All Forum Posts by: Bill S.

@Michael C berry jr so another component to be concerned about is the ownership of the lots in Steamboat. The 1031 process means you need to identify the property withing 45 days of closing and close on the purchase within 180 days of identifying the property. The transaction needs to be "arms length" as well. That means your partner would likely need to sell and deed the lots to you. You could then do a business deal with them to develop the lots. If you plan to move forward with this, definitely get a qualified 1031 specialist and an tax attorney involved so that you check all the boxes and structure the deal properly.

@Dante Kirklin You can navigate to Get Started tab above. The drop down will have "upcoming events" and people post their Denver events among all the others. You can also search on meetup.com as some folks post their events there as well. Just a word of caution that all events are not created equal and you may find that some of them are just thinly veiled sales pitches. Visit a number of them before you put out any money and see what fits you.

@Marissa Negley What is holding it going to do for you? What does your financing look like for a long term hold? If you don't know where to find midterm tenants how do you know that the rent amount you are expecting is realistic? I have run the numbers several times and I can't make a mid-term rental work any better here than a long term rental when you consider the cost of furnishing and the added management. When the City outlawed most short term rentals many owners turned to midterm and it has driven down the price a good bit. 

My advise is to bit the bullet and re-price your flip. Prices aren't likely to go up (S&P Case-Shiller index shows flat to trending down) in the next 2-3 years so hoping that appreciation will bail you out is probably not a good strategy. Even at that point you will have a "used house" meaning that you will have to repaint and all your new appliances and flooring will be slightly worn so you will be selling a "used" home like other owner occupants vs fully renovated and "new to the user" home that you are currently selling.

@Shawne Beeson I 2nd the idea of an agent. I would add a word of caution as well. Appraisals for cash out refis tend to be on the low side. You definitely want to have your ducks in a row. Provide the appraiser with 3 very solid comparables to support your number. Be careful with time too. If the agent gives you comps now they maybe too old by the time you get to the refi stage of your BRRR. You should also try and "look ahead" and see what is currently on the market and how long they have been on the market. I have seen some stuff here in Denver very over priced and it is sitting. Only the best properties that are priced right are moving and prices are trending lower. Not sure of what it looks like in Pueblo but be sure to bend the agents ear on this as well as look at any and all data that you can get your hands on.

@Kenny Smith wow underground parking?!! That whole area is in a flood zone. Years ago when the arena was built I worked at a Civil Engineering Company. One of the flood engineers there reviewed the flood study done for the construction of the arena for a client and had serious concerns with the validity of the study. The arena was constructed pretty much all above ground due to flooding and ground water issues. I know there has been lots of work done on the Platte River upstream (mostly raising and widening bridges) so perhaps those issues have been addressed but an underground parking garage is going to be a bathtub in an ocean. Basically it must be sealed to keep any ground water out and any water that does get in (either through leakage or flooding above) must be pumped out. It can be done but it's not cheap. I would not be surprised to see the plan revised when they get to design, construction cost and budget phase. 

All that said, them planning the work does say they believe in the future which is good news for us all.

@Ian Schwartz welcome and great decision to "take the plunge". Colorado Springs won't get you much cashflow for LTRs unless you have a big down payment for single family homes. You would need a short term rental plan or be willing to wait on appreciation. The area is growing in terms of adding new jobs but the population growth has stagnated as of late. In the end, if the jobs aren't replacing other lost jobs the population growth should turn around. Having some local boots on the ground is definitely helpful. I wish you well in your investing journey.

@Jimmy Spaly I saw your post. It is going to be pretty tough to sell a property to a first time home buyer and not pay a buy-side commission. Most first time buyers have agents to hold their hand and have limited funds to buy the home and pay the commission. In addition, most have signed an agreement with their agent requiring them to pay the agent if they buy a home. Sellers are usually the ones with money so that's where everyone looks for the buyer's agent compensation. Granted the new rules don't allow the seller's agent to advertise a buyer's agent compensation but generally speaking, the seller pays the buyer's agent through the negotiations. 

@Katie Accashian so you want to connect with @James Carlson as he is the local go to expert on short term rentals. You definitely want to get all that sorted out in your due diligence period of your purchase contract. The whole duplex with two STRs on one parcel is a bit concerning. There may be a work around by splitting the building and lot into two parcels with separate ownership if that becomes an issue. Still they may have some heart burn with it still being one zone lot. 

As for an egress window. This is a must have if you have someone sleeping down there. Your price is toward the low side of what I have seen for them especially if you don't have a contractor already lined up with a written bid. Also that price probably doesn't include repairing the drywall and repainting on the inside. Another thing to watch for is where does the dirt go from the hole as well as the concrete coupon that they cut out of the hole. The cheapest ones leave you with a huge pile of dirt and monstrous piece concrete to get rid of. Contractors don't always disclose that when quoting prices verbally. Be sure to read carefully the scope of work. Some require you to get your own structural engineer to prepare the letter or to pay for it separately as well. Some contractors also would have you pull a homeowners permit for the work as well. Be careful with that approach and make sure you can do that. Denver requires that you live in the unit to pull a homeowners permit so the duplex situation may throw a wrench in that as well. 

As for the basement not having a kitchen. If the property is zoned correctly you might be able to add a kitchen which as others pointed out would make the whole STR thing fly better as well as using it as a long term rental. Not sure how you would rent it out long term without a kitchen unless you are basically do a rent by the room approach. If the zoning isn't right to add more units, you could get a permit to finish the area having an "almost kitchen" (everything but a stove - 220 outlet or gas connection). There are some options for cooking that run on conventional 110 power such as a toaster oven and convection hotplates. Not ideal, but probably a viable workaround for an STR.

@A.J. Murray can you be a bit more specific? What product are you looking to finance? How many do you need to finance? 

Also what advantages do you think a local bank offers vs a mortgage broker with multiple products such as DSCR loans for 1-4 unit properties?

@Lydia Tilahun welcome. It is not clear to me from what I read as to whether or not you currently own or rent where you are living. If you don't own then without a doubt, your first step is a local house hack. Right now the best option is a low down owner occupied loan on a large (many bedroom home) where your rent out the rooms. If you can't stomach that, then find a house you can give yourself you owns space and rent out the rest of the units by the room. If you already own your home then consider going the house hack route and renting out your current place with the highest income potential available. These are hands down the highest cashflow strategies in our or really any market. I would say that real cashflow in out of state investing is usually significantly lower than most folks anticipate going in.