All Forum Posts by: Justin Hoggatt

I have many homes in Peublo and started about 4-5 years ago down there.  I've seen significant growth and change in that amount of time.  It has been a great market for me and I've given credit to Pueblo for single handedly getting me out of my 8-5 job.  I know the picture is different now versus back then, but I have seen and heard of A LOT of people moving in from out of state, renting my homes unseen, demand is and has been high, rents are increasing still (unlike Denver), homes have appreciated significantly.  

What the metrics have a hard time showing you when looking at market vs market jobs and median income of CO Springs and Pueblo is the amount of people willing to commute from Pueblo to Co Springs.  It's only about 30 minutes from Pueblo to Co Springs and when you can buy a house for much cheaper, even one that has more land as well, it's enticing.  Same with renters, they don't want to rent an apartment in Co Springs for $1500 when they can rent a house for $1,000-1,200.  

I think Pueblo has done a good job attracting jobs and amenities.  It was a sad to hear the minor league ended up passing on them a couple years ago - could have been even better.  But I see that as progression and do believe Pueblo will continue trending well - even with a recession.

From what I can tell, what he was thinking was he'd have to give his 30 day notice to his current landlord and he didn't want to "waste" any money.  Then he probably realized he needed the overlap so that he could move-out of one place and move-in to the other while still maintaining occupancy of both.  Once he realized his mistake, he came back to you.  In my process, I approve someone and then get a holding deposit.  That locks them in for the unit until we sign the lease and then the holding deposit takes effect as a security deposit once they move in.

At this point, you have the choice of what you'd like to do.  Which do you like better?  Go with that person.  There is no law that I know of that you'd have to worry about - he's the one that changed his move-in date and you don't have to accept his conditions.  

I would suggest holding onto it.  Do you have enough for a downpayment on your next house without refinancing?  That's what I would recommend if you can.  Refinancing is expensive and even though you could roll that into your property, it reduces your equity.

What rent would allow for a $400/mo cash flow? That seems really good considering your PITI plus association fees and any maintenance that might be needed. Of course, is that $400 current or after a refinance. Because after refinance your mortgage payments go up and that could easily get eaten up.

Interesting!  Thanks for inviting me to the question, @Ryan Sports.  I honestly never heard of this home and had to google it.  I don't know that the home is worth anything more just because it's a Lustron home, if that' what you're asking.  But I could be way off?!

With the underground tank, I kind of wonder if it's worth messing with it.  I suppose it all depends on how good of a deal it really is.  I always say, there is a price to pay for everything and anything could be worth it.  So, if he's really motivated, then see how low he'll go.  You can get it tied up and then decide if it's something you want to continue with during due diligence - like figuring out how much it would take to remove the tank and whether your lender will have any issue with it having been there.   You may end up dealing with potential phase 1 and/or phase 2 issues.

@Kacper Scheibe, No Problem! Good luck!  I'm sure you'll do well!  

Another option for that "little" of a multifamily deal, you could get private money.  Or, would the seller do a carry? 

Otherwise, obviously yes, you'd need a commercial loan.  Do you have previous experience in single family?  Before approaching the bank, know what it is you are offering them to lend on.  Come up with your numbers and also have the P&L's from the property, a 1-page bio, have the offering memo for them (if it was listed by a broker), Rent Roll, and a personal financial statement.  Often the bank can have a sample or a specific form they want you to put it on, but try to get a PFS that is not branded so that you can quickly and easily update that on each deal you have moving forward so it's easier on the process.

Also, with that low of a deal, you will probably have to find a local bank and often times a small community bank will offer the best terms.

It sounds like you didn't get any agreement signed.  Do you have an official notice that you sent them?  Are they still on a month-to-month?  I'd give them the papers to move, which is the 30-day notice to get out.  That's the nicer way to do things, but if you want, give them the the demand to pay - although for an eviction over $150 the judge might only laugh at that.  If your market rents are even higher than what you had raised them to, then they aren't worth it and they are now a headache and I'd make the move to move on from them.

Richard,

I'm not a lender but from my understanding they will look at all income and see whether it's comparable income due to the same profession.  What field are you in?  I think that might matter a little bit too, but an S-Corp will give you distributions (tax free) and the you'll pay yourself a w-2.  As long as you can show the proper tax returns and bank statements showing the 1099 is accurate and consistent, I don't think you'll have a problem since it's been for 4 years.

Not sure where you live, but in Denver there are a couple options that we use.  One of them is a J&K Cabinetry.  Another is Stone International.  There are so many out there - you could probably start googling.  I've never used Cabinets to Go - I guess they could work out - but usually pretty expensive compared to other good options.  

On the surface it sounds like a decent opportunity.  Do you have a broker helping you out on getting this?  If so, they should probably have some ideas for you.  Being a broker myself and working with buyers, one thing I will ALWAYS do, is make sure I call the listing agent.  I can't tell you how many stories I hear about brokers NOT making phone calls to the listing agent and understanding the full picture and most importantly, making the connection and gaining rapport.  Stories that cost the buyers way more money than it should - i.e. There must be multiple offers so they offer above asking, but if they called they would have found out their offer was the only one.

Assuming, however, that you're correct and there are multiple offers coming in.  Ask question about the sellers motives.  Find out what they want, maybe something else besides a higher price.  Tell them about how it will be easy to work with you, you'll make it to the closing table, you'll not ask for a bunch of concessions - maybe taking the house AS-IS.  You can take out contingencies.  What lending are you getting and how much are you putting towards the property.  You can put an escalating clause so if you know you'll pay higher than an initial offer and you want to beat out all the rest, escalate it based on other offers - but of course knowing what your competition is first certainly helps.  All this does matter and your broker can help you on all that.

A duplex property you'll also most likely have to get it personally and then if you want you can quit claim it to your LLC after closing.