All Forum Posts by: Jeff White

@Kerry Reece no problem, thanks for your input!  

Thanks Jared, yes, since I'm going to be living in one of the basement units, I will definitely be putting in proper egress, and especially since I'm renting the other basement unit out, I want to make sure my tenants have a way out in case of a fire. 

@Kerry Reece@Bill S. @Chris Mason @Jared Bouzek

Hey guys, 

Good news!  Just wanted to give you a quick follow-up, especially Chris Mason since he was curious.   It took much longer than I thought to get an appraiser out there to complete the appraisal.  

Anyways, the FHA appraiser called it a fourplex at a value of 640K using mainly the sales comparison approach.

Even though the basement units didn't have proper egress windows or 4 utility meters in the back, he basically said it was three 2/1s and a 1/1 in the basement since that basement unit has a weird den room with no windows.  

Because he called one unit a 1/1, I had to put a larger down payment since the property didn't meet the self-sufficiency test putting 3.5% down payment.

Thus, I'm good to close this Friday! 

Thanks for all the help.  I plan to add egress windows with proper permits right away to the basement units and other renovations to bring it up to market so I can get maximum rents.  Right now the rents are low since the current owner is renting to family/cousins.  

@Kerry Reece

Good stuff, and with the rents in that area, I know it could rent fairly easily for both the top units and bottom ones if I update the right things and market it well.  Right now, they are renting it to separate groups of family members/cousins/etc for a total of $3K/month for all four units.  

I know the market will dictate much more, how much does an appraiser look at current rents that property is currently receiving vs. market rents it could potentially get?   Or does it depend?  I believe it is severely under-rented because of renting to family members and not regular tenants, so the owners are probably giving them a better deal.  

Also, Villa Park is a excellent neighborhood in a fantastic location next to everything here in Denver, and I could probably easily rent it for $1200-$1400 per each unit.       

@Bill S.

Thanks for providing all that information.  I will definitely find out what happened.  I don't want to be a shoddy landlord and not do things legally.   I want to have everything up to code with proper permits, inspections, zoning, etc.  

Yea, I will keep that in mind regarding the appraisal, I hope it appraises as a four-unit.  No matter what happens, I'm learning a lot through this process that I didn't know beforehand. 

@Chris Mason & @Bill S.

Hi Guys,

It appears to only have two electric meters in the back. Yep, and that's why I'm nervous about it being done incorrectly or listed wrong on the MLS.

I will confirm with the inspector on Thursday.  If I go through with buying the property, I will put in egress windows or maybe negotiate with the seller to put them in especially because I'm going to live in the basement!  

Also, the seller is paying for the appraisal and I will reimburse them if we can agree upon the price, which might change downward if it is a duplex with accessory units instead of a true fourplex.  

Thanks for the tips!     

@Chris Mason

Hi Chris,

Yea, that's one of my concerns is that, appraiser calling it a duplex, but there is one point of exit through a separate stairwell for each of those basement units.  

I will definitely post what the appraiser calls it.  

Thanks for your thoughts!

@Steve K.

I've only seen the denvergov.org record, and that's why I'm concerned, but based on your MLS system results, that gives me more comfort. Thanks for checking!

I haven't received the title information just yet, but I will do more research via calling the zoning and/or assessor department.   

@Russell Brazil

That's what I'm thinking right now, without egress windows, is it legal for today's standards or as Steve mentioned , could I be grandfathered in and not have to worry?

@Steve K.

Thanks for the detailed response. I apologize for not being more clear. It was built in 1963, so it might have been grandfathered in, and the units appear to be designed as a 4 unit with all the small windows in the basement for each bedroom, and based on the kitchen's age, the surrounding tile, the cast-iron tub in the basement bathroom, it looks like that stuff was done back then not recently.

To answer your question, I haven't received the seller property disclosure just yet, but I will look for that. They have owned it for 24 years, so it should be interesting to see what they disclosure or not.

Hi All,

I'm currently have a fourplex under contract here in Denver using FHA financing for 630K, and it appears to be a fourplex with four different entrances, plenty of parking, four kitchens, four bathrooms, and such. It is plenty big at 3,652 total sqft (1,826 sqft above ground and 1,826 sqft below ground). Four 2/1's.

According to the seller and listing agent, it is a fourplex, but when I go check the city and county of Denver page, it shows it zoned as multifamily or E-TH-2.5, which from my understanding is basically a standard zoning for multifamily.  But under property type, it is labeled a "Residential Duplex". 

Also, the two bottom units are basement units with no egress windows (only small 1960s windows).  

My concern is what the FHA appraiser will say? Will he say it is a fourplex and appraise it as such and for close to the asking price? Will he look at assessor records and use that as fact for determining fourplex or duplex? Or will it be a duplex and then appraise for a much lower value (like 400K) thereby potentially killing this deal? Will I have to get it rezoned to get a loan?

That's my concern right now. 

Thanks guys!

@Dave Foster Thanks so much Dave for answering my questions!  That makes sense now.