All Forum Posts by: Kenny Smith

...can excessive rain really affect my foundation?

In many areas, the soil in Colorado is heavy clay. The soil is often red, derived from igneous, sedimentary and volcanic rocks that existed in the area thousands of years ago.

Soft soil like this can be of concern over the longevity of your foundation if you don't ensure it is properly protected.

If the soil around your foundation gets wet, and dries out, that can cause the soil to expand and contract. These soil changes can cause the foundation to crack, fracture, sag, and weaken.

With all of the rain Denver has gotten recently, taking preventative measures to ensure moisture stays far away from your foundation is critical.

1. Ensure proper grading around your home
2. Install a French drain near your foundation
3. Install a sump pump in your basement
4. Clean your rain gutters regularly

If you are dealing with flooding issues right now, I'd be happy to get you in contact with a professional that can help!

Best,

Kenny

@Heather Kiddoo

Welcome to BiggerPockets! You have hit the JACKPOT of resources for real estate investors. You can literally find answers to all of your questions within the confines of this site. Some quick tips on accessing the best info from here..

1. Subscribe to the BiggerPockets Money and Rookie Podcasts

2. Attend the FREE WEBINARS

3. Attend a Meetup in your area/virtual meet ups

4. Purchase the Beginner Books: How to Invest in Real Estate, Set for Life, The House Hacking Strategy

5. Peruse the forums, ask questions, and answer questions.

You'll be well into your next deal in no time..

Best of Luck!

Kenny

hello BP community!

Likely you have already received your new tax assessment for your home for the coming year. And likely, you are quite surprised on what your new property tax bill may be.

Every 2 years, your house will get re-assessed by the county tax assessor. As property values go up, you guessed it, so do your property taxes.

Seeing the last 2 years we have seen dramatic increases in the market as far as home prices go, folks are quite taken back with their new bill. And for good reason. If your property value has gone up say 50% in the last 2 years, your tax bill will likely see the exact same increase.

The assessment process is actually done the prior "even" year on the appraisal date, which is June 30th, 2022 in this case. It is done by doing an appraisal using the market approach to value process, which essentially comparing the property to the most comparable sold properties on the appraisal date.

Once complete, the formula is as follows

Market Value X Assessment Rate = Assessed Value
Assessed Value X Mill Levy = Yearly Property Tax

The good news is if you feel like you have gotten an unfair market evaluation of your property, you have every right to appeal this to the county assessors office. You have until June 8th, 2023 to do so.

I'd be happy to provide a 100% complimentary market value report for you to determine if you are indeed overpaying for your property taxes. 

Reach out and I'd be happy to help!

April was another very busy and rapid month when it comes to the Denver Metro real estate market goes. It's important to understand not just home prices throughout the market, but why it's either going up or down.

Tracking the numbers, we are still at very low inventory with last month ending on right around 4,200 houses on market. One may look at inventory and be able to tell right away that is why home prices are either going up, or down.

Yes, that is part of the formula, but days on market is also VERY important when determining how the market is doing, and how active buyers are or are not.

Days on market is an often overlooked statistic for some, but using this data point will give you a better understanding of the pace of the market.

In January, we ended the month at an average of 42 days that home sat on the market before going under contract. Last month, we finished at 27. Still a long ways away from our average of 8 of last April, but the numbers continue to go down.

That tells us the demand is still very strong, and people know it. IF you are in the market or are going to be in the market anytime soon, understanding this statistic is crucial for you buying or selling strategy.

@Dylan Speer

Great question!  So, if you look at Denver as a whole, and where interest rates are at right now, doing any type of long term rental is not going to cash flow.  It's just not the market we're in right now.

If you want to make a property cash flow, you have to get creative. My speciality, and what I help my clients with is house hacking..specifically single-family non-conforming duplex conversions. In a nutshell, find a single family home in which it has the capability to essentially have completely separate units and you live in one portion, while you rent out the other. We like to maximize our revenue so we run that rental unit as an STR. When you move out of the property to go do it again, the unit you were living in can now become another rental. We do a mixture between STR and MTR with those homes, and yes, they cash flow fairly well for us.

It is all about being as creative as you can right now.  So to answer your question, cash flow and appreciation.  It's a win-win.

Have you been looking in the area as well?

Hey BP Community!

When it comes to where to investing in Denver, it can be quite overwhelming figuring out where it makes sense to make that big investment. There are several factors to consider when thinking about what neighborhoods to invest in..

1. Desirability - depending on your strategy, finding a location in which your guests or tenants will find desirable is critical to limit vacancy and maximize revenue.

2. Price - an obvious one, but where does your money go the farthest without compromising potential rental income.

3. Natural Appreciation - this is a big one. Figuring out where the next up and coming neighborhood is, before everyone else finds out about it, will put you on the fast track to wealth building.

Southern Westminster checks all of these boxes. This centrally located neighborhood offers easy access to major highways such as 36, 25, 76, 70, is 10 minutes from downtown, and very accessible to the mountains is perfect for someone wanting to see all Denver has to offer.

With entry level prices of $450k-$550k for a single family home makes this area a great starting point for someone with a limited budget.

Lastly, I believe natural appreciation is coming to this market in a big way over the next several years. Although these neighborhoods may not be the best looking currently, 5-10 years from now, I believe they will take on a very different look. With the neighborhoods just south of here beginning to be unaffordable (Highlands, Sloans lake, Berkeley) for your average home buyer, the bubble must expand outward. New SFH's/Condos/Townhomes are already beginning to take over in this area, and is just a matter of time until southern Westminster follows.

Thanks for reading!

@Luke Stewart

Second Tuesday of every month!!  We'll see you next month!  

And first round is always on us :)

@Alan Asriants

All great points! What I always tell my clients is to have a plan A, B, and C. Plan A being the most profitable (STR), Plan B being a medium term rental (if laws change, STR market saturation occurs), and of course plan C being an LTR.

If you are buying in this market today, LTR's are very hard to cash flow.  At least in my market of Denver, CO.  However, even buying at a higher rate, when rates drop (eventually), you can always refinance into a lower rate at that point.  If the numbers work as an LTR at a lower rate, say 4.5.-5%, I'd say you have a good deal.

Leading with Plan A, but knowing if all goes to you know what, you have that plan C available and you aren't hemorrhaging money.

IF only plan A works for a property, personally, I will not take that risk.  I'm sure people will argue they will and that's fine, but seems too risky for me.

Best of luck!

BP Community!

Whether you’re a longtime real estate investor, new to the game, or want to get started, you need to read these 2 books.  Both are from BP here, The Book on Tax Strategies, and The Book on Advanced Tax Strategies.

If you are a current investor and don’t know what a step up basis, a cost seg report, accelerated depreciation, and much more are, you are doing yourself a HEAVY disservice. Most likely, you’re leaving THOUSANDS of dollars on the table for Uncle Sam by not doing your taxes correctly.

People say there are “loopholes” in the tax code wealthy investors take advantage of. Really, the tax code is written a certain way promoting people, especially real estate investors, to take advantage of it.

You just have to have the knowledge to know what questions to ask, and a licensed accounting professional can take it from there.  These books will open up a whole new side of real estate you may never knew existed. Start learning today, you won’t regret you did!

Best,

Kenny

Hey BP community!

Anyone know of a good credit union that could offer a HELOC on an investment property?

Thanks!