All Forum Posts by: James Carlson

Awesome. I don't mean to step on any toes if you already have an agent, but if you don't and want to chat to see if I'd be a good fit to help, give me a shout. Cheers.

Hi @Michael Payne

If you're asking about date and time, it should be listed at the top of the page. It's from 6:30-8:30p on Aug. 13 at Colorado Free University. Is there something else I can help with?

Before talking about cap rates and cash flow, learn the basics of the home buying process. 

• An overview of the current Denver real estate market
• Pitfalls to beware of
• How to find an agent and a lender
• When you can get earnest money back ... and when you can't
• What documents you will sign with your agent and how to read the contract to buy real estate

The class is FREE but you must register with Colorado Free University by calling 303-399-0093 x0.

Hi @Lyberti Reid,

First off, congrats on owning a place in Denver. I know a lot of people thought it was crazy to buy in 2015. Now look who's crazy. You got a good chunk of change in equity I bet. (Now, we see the negative side of this as well, as we work with a lot of first-time homebuyers who are wondering if they'll have to choose between either renting forever because home prices are too high or moving out of the city they love.)

I digress ... there aren't a lot of "secrets" to affording in this city. Have you talked with a lender yet? That's the best first step. Don't speculate on what you can afford. Get the hard numbers. There are some good FHA programs with a low-downpayment for multi-units if you live in one of the units.

Now if you don't qualify for a multi-unit here in Denver, you've got some options:

-- Look in Colorado Springs where the prices are more reasonable (somewhat). And you can do short-term rentals down there in any property. We have a lot of clients doing well with that.

-- Heck, just buy a straight-up SFH in COS. Rent it long-term or short-term. They're dwindling, but if you're patient, you can still find some small little spaces in the low-to-mid $200s.

-- Partner with someone here in Denver to buy a multi-unit. Pool resources and see what can happen.

-- If all else fails, what about buying another small condo? My wife and I own two small condos. I think as young people continue to want to live here, they'll need a place to rent, and they'll want the smallest (read: cheapest) place they can find. I like small studios for that reason.

-- Have you considered moving again to take advantage of the low down payment options in a primary residence property?

I wish you luck!

@Jeremy M.

First off, congrats on taking a big step. Have you spoken with a lender yet? It sounds like you have, but I can't tell. That's the first step, I think. Don't speculate on what you'd qualify for. Get the numbers. 

I see the plusses and minuses of buying in either market. 

In Denver ... you have to live somewhere so why not make that your first "investment"? Plus, you can take advantage of much lower down payments for your primary residence. If you're open to it, you can house-hack as well. Find a decent home and rent out other rooms, or find a home with a basement area that you can rent on Airbnb. (Funny people are mentioning Cole. I just had a buyer close on a small little rehabbed SFH in Cole, a mile east of RiNo, with a separate entrance to the basement. He's going to rent the bottom on Airbnb and cover a good portion of his mortgage.) There's also some great little affordable neighborhoods where you can get a decent SFH for under $400k. Athmar Park and Barnum on the west side of I-25. East Colfax on the east side of Denver. There are others, but those are also relatively close to downtown and are turning around.

If you're hell-bent on going to Colorado Springs, that's a great city that's getting better every day. (You should check out the little restaurant development on South Tejon.) I like the options of COS. You can long-term rent or short-term rent. 

But I still wonder whether -- with a $400k budget -- if it doesn't make sense to buy something where you live. 

Anyway, talk to others on here and then take the next step. Good luck!

Just a reminder that we will be discussing the Airbnb laws and how to use them to offset your mortgage or buy an outright Airbnb investment this coming Wednesday, 8/7. 

We'll meet at Carbon Cafe & Bar, 1553 Platte at 6 p.m. I'll give a brief presentation on short-term rental laws in Denver and Colorado Springs as well as some of our clients' examples of house-hacking with Airbnb or outright investment properties with Airbnb. 

(We'll also dish on what the hell is going on with the Denver DA's felony charges against two different parties over their Airbnb properties.)

The class is FREE but please register at our website so we can give the venue an accurate count. See you there!

@Josh Magnus

We get this question all the time from Denver buyers we work with. I'm bullish about Denver as a whole, so take what I say with a grain of salt. That said ....

As someone said above, the data doesn't point to some huge crash. Yes, there has been a slowing in price increases. That seems to come as the inventory of homes has increased. (Roughly 9,000 homes on market right now. That's well up from the historic low of 4,000 homes we had for a few years, but is well below the 24,000 homes on market before the real estate crash.)

I would echo an above sentiment as well. Trying to time the market is tough. We had people telling us we were crazy when we bought a small condo in 2015. (Prices are sky high!) We've since gained $100k equity.

A lot of this depends on goals and timeline. For instance, if there's a chance you might have to sell in two years, then you never know. But if you know you can hold on to it for five to seven years (either living in it for that time or moving out and then renting it), then you're likely fine. For example, if you bought at the height of the bubble in Denver in 2007,the average residential price was $288k. Average prices dropped in the crash and didn't get back up until 2013. Yes, that's seven years before you got your equity back, but it's also only seven years after the worst financial crisis in more than a century. 

As my wife -- also a Denver real estate agent -- likes to say, don't wait to buy real estate; buy real estate and wait.

Thanks for the shout-out @Tyler Work. Hope all's going well for you. Your strategy works wonders ... if you have a cooperative partner. At the risk of drawing ire, what we see when working with buyers is that younger men are pretty excited about the idea of buying, living-in, and then moving every year or two to create a rental out of the old place. Women are less excited about that idea. So you either want to be a single dude or a guy with a partner who is open to that idea. That's true in Denver, Colorado Springs, and I'm guessing most anywhere. 

@Paul Graham

Congrats on taking a big step toward real estate investing. You're in a decent place for it. Colorado Springs is not what it used to be in terms of prices. (Don't look at the history of a home price just in the last few years, unless you want to feel really bad.) But it's better than a lot. And I'm a big advocate of making that first investment in your backyard, so to speak, where you know the neighborhoods better and you're nearby to address any issues.

You talk about getting a HELOC but also flipping the first one as a way to generate enough income for a rental. Are you saying the HELOC wouldn't get you the needed down payment for a rental?

As far as options ... there are tons.

It sounds like you already own your primary residence and don't want to move, so maybe the house-hacking option is off the table. But you find yourself a decent 3 or 4 bedroom house and rent it by the room. Heck, I still think the right SFH in the Springs can cash flow with a long-term rent. Colorado Springs' regulatory system -- unlike Denver's -- is much more open to short-term rentals and Airbnb, so you can go that route.

I'd say talk to a lender, find an investment-minded agent and start to develop a plan that suits your interests and goals. Good luck!

Hi @Diane Tycangco

Are you working with a Denver agent? If so, they should call the HOA and get the details. There are any number of reasons why a condo complex might be non-warrantable. More than 50% of the units are rentals. One person owns more than 10% of units. Terribly low reserve funds.

The reason why that's a big deal is that Fannie Mae and Freddie Mac won't buy a loan if it's on a non-warrantable condo. And because they buy almost all loans, if it's non-warrantable, it's hard to get conventional lending. In some instances, you can go FHA, but that requires the complex to be FHA-approved, and it looks from the FHA site that they are not.

That leaves two options: 1. Do as @Jerry Padilla said and shop for a portfolio loan or 2. alter your search for a different complex in Denver (or Aurora).

Good luck.