All Forum Posts by: Bill S.

@Robert Chaiton I agree. You are not getting those numbers. Rented a 2 bed for section 8 in Aurora as well and they maxed out at $1,850 minus utilities. Denver is not that much different from Aurora. I have a four bed in Denver and I think their max is something like $2,750. 

Never heard of Sect 8 renting by the room.

@Danielle Puschak so Denver zoning is a bit complex. You have to be a bit careful because there is what is known as a "zone lot". Generally the zone lot and the parcel/property lines are the same but there are a lot of cases where that is not true. For example it is possible to purchase a side by side duplex and then create two legal descriptions and sell each unit/parcel separately. On the face of it, (assuming the area is zoned for two units) you might buy one of the units and see the TU (two unit zoning) and think I'll just add a 2nd unit to my half and I am off to the races. Zoning will not approve your plans because the "zone lot" is still the original size of both "new" parcels and as such already has two units on it. 

So generally the process for creating a 2nd unit is to approach zoning first. A phone call is ok but people make mistakes and there is often a misunderstanding of terminology. Start at this page and request the appropriate letter. If you are serious, you need the compliance letter which of course costs money. Assuming your plan fits in the current zoning you then have to have plans drawn up by an architect so you can get a building permit. Note they will check back with zoning prior to approving your plans. After the work is done and approved by the City you will get a certificate of occupancy and you are ready to go find a tenant. At this time there are no City requirements for annual rental unit inspections, or rental unit licenses, etc like some areas have.

Generally speaking, adding a 2nd unit to an existing property is very challenging. The fact is that much of the zoning code was created to discourage this type of activity. If you can pass the zoning, the modifications to bring an existing building up to code can be extensive and expensive. If you are using part of an existing structure, they often require the whole building to meet the current building code. The current building code has many green initiatives which require things like energy efficient windows, and insulation in the walls (not common practice 50 years ago when much of was built.

Outside of the City and County of Denver it varies significantly and most jurisdictions aren't set up to provide concrete guidance from the start like Denver is. 

On a final note, if you find a property that doesn't fit for some reason, it's often said by sellers and brokers, "just go get a variance". In the City and County of Denver, it's not likely to happen and anyone that tells you otherwise is trying to sell you something. I know of people spending 10s of thousands of dollars attempting to get a variance only to be turned away. Bottom line is if it doesn't work move on and find one that does. There is a lot of property out there and it is far less brain damage and has significantly better outcome to move on and find something that does work.

@Fadi A. I second the, check regarding zoning around campus. Not all units adjacent to the campus can be rented by the room. Don't think you can slip it by. The neighbors will know, will turn you in and the city does enforce it rigorously. It's a thumbs down deal for me. Especially with hard money. The money costs will eat up your equity in a hurry. You need more margin to work with.

@Caleb Johnson so it would be my advise not to personally touch the tenant's belongings. If labor is needed to move the belongings, hire a moving company to do it. This is defense against the tenant claiming their prize whatever is missing after the move. Not so likely if the tenant is in jail but a good idea none the less. I had a tenant that ended up in jail due to DUI and since it was the last in a long line of many, he had something like 30 days minimum in jail. I posted notice for late rent and got a call from his father. I said, we can do this easy or hard. Easy is, you move out and send me documentation that he is surrendering the unit and we'll call it good. Hard is, I go through with an eviction, get possession, throw his stuff to the curb and file a court case and get judgement for money owed. They elected to go the "easy" route.

@Nathan Hagge welcome. Nice to plan and do some bluesky thinking. My one question is, what will you and/or your partner do for a job there? 

Your best bet for an agent is to use the network tab and look for agents in the area. You can then read and learn about them and see which ones would be a good fit.

@Miles Fletcher you increase your chance of success at least 10x by pre-selecting the doors you knock. Ie properties in foreclosure, or properties with obvious deferred maintenance. There are a number of criteria you can use to be more focused than simply knocking every door on a block which will in turn increase your likelihood of success. Be a little strategic with your approach. Brute force and perseverance will of course win the day eventually but add a little brains to your brawn and success will find you sooner.

@Kiley Marvin awsome job. Those are great numbers and you have great vision. Too bad there are no deals in the Denver metro area (NOT). Nice work making your own deal.

@Crystal Wilson door knocking foreclosures would be my recommendation unless you are completely averse to the whole door knocking route. Based on what I've been told, females have a huge advantage in that world. It's low cost and straight forward. After that, it really depends on your funds availability. Getting licensed is not free and takes time. I have heard of someone powering through the online course in two weeks but I would see that as complete brain damage. 

If you want to acquire more real estate, find tired landlords and get them to do an owner carry while you take over the property and manage it for better returns for you and less headache for them.

No matter what route you go, you will need lead generation. You have to figure out what you can afford and balance that with the time you have. Sounds like you have time so driving for destressed property would be a way to generate a list to cold call or door knock. Do you have some savings? 

At any rate, if you find a real deal, you can post it here in the market place and get some traction and perhaps find a partner or someone to wholesale it to. 

The key is massive action.

@Chris Gomes so what exactly are you going to be doing with your time that you were using to do the repairs? How is doing the repairs "holding you back" exactly? No I understand the headache and inconvenience of handling those items but realistically is it so time consuming with one unit that you can't fit it in between other activities? 

I completely agree with the business hours approach to repairs. At a minimum, only respond during business hours. You can arrange to take care of the work yourself during non-business hours but remember you are setting a precedent. If you do hire a handyman, what hours do they keep (likely 8-5 and weekdays only)? Who meets them between 8 and 5 during the week? If the tenants both work normal hours then what? Are you going to take time off to meet the handyman or does your lease require them to do that? Some folks give their handyman a key and they let themselves in. Would you let a handyman in your own home when you weren't there? If not, don't let them in your tenant's home when no one is there. Many many ways this can go bad.

My advise, do your own repairs as long as you live next door (it's quicker, cheaper, and likely easier). When you move again, then consider the hiring it out route. You might even consider hiring a property manager even for the simple reason that they have the contact for these kind of issues. In reality, your are starting the process of building a property management company once you starting hiring people to do work on the rental. Is that the best use of your time? If not, perhaps hiring the PM right out of the gate might be the way to go. Starting out, unless you have a high demand w2 job. DIY. You can even "pay yourself" so that you are used to seeing the funds leaving the rental business. Your next purchase you will have those costs known and can bake them into the purchase if you desire. That (having the funds earmarked to hire it out) is more the key to growing your business then actually going out and hiring someone to do it. If you didn't buy it with the budget to hire someone else to do it but you hire it out, you will lose money. If you budgeted to hire it out, then pay yourself and perhaps some of that resentment for time away from the actual business of real estate will be more palatable. 

@Cara Powers so a few thoughts. 1) with an anemic population growth, those areas will never turn. You have to generate jobs to get population growth beyond just having more a few more babies than people who die. 

2) I tried to cover some of the business issues in my first post. You will need to read between the lines. People who own/run small and medium size businesses should understand. The rest just wonder what's going on behind the curtain if they even consider that there might be a curtain. Unless you have been close to the inner workings of local and state government you won't have any idea of what's possible that impacts the business environment. It is lost on the average W2 employee. In addition, the sad thing is that many bureaucrats have not idea the impact of their actions on business. Unless there are some near the top of the political pile that do understand business and chart a different course (business friendly) for an extended period of time, everything goes along and people wonder why nothing changes. I don't want to make this a political post by calling out specific policies or political actions that have been harmful to economic expansion in the area.

3) I agree with the infrastructure issue in the area. One geographic challenge is the Rio Grande River right through the middle of the area. Too few bridges create traffic problems (even with it's relatively small population) and the river requires large expensive bridges. In addition, the patchwork of Indian and Government lands limits growth and contributes to urban sprawl without really have the urban component. Longer commutes, longer road, longer utility lines (fewer customers per mile of pipe to maintain) all lead to higher costs and lower return on invested dollar (whether public or private).

4) High Crime - lots of systemic issues there which are tough to battle and weigh on the system as a whole. 

I apologize for the negative tone of this thread. It's kind of gone that way. So in closing, remember there are people there investing in real estate and making money. This is not a don't invest there post. My primary point is don't expect a rising tide to lift your ship in Albuquerque. Again, there is and will be money made in real estate there, just temper your expectations. Finally, don't use this as an excuse to write it off as a place to invest.