All Forum Posts by: Bill S.

@Michael Laurencelle The most real estate investor friendly attorneys that I am aware of are at Frascona Joiner, Goodman and Greenstein, P.C up in boulder. Not sure if they do the LLC setup for flipping though. Call and ask or search their website.

@Ted Usatynski your best bet is to find an independent agent (via google). This means not State Farm or other brand with agents who can only sell you their brand of product (captive agents is what they are called). I have found independent agents work well for the first few properties, especially if they are 4 units or smaller. Once you get into a multiunit property (5+) then you should ask your real estate agent or other investors for a referral. You can then compare quotes from the independent agent with the others. The most important thing is to make sure you are comparing apples to apples. For my small properties Safeco (I think they are now owned by Liberty Mutual) is the insurer with the best rates so find an agent that can quote you them.

@Jared Rollins so if I understand the situation correctly. You own the lot worth $325K outright and have a construction lender for up to 70% of the build costs but need an additional $250k for the remainder of the construction costs? I assume based on building and land values in the area that the $325k is part of the 30% and the $250K would be the remainder. Would the construction lender allow the $250K to be in second lien position or are you looking for and unsecured $250k loan?

Have you done ground up construction before in the area? Is your builder local to Roaring Fork Valley? 

What is the status of the soft costs (ie tap fees and development fees) of your build?

@Forrest Bassett so as an FYI, the law (bill) was written by a tenant advocate attorney and is not really very clear as you have pointed out. The idea is that tenants can pay Zillow or any other online site taking applications and then not have to pay an application fee for each property they want to apply to. The attorney's I use have stated that the online sites do not technically supply all the information required in the bill and stated that if the landlord wants they can probably not accept any of the current online sites like Zillow. Your milage may vary and obviously this information is current for when they stated it and online screening is a evolving process.

Also be aware that you can make them complete your application and use that application and your in-house screening process, you just can't charge them to apply if they supply a PTSR.

@Austin Merritt I lean toward the hold side. As others have mentioned. Look at the whole picture. The principal paydown, the tax advantages and the depreciation. As others mentioned, there is the cost to sell which can really eat into your equity as all those costs come from your equity but are usually based on the whole value of the property.  There is also appreciation which although it can't be counted on also acts on the whole property value not just your equity. 

That said, out of state landlording is not something I recommend. In reality, if you are hiring a pm you won't get a true landlord experience. In reality, 90% of the time you can probably do as good a job if you go the DIY route on the PM side as long as you invest time to learn how to do it right. If you don't want to invest the time to learn and are trying to offload it to a PM with the idea that you will learn from them, I'm not sure you will be too happy with the outcome unless you get lucky. 

In summary IMO, financially you should keep it. Practically you should sell it. You will invest far more time and effort than you will be rewarded for from just this property. If you plan to use this as a stepping stone, then your time and effort is part of your education and is well worth it.

The good news is if you do keep it you can do a test run for 3 years before you would lose your capital gains exemption. 

@Eric DeNardo tough to make it work if your goal is to get all your money back (ie down payment and rehab). It's more workable when you aren't trying to get all you money back and are not needing any cashflow from it. Finding a deal that you can get some of your money back can probably be done as people are still flipping houses so there is definitely spread between the fixer purchase prices and ARV. In my experience the real challenging part is to find a property that will cashflow after the refi. The folks I have seen making this work are doing a STR with the property after the reno. I think the term discussed on the podcast is called BRRR-STR

@Kelly Schoeppler my approach is to add the subletting tenant as an "additional occupant" and continue to collect rent from your current tenant. Leave it up to your current tenant to collect the rent from the sublet and deal with damages from the sublet etc. Be sure to screen the additional occupant tenant as you would a new tenant that you are selecting for the property.

By doing an additional occupant agreement you then could collect from both if there was a need to do so. You can source a form for adding an occupant by using Google and the term "additional occupant addendum". You should obviously have your attorney (Steeped in Colorado landlord/tenant law) review the document or just get a form directly from your attorney. If you want to wing it, no need to ask the attorney. I would say the likelihood of it becoming an issue is low. I would say the cost if it does become an issue could be high but that is a call you have to make. 

@Brendan H. I realize this is a bit old but thought I would chime in since you mentioned me. So the context of my original reply was related to a transaction to purchase a property. In that case, my education told me email was adequate. In the case of serving a tenant, I don't know what is acceptable aside from paper, for all I know a text might work which is not legal for a real estate purchase contract in Colorado. My experience with the landlord tenant court (Denver County) is that it operates more like Judge Judy than Perry Mason. I would say you are probably on reasonably solid ground using email since the tenant did respond. That said, it is supposed to be sent in the mail. I was told it does not need to be received by the deadline (30 days in your case) it just has to be sent so again, it seems you would be good there. BTW if you modify your lease and state that you will return the deposit/deposit accounting within 60 days you will have another 30 days to get everything wrapped up. The laws states that you must send back the deposit/deposit accounting within 30 days unless your lease states you have 60 days.

A small point on your email. You said "notification of deposit withholding". You should provide an itemized list of damages and charges that add up to the amount you withheld. It won't fly to just say, "you left the place dirty, I am keeping your deposit." The technical term is security deposit accounting which should be done even when you return the whole amount. 

@Reginald Truss not really comfortable posting that kind of data on a public forum. If you view my profile you can see information that would allow you to get ahold of me and I will be glad to address questions.

I have a condo in Cherry Creek (335 Detriot St unit #305). We (my wife and I) own this free and clear. We inherited it from my Father and it has a high quality tenant in place who has never been late on rent. The current lease expires in May of 2021. We would like to sell the property but it's a family thing and the tenant wants to stay. We would like to tap up to $150,000 of the equity (for what it's worth, we have an appraisal from the estate for $600,000 and assessed value is above that number) to use for the fix up of a duplex flip we have purchased. The loan, secured by a first deed of trust for up to 1 year, to us could be funded with an IRA or cash on hand. Let me know what your terms would be.

Due to the time frame of the lease and all the trapped equity, a conventional loan does not make sense to me so that's why I posted here.

Thank you. Bill