All Forum Posts by: John Negomir

I'd make sure to check the local regs on STRs. I think you're subject to hotel tax and there may be other restrictions depending on the neighborhood.  But, there's also a huge lack of LTRs/local housing with good seasonal and year round potential, especially if you split it into two units. 

@Account Closed Is this an unfinished basement? In a flip a few years ago we did significant structural work.  I think the key was, even though the basement remained unfinished we made sure it was clean, painted, looked like the details had been attended to (and they had).  My advice would be to look at the area critically and make sure you've done the full mitigation that needs to be done, including filling open cracks, leveling floors if possible, so it looks completed to a buyer. Having the engineers report available is vital and always disclose what has been done. Denver is still strong, but buyers want something that is fully done.

@Sunitha Alli I agree with @Travis Sperr, the best will be pretty busy.  It sounds like you may need to have a GC to put it all together, maybe that's the place to start.  Filling in the gaps between contractors will eat you up unless you find someone to take care of that. The challenge on a full rehab is knowing what you want to do, what you have to do, and what you're willing/can afford to do to get it to come out the way you need.  

A few years ago I did a similar one, 850 sf bungalow, electrical, plumbing, hvac, roof (incl. resheeting), yard, sewer, mild foundation stabilization, new bath and kitchen for about $72K in renovation (pretty hands on as well). Came out great and did ok on the sale.  Costs are probably 5-10% higher now I would think.

+1 for 1stBank.  have had great experience with them at over 10 single family mortgages at one point.  They tend to be conservative, but look at your overall picture rather than just a W-2.

As @Bill S. said, get started because most cpa or attorney folks will want a specific project for an example, and plan the exit strategy when you buy. Other things to consider when you're getting the individual advice from a cpa or attorney is whether you need the structure to allow for partners or not, liability and tax strategies, how you intend to sell/transfer/finance/1031 properties, and what expenses you want to be able to pay out of the business (e.g. health insurance, vehicles, etc).    The challenge is usually in the questions you don't know to ask!

Just a quick thought for the out of state folks, in Colorado electronic signatures are the norm, and the standard contract has a Countered check box that enable initials, and that needs to be done rather than signing the contract just below.  No matter how much it is emphasized to sellers, I've seen contracts get signed rather than countered or in addition to countered a number of times over the years.    Also, you didn't mention if earnest money was delivered, whether the contract was executed correctly with regards to authorized seller for the estate, etc?  In any case, I would see what the counter is, maybe terms not price - the deal still may make sense and you can always counter them.  The initial offer is only the starting point...

On the buy side it depends on your plan.  If you're planning on doing full electrical/plumbing/sewer/hvac then it probably doesn't matter and hopefully your buy price accounts for that.  Outlets, light fixtures, appliances, maybe even doors and windows, don't really matter to me as I know they'll be worked on.  The biggies that you don't always see (read expensive) for me in CO are stable soil/foundation/water intrusion, aluminum wiring or out of favor fuse panels, hvac if not replacing, sewer scope in most older neighborhoods, roof (which will need to be brought to code (shingles, ice dams, re-sheeting maybe) on the sale usually if it's older).  Trees and concrete get real expensive as well. Drain lines really depends on the material and age - 50s and 60s copper drain pipes are getting real thin through electrolysis by now and develop hidden leaks.  If I'm representing a buyer of the post-flip property and those items are not discussed I make sure the inspector pays extra close attention to them. 

It's really hard to get an appraisal modified significantly, at least around here, and that appraisal can stick with the property.  The best defense I've found is to make sure that you (your Realtor) points out all of the improvements in appraisal terms to make sure they are accounted for, and then correlates that to comps that supports the contracted value, including a multiple offer situation.  It takes some legwork up front but hopefully reduces the chances of an appraisal coming in under value.  You can also stick to your guns and go to the nearest offer that has capability of bringing more cash to the table.