All Forum Posts by: Austin Snow

Thanks, all! Some great insight here. With regard to getting something from her company, the way I read the email sounded like she was asking what I'd need monetarily from her company to break the lease. e.g. it would be part of her relocation package. I know she works high-level management jobs and gets paid in the mid-six figures, so it would make sense that she would tell her company she needs to break the lease, and they'd ask her what that's going to cost as part of the package. In most instances, I'd likely let her know that she's liable for rent until I find a new tenant, but in this instance I simply don't want to leave anything on the table, i.e. you don't get something unless you ask for it. Regardless, I'll probably end up simply asking for coverage of rent until a new tenant is found. Thanks again, all.

I’ve run into a situation with a tenant that wants to break the lease, wanted to throw it out there to see what other folks would do in this situation.

Tenant signed a lease active from 9/1/2019 - 9/1/2020. The wife filled out the application and was approved on her own and is the only one on the lease paperwork. It quickly became apparent that her husband was the point of contact, which is no problem. He’s the one who calls/texts me for any reason, including asking to delay the rent due date a couple times earlier this year. Come August 1st (6 weeks ago), he texts me saying they want to renew the lease for another 12 months (through 9/1/2021), which sounds good to me. I tell him that I will extent the lease on Cozy (my mgmt. site), and that it will send her an email (since her email is the one used for the lease), and that she’ll need to get log in and confirm the changes, which she does.

Then I get an email over the weekend from the wife: Her husband has been living back in their home state for at least 6 months, and everything we have discussed has been forwarded to her via phone screenshots. She claims that she didn’t know he had renewed the lease for another year (even though she had to open the email she was sent from Cozy and approve the change) and was planning to ask me to go month to month, even though that communication should have been made on August 1st (30-days’ notice prior to the end of the existing lease). She says she took a position on the east coast (we’re in Colorado) and would like to vacate the house on 10/31, and asks “what would you need from my company to break the lease”.

So that’s what I want to throw out there – what would you ask/require in this situation? Even though the husband is the one who texted me asking to extend the lease, she approved the extension so I feel it's binding at that point. Assuming that is the case, I'm not going to force them to pay the full remainder of the lease, but I want to find a middle-ground. I know that finding another tenant in Nov/Dec is going to be significantly harder than finding one in August or September which is what I was originally looking at. Add that to the fact that she asked what I need “from her company” to break it. Thoughts?

There's a home in a neighborhood we like that's being auctioned off on 2/15. In the county I live in, auctioned homes need to be paid for, in full, on the same day as the auction. 

This house might be worth $330-350K on the open market, but it's likely to go for less than $300K at the auction. Here's where I'm trying to get creative:

I have around $190K cash-on-hand, and I'm thinking about borrowing another $100K+ from a willing parent to possibly fund buying this property with cash. 

The key is that I would like to then turn around and refinance the home to be able to pay the borrowed cash back and to recoup some of my liquid capital. 

Has anyone ever done this kind of thing? I'm just curious as to whether or not I'll be able to refinance right away after purchase. 

Thanks for the thoughts, all. 

@Matt M. @Bill S. We are selling within the 5 year capital gains window (lived in it for 2+ years and have been renting it for 2 years). So no 1031 needed to avoid CGT. A portion of the gains will be spent as the downpayment for our next primary residence which will happen in the next couple months. After that, I was going to use a large portion of the remaining (~$130K) toward the cash purchase of a cheap place I can rent in another city, hence the original post. 

I have a full time job as an engineer so my real estate ventures are more on-the-side and long term focused instead of being aggressive. After we have two homes in Colorado, my equity stake in those will be substantial given the expected market gains. So my goal in this 3rd property is straight cash-flow. If I can buy with cash and net around $600-800/mo after upkeep and property management, I'll be happy. 

@Jacob Pereira Your assumption is correct, but the price point of those surrounding markets is still a barrier to entry for me. Anything that IS in the range I'm looking at is either an apartment or in a relatively undesirable area. I can't support a 3rd $350K mortgage while a single-income family of 4. So a cash purchase was the plan to get into a 3rd property while avoiding financing. Good tip though. The funny part is that Denver-proper has become so popular and costs have gone up so much in the last 5 years that what you're describing has already taken place and the suburbs are seeing similar increases, at least in the more desirable areas. Maybe Austin will catch up soon? ;)

@Andrew Johnson I absolutely agree with this after doing some more research and reading some responses. As noted in my response to @Jacob Pereira above, there are definite undesirable areas in the greater Denver area that I'm avoiding, and the only reason I know about those places is because I lived there! There's no substitute for that knowledge, or like you suggested, having someone you trust that knows the area. 

@Bill S.

I'm in the process of selling the first rental property I purchased and will be netting quite a bit of profit thanks to the Denver markets increases over the last 5 years. Then, I'm going to buy a new primary residence and rent out our current primary so I'll still have one rental property. 

We're a single-income household, so my salary won't support buying a 3rd $350K house, but I'll have a fair amount of cash on-hand and want to invest it into another rental. 

The problem is, the only housing/rental markets I've ever known are Denver and Northern Colorado: Prices are high and increasing, rents are relatively high, and vacancy rates are low. 

I'd like to branch out and look at paying cash for another rental property in a market where prices aren't so high. For example, there are plenty of homes for sale in the Tampa/St. Petersburg market around the 100K range. 

I realize that there is a lot of legwork and homework required for this kind of thing, but I'm curious what experiences other folks have had in a similar situation? Is it overly difficult to find the "right area" when you're evaluating and buying from long distance? Any tips on general areas/states/population centers (cities)? 

@Theresa W. Thanks for the thoughts. The measurements work out, as there is sufficient width in the lot while maintaining the standard setback distance on the block. Having the city change the entire block to match the nearby U-TU is a good idea - I'll have to think about that more as a plan B. 

@Brad Saari I just emailed our city council rep (Espinoza) and asked some general questions about the issue. A builder I spoke to, GJ Gardner, mentioned that Espinoza isn't particularly friendly to redevelopments, but I'll report back what he says. 

@Tripp Howell I agree with your assessment - I'll likely keep it as a rental if I can't change the zoning somehow. 

@Tyler Howell It IS very hot - we were lucky to have stumbled onto the home as a bank owned. I think the scrapes will be less common north of 44th because of the zoning. The profit potential on a SFH is still good but not like the two-unit potential. Why do you say you wouldn't try to re-zone? I'm not in a rush to build - I'd be happy to have renters in the unit for as long as it would take to potentially re-zone and then build. Win-win in that case.

It's 6050. 

Where do you come up with the 6250 number? The area to the south that I referred to are coded U-TU-C --> Urban - Two Unit - C (5,500 sq ft minimum zone lot size). Like I said, most of the neighborhood looks the same (as far as lot size/configuration) and you'd never know that there was different zoning. 

Looking for some advice and hopefully some input from people with experience in the Denver area. We own a property just outside downtown Denver in the Sunnyside neighborhood. The home is an 850 square foot SFH that was built in the 40's. The location is wonderful but I hate the structure, which got me thinking about a scrape & build (since that's already happening so much in the area).

We rent the home for $1800/month but will up it to $2000/month in August when the current lease is up. Current loan on the property is $180K ($1050/mo). Current value of the property is $325K.

New construction duplex units in the general area (NW Denver) are selling for around $600K each. I'd love to scrape the current structure and build a duplex - all-in construction costs would run around $550K, sale of both units would bring in $1,200,000 revenue, paying off the current note would leave profit of $470K, and we'd net around $400K after broker fees and stuff. 

The financials work. The issue I've discovered is that the lot is zoned U-SU (Urban, single unit). The property is literally 700 feet from the area of the neighborhood zoned U-TU (urban, two unit), with no visible difference between the two zones (other than the duplexes going up!). 

Has anybody (in the area, preferably) ever dealt with potentially rezoning a single unit lot to a two unit lot? Might try redeveloping as a single unit but want to maximize with the duplex as you can imagine!

We had looked into it. They'll also finance a higher LTV amount for your primary residence, if I remember correctly. Nonetheless, we closed this morning on our new primary so we'll have to work with whatever we can off of the rental property.

No PMI so we're in a good spot. Our monthly payment is very desirable given the rent we're charging but I'm tossing around the idea of refinancing to increase our cash flow even further - we're at 4%. I need to run the numbers on the closing costs to see when it'd pay off.