That's a due diligence item with the city's planning department. What I can tell you is there are several apartment buildings already in the surrounding neighborhood, which is a good signal for higher-density zoning.
Buy and hold the cash flow now, then explore redevelopment in 5 to 10 years as Aurora continues to densify along the Colfax corridor. Few Denver-area multi-family deals offer this combination of immediate cash flow and long-term land play.
Who should consider buying these Lima Street properties?
Three buyer profiles fit: a house hacker on the $480K duplex, a cash-flow investor on the $1M 5-plex, or a developer buying both for $1.48M.
If you're a first-time investor, the duplex works well as a house hack with FHA or conventional owner-occupied financing. Live in one side, rent the other, and let the tenant cover most of your mortgage.
If you're a cash-flow focused investor, the 5-plex delivers stronger returns on a per-dollar basis. The Section 8 voucher rates in Aurora make the income predictable, and the basement conversion is a near-term forced appreciation play.
If you're a small developer or syndicator, buying both gives you scale, a rezoning conversation with the city, and a clear path to redevelopment once the buy-and-hold income covers carrying costs. The lots are too small for a major developer but right-sized for a local operator. Reach out if you want me to walk you through the financing scenarios.
Video Chapters
Full Video Transcript
Full transcript from this video, organized by chapter. Click any timestamp to jump to that moment in the video.
1408 and 1440 Lima Opportunity
[0:00] if you're looking for an incredible investment opportunity in the Denver metro area you're going to want to listen up I'm standing here in front of a duplex right next to a fiveplex that are being sold either together or separately from each other there's incredible cap rate numbers especially if you go Section 8 there is great house hacking numbers if you want to buy only the duplex and there's a development play opportunity because these units are right next to each other so check out all this information about both of these units and then reach out with any questions that you have so let's take a look at the numbers here and I'm going to throw up some images of the units as I kind of go through this they're ten and occupied so we didn't want to be too much of a disturbance doing your typical listing video going through the property this is all about the numbers right now on the duplex we're going to start there if you want to see the five Plex numbers you can just fast forward um but basically on the duplex what we have here and of course you know if you've got questions just reach out give me a call shoot me a text message uh what I have here is a rough breakdown for the cap rate okay and here are the assumptions at a 480 purchase price this is two two-bedroom one bath units on 1408 Lima street now they did make some configurations to make it work for their lifestyle over the years um and so you would have to do some reconfiguring to get it back to you know two two-bedroom one bath units you could make one of them into a three bed depends on just how you want to shake things out but there's several opportunity plays here okay but assuming 480 purchase price with 25% down I believe I put in so 144 down some loan cost acquisition costs uh total cash investment about 152 on the rehab you know let's say you put in 20 grand most things need 20 grand worth of work uh there could be a little bit more there depending on if you're going to swing the hammer hire it out um and then what I put for the annual rental income again depends on if you want to go section8 or not Section 8 right now in Aurora this is from the city of Aurora the Housing Authority two bedrooms right down here getting $2,200 a month and that's going to be obviously on the high side you're going to have to do some work to get there uh the ones that we have doing well are with you know the lvp flooring white cabinets uh quartz granite countertops um but at $2,200 a month and this is going to be of course with you paying most utilities uh that's what I kind of specked in here you're looking at an annual rental income for both sides of $52,000 $800 so that's $4,400 a month for both sides minus 5% vacancy okay um and then real estate taxes about two grand a year property insurance I put in about $2,800 a year uh it's been real hit or miss the last 12 to 24 months as to whether we're getting hit with you know something like $2 to $300 a month or four to $500 a month depending on the pathway of the storms uh and Hal damage that they've been going through um repairs and maintenance $1,500 a year uh utilities I did put in4 700 making the Assumption if you are going Section 8 so total annual expenses gives you an noi net operating income of 39,000 um minus mortgage payments puts your cash flow at just under 12 Grand a year okay uh so your cash on cash in at 7.7% which is pretty solid you make your own assumptions maybe you think you'll get two grand a unit still do your thing it's still cash flowing decently which puts it at an 8% cap rate um on the purchase price of 480,000 okay so that's for the duplex now what's interesting here is that there's the fiveplex right next door with an alley kind of separating the two now the homeowner has stated he has talked with the city in the past um he's been at this property for about 40 years approximately so most of his adult life and he has said hey you know the city is willing to work with somebody and to kind of rezone these two properties next to each other which currently the duplex I think is just under 8,000 square feet lot size the fiveplex next door here that we're going to talk about in a second is right around 9,000 square feet plus that alley space would make you significantly larger 17 18,000 square feet combined for the Dual Lots plus working with the city to take over that alley Aly is a very short stretch it's not actually necessary which is why the city of Aurora has said in the past that they'd be willing to work with somebody but do your own due diligence how many units you can build I don't know but there are a lot of apartment buildings around the neighborhood so now the five Plex next door has four one-bedroom units okay and they kind of mirror each other um and I've got the floor plan right here for you to take a look at very simple one-bedroom one bath units and then you've got the end unit which is actually a two-bedroom but there's a basement under the last unit so you can actually convert that either into four bedroom fairly easily couple of ESS windows down there and just a general remodel of the basement or you can actually make a sixth unit because it already has its own entrance right so you could have essentially a sixplex with four one-bedroom units and two two-bedroom units okay um so that's the value ad play here on this five Plex and the numbers are pretty stout so I know it's going to be commercial lending and that's going to be a little bit higher but the one-bedrooms section right now city of Aurora are pulling in 18835 a month right and that's going to be on the high end of course paying all your utilities uh with a Section 8 voucher two bedrooms getting 2200 a month so what I did to run a cap rate projection is I converted that last unit into a four bedroom I think that's your path of least resistance and your most inexpensive rehab uh to add value to it I do think you will make more by making it into its own uh unit as well but that involves adding a kitchen down there which adds a whole another level of complexity to it so forget that add a couple of egresses put some different walls down there it's already plummed out for a bathroom in the basement so you could have two bedrooms and a bathroom in the basement um it's about 900 square feet down there again I will have the floor plans in the description below uh and all the property details that you can check out um but at a million dollar purchase price for the fiveplex with 30% % down about 11 Grand in acquisition cost just general loan fees things like that minus 5% vacancy uh putting in a total of 10,565 per month that is with four one bedrooms and one four bedroom okay um taxes on the property 4,000 a year property insurance at $3,600 a year that might be a tick higher um repairs and maintenance about 3,000 a year uh utilities 11,760 so again for Section 8 I just put it in you know the owner paying all utilities I did not put Property Management in there um it just depends on your situation and Property Management fees can vary greatly anywhere from 7 to 10% usually um so put in your number there but without that basically brings you to a net operating income of $98,000 okay the annual cash flow before taxes is just over 40,000 okay making it a 133% cash on cash and a 99.7% % cap rate um that's about as good as you see and being that you have both of these properties next to each other it does make for a good opportunity for future development you know value ad sort of place so uh in this description below I'm going to have all the details of course um if you have any questions you can reach out to me address is again 1408 Lia Street on 14 40 limma Street in Aurora uh just south of kfax a little bit but real close to the Denver border 480 for the duplex so that's 240 per unit right per door uh for the two-bedroom one baths and then a million dollars for the fiveplex uh so that breaks down to a little bit below 200,000 per two per one bedroom uh and then you know somewhere around that 2 uh50 Mark for the two bedroom unit with the option to add more bedrooms into the basement below that two-bedroom unit so if you got any questions feel free to reach out 303 552 4804 again link is in the description uh with all the details if you want to see the latest market update and what the numbers are actually doing um you know since the election and since interest rates dropped and then have gone back up just check out this video it's my latest monthly update and again if you need anything feel free Reach Out
1408 Lima Opportunity - The Duplex
1440 Lima Opportunity - The 5 Plex
Frequently Asked Questions
Where exactly are 1408 and 1440 Lima Street located?
Both properties are in Aurora, Colorado, just south of East Colfax Avenue and very close to the Denver city border. The location gives investors access to Section 8 voucher demand and to the broader Denver metro rental market, with easy commuter access via Colfax.
What are current Section 8 voucher rates in Aurora?
Per the City of Aurora Housing Authority, 1-bedroom units pay up to $1,883 per month and 2-bedroom units pay up to $2,200 per month. These are payment standards on the high end, so the unit must be in solid condition with modern finishes to qualify for top voucher amounts.
Do I need commercial financing for the 5-plex?
Yes. Any property with five or more units falls under commercial lending in Colorado, which typically means 25% to 30% down, shorter amortization, and slightly higher rates than residential. The duplex next door qualifies for standard residential or owner-occupied financing options.
How much rehab do these properties need?
I'd budget around $20,000 per unit for cosmetic updates like LVP flooring, painted cabinets, and updated countertops to hit top-of-market rents. The 5-plex basement conversion adds extra cost depending on whether you make it a 4-bedroom unit or a separate sixth unit with its own kitchen.
Is the alley vacation between the two lots actually possible?
The seller has had conversations with Aurora's planning department, and the city indicated willingness to work with a buyer because that alley stretch isn't a necessary through-route. Any buyer should verify directly with Aurora planning and zoning before relying on this as part of the underwriting.
Can the duplex work as a house hack?
Yes. If you live in one unit, you can use FHA or conventional owner-occupied financing with as little as 3.5% to 5% down. With 2-bedroom units potentially renting at $2,000 to $2,200 per month, the rental side could cover most of your mortgage payment depending on rate and down payment.
What's the biggest risk with this investment?
Insurance costs have swung significantly in Colorado over the past 24 months due to hail damage along Front Range storm paths. Premiums can run $200 to $500 per month depending on the carrier and claims history. Get insurance quotes during due diligence before locking in your underwriting.
Thinking about buying or selling in Denver?
Call or text (303) 552-4804 for a no-pressure conversation about your situation.
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