All Forum Posts by: Bill S.

@Brooks McCarvel - MBAs are a dime a dozen and IMO are not really that useful except to get promotions. It seems to me that the finance end of the business is what is missing for most business owners/starters . That said, you have to find what works for you. If the idea of doing accounting or finance is not appealing, don't do it. No reason to spend countless hours beating your head against a wall. 

Also it sounds like you are in the air force. If so, use your VA loan to buy a house hack there in Cheyenne. You don't need a down payment for the VA loan. This is the best way to start hands down.

@Mike Dumont so apart from some correspondence detailing how the funds would be handled, I would do the following.

Colorado law gives the landlord 30 days to return a security deposit. I would advertise and re-rent the unit and retain that part of the security deposit not used to offset the lost rent. You didn't mention if they had paid any part of the rent due. I assume not. So for example your rent is $1000 per month and they told you on Feb 21 they wouldn't be moving in that day. You then get the property rented Mar 1. They would owe you for 8 days rent in Feb (8/28) x $1,000 = $285.71 (assuming the funds collected was $500) so you would return the balance to them $214.29. The reality in this market is that you would likely not have any funds left to return to them since it is unlikely to get re-rented so soon. Just to be clear, I would only charge them for lost rent, from the date they were to move in until the date someone else started paying rent.

Now, would that hold up in court? I don't know. Maybe and maybe not. Especially since you don't have a signed document.

We don't do "holding fees" as tenants don't understand that and we had one threaten to sue. Our attorney told me just return the money as the brain damage of going to court and potentially losing (court is really just rolling the dice - small claims court is not about justice and the law but what the "judge" thinks is "fair") is not worth the possible gain.

We always sign a lease and any funds paid are first applied to rent and the SD is collected last. If the tenant backs out, the rent money is owed for lost rent while re-leasing the property. This is all spelled out in writing.

Lastly, the least brain damage approach is to return the funds and focus on re-renting and moving on. Caulk the lost rent up to your landlord education. Bottom line is that the place goes to the first qualified tenant with the money. No pay, no stay.

@Lau Cor you are probably not going to find many on market deals in Colorado Springs that you can get for 80K down (<$400,000 purchase price) that will break even with a DSCR loan. You might make it work if you can find a way to increase cash flow aside from the basic long term rental strategy.

Also as an FYI - Colorado Springs is it's own MSA and is not considered part of the "Denver Area". It is part of the Colorado front range. Boulder is in the Denver MSA but Colorado Springs, Pueblo and Fort Collins are considered separate from Denver

Hope this is helpful.

@Kenny Smith the data I saw yesterday from Metro Denver Economic Development Corporation says that the front range is losing a few folks and the Western Slope is gaining a few more that your above number so while Colorado is gaining, the front range is losing and the Western Slope is gaining more. This seems to follow the general overall trend of lower cost areas winning at the expense of those with a high costs of living. On the front range, El Paso County/Colorado Springs is doing the better than Metro Denver and even Weld County/Ft Collins.

@Greg Weik as a local Denver investor I would strongly disagree with a couple of your opinions offered to @Melissa D..

Just because someone has experience doesn't mean that a local meetup would not be helpful. I have been investing for 20 plus years and have found a number of good connections at local meetups and here on the BP forums. The fact is, newbies or scammers are not the only ones that go to meetups and networking groups. My advise is to go and see for yourself. BP has local meetups posting as well as other networking sites. Check a few out and see what fits your style. Be aware that some meetups are really just marketing tools for those hosting them. Nothing inherently wrong with that but be sure that they add value to the attendees. My thinking is that there is always room to grow and learn and expand my network. As for where to start. I would start with those that have been around a long time and are larger in size. People won't attend if they don't find value.

I have purchased out of state property and my lesson is the same as it is locally. It always takes longer, costs more and has more challenges than I originally thought. I totally agree with the idea that local markets offer better value in the long run that cheaper out-of-state markets.

Finally, Just because an experienced property manager would not do a house hack or purchase a small multifamily property does not mean it would not be a good fit for you and your situation. I think the testimony of many on this web site would indicate there is great financial benefit from taking either of those approaches. Find what fits for you. I really don't think that "one size fits all" but the opposite is not true either, because one size does fit some. You have to find your size and wear it.

@Holly Radice so I own in Barnum but do not do any STR as I don't live in the area. You should look at AirDNA for information about short term rental in the area. Personally I consider it to be more of a entry level neighborhood for first time home buyers and a blue collar neighborhood for long term renters. My wife (she picks all our STR stays) would not rent a STR in that type of area in any City but we are not everyone so take that with a grain of salt. As @James Carlsonsaid, there are a lot of legacy unpermitted "improvements" to properties in the area. I haven't seen the City crack down on unpermitted work with regards to a LTR rental license but that doesn't mean it won't be an issue some day.

@Justin Sherman your best bet for cash flow is to go with a STR in the upper part of your house hack. If you live in the basement then you can legally STR the top in most areas. That is the only way I have seen most deals work these days. If you buy a very large (many bedroom house) the rent by the room also will cashflow. Now days you don't buy a deal you make the deal either with how you operate the property, how you finance the property, or how you purchase the property. Works best when you can pull multiple levers to make the deal.

@Kevin Bartel Yes Aspen is a VHCOL area. Are you living in Aspen now or are you commuting from down valley? I am sure the further West you go the more likely that you can make a house hack work. It really depends on where you want to take your real estate investing. Syndications are a very hands off (after all the work of vetting the GP and deal are done) of investing. Very repeatable and much less time intensive than actually owning the real estate in most cases. If you want to actually own the real estate (some of us like to be able to see and touch what we own), then start with a house hack. The area you are in is very good for appreciation. My extended family has done very well (10s of millions of dollars in equity growth over the years) with real estate in that area. 

@Dan DeGroff you are over valuing the access to foreclosure listings. They are few and far between. All those with equity are scooped up by investors or sold by those being foreclosed on before it is finalized. My family just sold a property in Aspen. The price of real estate there is off the charts and completely insane.

@Steven Mendiola

So Colorado just passed a law this year taking the local limits cities were placing on people related to the number of unrelated people living together so no need to worry about that issue.

Make sure your lender is on board with the purchase price and DTI ratio you are proposing. The best house hack deals come from those who add rooms to the property but it sound like that maybe a bit out of your wheelhouse.

Make sure living in the trailer is something allowed by the powers that be. Ie HOA, city or county. Do NOT try and sidestep that by thinking no one will care. At some point, someone will care and it will hurt you.