All Forum Posts by: Tom Spaeth

Anson - I concur on the flips. There are still deals to be made off of the MLS there. Joe was asking about a rental. I am pessimistic about finding good rentals on the MLS. Not to say it can't be done though.

Of course not knowing the particular area makes it tough to know what you are really looking at. Cash flow it only one part of the equation. A very big part. However you can also not fail to look at the long term direction of this property. I would never want to bet on speculation in this or any market. You should look at the direction of the area. Will the value have any real chance of moving up or downward.

Denver is an overly competitive market. The chance that you will find a deal, especially on the MLS is less than zero in my opinion.

I just helped someone sell two houses that I would never have bought. One one the side of the highway and one in the worst neighborhood in Denver. Neither property will ever gain much in value. Matter of fact the one in the worst area make great cash flow numbers on paper. Any they purchase price was $50k higher than value from looking at comps. 

When either of these properties goes on the market after our market in Denver has normalized the new owners will probably see a net loss on the property.

You need to watch the cross co-lateralization to refi you are thinking about. Most banks (in spite of what a mortgage broker might say to you) will not payoff loans on multiple properties. That gets classified as a cash out refi. Many times that means they say no. You may want to research the process a bit more. An option is to use the equity to guarantee a mortgage with a lender like Merchants Mortgage. Then they will lend on the full fix & Hold project and the refi will take out the loans that are against the property you are working on.

As a mortgage broker told me last year. If the loan is not shown on the purchase HUD-1 nor was it currently an active lien on the property then forget about getting any cash back at closing.

May be a different story if you are planning on waiting over a year to refi. And then there are always some niche lenders. But that's always the gamble.

On the density issue. Have you been in any city recently. The density in cities far exceeds what you are looking for. And I agree I no longer want to live in the big city, but lots of people do. In Chicago lots are only 25 feet wide. That's pretty dense. Other than 1 little fire in the late 1800's after which they stopped building wood buildings attached to each other there is no real problem. You don't hear about fires taking out multiple buildings very often. Heck look at Colorado springs last year. One fire took out all sorts of houses in a subdivision. Good codes prevent the problems not the actual density.

Depends on how good the deal is and how bad you want the deal. You could be the only bidder (Yes banks are just like used car salesman - Any lie will work) or you could be just one of many. Run your numbers and make an appropriate bid. You should rarely be influenced much by the highest and best routine. May be I was to harsh on the used car salesman. Banksters are far worse. :wink:

I am concentrating on the Denver metro area, Denver/Lakewood/Wheat Ridge. Last year I was mostly wholesaling properties in this area. I started fixing properties and holding rentals in 1988. I am looking at properties that have an ARV under $250,000.

I am looking to start 2011 with a few fix and flips. I broke ground last week on the first for the year. I would like to get some others started. So I am looking for an investor so I can get get to work.

Tom