All Forum Posts by: Phillip Bicker

Colorado is a super lien state where an HOA lien can have priority over a 1st and/or 2nd mortgage, and any other subordinate liens or judgements on the property. The lien remains with the property through the sale, so yes, you will still owe the HOA lein. You may be able to negotiate a lesser amount through the HOA, but they still have the ability to foreclose on the property to recoup was is owed on the HOA if it is not paid off. Good luck!

@Conor Funk  

We look forward to having another determined and intelligent builder heading our way! Welcome to the Denver BP community. 

You are right on that prices are high in the Denver metro I would recommend the BARRRR method or potentially finding a househack as long as you are patient, but ready to jump on an opportunity should one arise. 

Good luck in your home search and the beginnings of your investment career in Denver Metro!

https://www.biggerpockets.com/renewsblog/forget-br...

@Grant Shipman

Honestly, the best way to understand these documents well (and to learn it in a shorter time-frame) is to have *an experienced* agent walk you through them, line by line. If you are using an agent to help you buy properties, they should be more than willing to do so. I would recommend doing this before making an offer so there is no time pressure. Doing this will also help you to be more confident with your Realtors (or help you to see you may want to use another one if they can't explain this crucial document). 

For the closing docs a good agent should be able to help there, but I might actually recommend going directly to a title company and asking if you can have a title rep or closer walk you through the closing docs.

@Douglas Abbott 

Hey Douglas, one of my investor clients recently got a 75% LTV from his investment condo at ENT bank in Castle Rock if you decide to go that route.

Of course I may be biased as a Realtor, but if I was in your shoes, I would likely use the homeowner tax exemption by selling the current property and buying another similar property in the area if you are happy with the current returns you are receiving (or if not, buying in a new area or property type). If you move 100% of the funds to the next property, you will essentially be getting the step up in basis to minimize your tax burden down the road. For comparisons sake, lets say you have $200k worth of appreciation on your property and a 15% capital gains rate - this would be $30,000 worth of tax burdens that you could "wipe clean" by moving your capital to the next property. While a 1031 is an option if you keep your property and sell down the road, this is only to delay taxes until the final payoff, not to eliminate the tax burden like the homeowner tax exemption. 

This strategy also gives you the opportunity to find something that has a stronger cash flow if you move 100% of the funds to the next property.

You will have selling costs and transaction costs on the buy side, but these would be less than your capital gains taxes that you are now avoiding and will likely be offset by the better performing asset anyways.

6% for this size of a transaction is reasonable, but that is if you are represented with someone who has the fiduciary duty to do  what is in your best interest and is negotiating and working the deal for you. If you went with 6% and they represent both sides, they would be a transaction broker that does not represent the interest of either side and should be discounted. I'd still recommend considering having someone represent you even if they are potentially bringing you a buyer. If they are serious, they will likely remain if you have someone brought on to represent you. 

Good luck with the transaction. 

@Mark Smolin

Have you considered looking south to The Springs? There are some great multi-family and single family home options down there that cash flow and rent very quickly. The area is also seeing appreciation rates in line with the market in the Denver metro. The Springs are nice as you could treat as fully absentee but still drive by on occasion to see in person.

@Manoj N. As people in the Denver Metro are priced out of their homes or as investors can no longer find returns, more and more money finds its way to the Springs market. I included a little blurb from the Colorado Business Journal that shows that the appreciation is just as high (if not higher) than Denver. So you can get both cash flowing properties and appreciation potential. 

For down payment, the lenders I typically work with require 15-20% for a duplex (highly recommend 20% as PMI on commercial is very high killing ROI), 20-25% for a triplex, and 25% for a fourplex. Chris mentioned 5 or more being commercial - that is correct and it is very hard to be approved without a very strong history of rentals, which you have some but it will still be an uphill battle.

Be aware that the MLS system for the Springs is different than the Denver Metro - if you are looking in El Paso county make sure any Realtor you use has access to Pikes Peak MLS. If you are looking at Tri-Lakes area or north, it moves into the REColorado MLS that covers the full Denver Metro. Pikes Peak really focuses on El Paso County, but lines can often get blurred around the borders.

Article on appreciation in the Springs: https://www.csbj.com/2017/11/10/report-shows-incre...

Hey Derek, 

I have a great agent in the area in the top 1% of agents for New Haven County and #4 of 4,000 agents in the Tri-State region. Her team will make sure to get you and/or your company top dollar and they are great to work with. If you mention that Phillip Bicker referred you they will take even better care of you ;) 

Ruth Ratner Cheshire , CT 

@Ted DeKowzan

With the strength of the current market and lack of inventory, a portfolio sale could make a lot of sense and would likely get very near market value (if not at full market value). We are starting to see more of these directly on the MLS and they have done very well, selling fairly quickly.

This method leaves a lot of stress and unknown factors off the table and limits the pool of potential buyers to serious investors instead of dealing with the potential issues of individual buyers looking to buy a owner-occupied unit. 

I have the perfect Los Angeles agent for you that understands the multi-family market very well and has great connections throughout the investment community. He has been working since 2002 and focuses his time on multifamily properties. It is difficult to find someone with a specialization in this asset class, but that is his focus and what he has based his business on. His name is Sami Dinar and I can send his contact info if you PM me.