All Forum Posts by: Rachel Nunes

@Jay Hinrichs, That was one of the first things we checked. Thankfully in the clear on this one. Between my realtor, the seller's realtor, and the (dual lawyer couple) owners, we've even double and triple checked. I think if it were in a different part of town, we might've run into an issue. But in an area that's more business than residential, we've lucked out. The way all the numbers shake out, it wouldn't even worth my time otherwise. I sincerely appreciate the tip, though. There's a lot to take in when you're brand new at this!

@Matt Skog, thanks you so much for the tip! 

@Kreighton Reed, I don't. If I did, it'd be my first stop. Next year that should be an option, though. It'll make things so much easier!

@Matt Skog

I'm curious, how do you figure out the equity cushion? I know how to look and see what they paid for it, and when, but is there somewhere that you can see whether they've taken out a HELOC or a HEL?

@Matt Skog

Yes, I definitely planned to get started into investing less heavily leveraged. In fact, I wasn't looking to buy right now at all. Well, I was, but I was just looking for an office space to use personally. I had every intention of using the retail space for that purpose, and renting out the upstairs long term. It wasn't until I found out the retail space was rented long term by solid, well paying, interested in staying tenants that I started looking at other options.

I thought the lease option would be perfect because A.) it gives the property a full year or more to appreciate, and B.) I can save the rents collected to make a down payment when purchase time comes. It's *almost* like double dipping, equity wise. But if they don't want it, they don't want it! I'm still learning how to walk away when the terms don't work for me. In my personal life, I have no issue with it whatsoever. But in this, I have to remind myself failure would more likely be a bad deal than a deal I walked away from because it didn't make sense. It's a struggle when I'm so ready to jump in.

Thanks so much for the input. I'm trying to avoid committing to anything either way until after we close on our house on Friday, so I've got a couple more days to consider all the options. 

@Steve Vaughan

We've walked through the condo, and all looks in order. Newer appliances, impeccable wood flooring, newer windows, crown molding, quiet (especially considering the amount of business traffic in the area). As far as I could see, the back door could use a new keypad/lock, but other than that it looks reno'd top to bottom. According to the business tenants, it was rented until fairly recently by a single gentleman. My broker has suggested we go in at an offer at $430 initially, but said that the seller's realtor relayed that they'd turned down multiple offers of lower than full asking. Unfortunately, we have no way of knowing how much lower. According to their agent, they're just ready to move on to other projects (which I realize is typically code for either it's not making any money, the furnace is about to bust, or feral cats have taken up residence in the attic!). 

I share your thinking, though, and I told our broker as much. It doesn't make sense to me that the property is in such high demand, but they can't get a full price offer. I think somebody is blowing smoke. I've run the numbers on a long term rental, and you're right, it's barely break even that way. All the pros I've talked to in the area say the vacation rental is the way to go, but maybe this just isn't the one. I appreciate the new perspective. You've given me a lot to think about!

(side note-- I have a good friend that moved (back) to Colorado from Wenatchee last year, and I'm so sad I didn't make the time to go visit while they were there. It looks like such a beautiful, vibrant area!)

@Patsy Waldron

Great idea!! I will check on that asap. Even in the worst case scenario, it can't hurt to do some networking.

Hi @Chris T.,

After two lease option offers, their realtor made it clear they just want to be out of it 100%, so they're not open to anything other than a traditional sale. But you're right-- a split could work. I've only just moved to this area, so I know... maybe two people?... I'd have to really hustle to find a partner before this thing gets sold from under me. But it's not impossible (or I just don't know when to quit ;-) ). Thanks for the tip!!

Hey all!
I've recently targeted a mixed use property that I think would be a perfect first investment property for my husband and myself. The property is listed at 455k, and is comprised of a first floor retail space, with the upper two floors being a residential condo. The lower space is currently rented for $1850/month, through March of 2017. I'm told the tenant has no plans to vacate, and would like to continue to lease the space indefinitely. The condo portion is vacant at the moment, but given the market for Air BnBs in this area, and the particular location of this property (5 minutes to downtown nightlife, 10-15 to the beach, and walkable to a variety of shops and restaurants), I think it's a perfect candidate for short term rentals. Based on short term rental comps in the area, $225-$250/night would be the sweet spot, and there is, oddly enough, not really an 'off season' here, so vacancy is hard to come by. Alternatively, I could rent the unit long term. Comps put market rent at around $1850/month. Using a conservative 20% vacancy rate, and managing it myself the property would cashflow at somewhere around 4500/month. All things considered, it's a GREAT deal. (*note: I do also have a 35k line of credit available for things like setup/furnishing/operating capital-- I just can't use it for a down payment)

But (there's always a but, isn't there?)...

I am closing this week on a house for personal use. My cash reserve is tied up there at the moment, which means I can't do traditional financing with a 100k+ down payment for an investment property. I have offered (and been turned down for) a lease option, even countering with above asking to see if I could entice the owners. No dice. After the closing on the house later this week, we should have no problem qualifying for traditional financing, but the down payment issue will persist. I had an opportunity for a private money lender for the down payment, but ultimately, he wasn't comfortable in second position. I have an excellent BP member/realtor/investor working to help me bring this deal together, but between us, we're out of ideas. Do I have any options we haven't considered? I can't bring myself to walk away from this one! 

Hi @Brent Griffin!

If you get into the Springs market, try the north end of Briargate. There are so many houses where we used to live in Windjammer that would have been exceptional flips. In our case, we bought the cheapest, most rundown house in the neighborhood for the D20 schools. We thought it was mostly cosmetic stuff because the previous owners had "renovated". Long story short, we spent seven years undoing loads of damage to major systems, replaced the hot water heater, furnace, windows, and appliances to make it livable for us. We were told over and over again that we wouldn't get out what we put into it. But when we decided to sell last January, we decided to give it some cosmetic TLC, and with trim work, flooring, paint, and some landscaping, it sold for about 30% more than the next most expensive house in the neighborhood. We ended up making a pretty decent profit, and it sold 3 hours after it was listed, for 10% above asking. Trust me when I say, for the space, lot sizes, and those award winning schools, you could make a killing if you have a little imagination and the ability to see past largely untouched 1983-ish facades. I'd buy there again in a heartbeat!

Hi @Patrick Orefice! 

What a small world, we moved from Colorado Springs, too! We'd love to hear more about your experiences. I'm sure we could learn a lot from them!