All Forum Posts by: Jose Fernandez

@Benjamin Taylor hope things are going well.  I currently have 5 doors in Denver, so by no means an expert, however I've experienced some different highs and lows over the past few years while searching for investment properties.  Happy to connect.

@Nick Cooley I've had a Section 8 tenant for around 3 years, and my experience has been great.  Upfront there is some extra paperwork that needs to be filled out for Denver Housing Authority, but overall it was a smooth process.  You would follow all of the traditional steps (signed lease, security deposit, etc) and then once you and the tenant have submitted all of the required documents to Denver Housing the house would need to be inspected.  I don't know the exact list of items they look at in the home inspection, however I believe the inspection is there to make sure that everything in the house works, and that there are no safety hazards.  The other thing to note is that you would need to notify Denver Housing with plenty of notice if you are planning to increase the rent in the future.

@Kayla Givens one of the groups that I've enjoyed attending over the years was ABNG.  They have locations throughout the metro area, and I've met some great folks at the events.  It's a relaxed environment, and the main goal is the get to know people in the area.  I believe they are now back to meeting in person every two weeks.

@Katelin M Barson I share the sentiment of many people on this thread that condos generally aren't as good of an investment as a SFR or an attached unit with a party wall agreement (no HOA). I like to focus on Denver when purchasing investment properties, and I look for a number of things to determine the ROI. 1. Can I get the property at a reasonable price and add value myself (ie a property that doesn't show well, but has potential by maybe redoing some flooring, and upgrading the appliances) 2. Are there other areas of intrinsic value within that property (ie large garage, large lot, favorable zoning for future development, etc). If a property meets those criteria, I can usually cashflow somewhere in the $600-$800/month range, which translates to a 7%-9% cap rate (the cap rate would depend on what you pay for the property, as well as your monthly rents). Also, the reason I stay away from condos is that even if you find a condo with a low HOA, you don't have much control over future assessments and increases in the monthly HOA, which would negatively affect the cap rate on that investment.

@Jeremy Gaal I believe the City of Denver will require licenses for multi unit rentals starting in Jan 2023, and SFR rental licensing would start Jan 2024. Boulder has been requiring landlord licenses for a long time, so it seems that more cities will likely jump on board as time goes on.

@Amanda Young

If I understood the situation correctly, it sounds like you had to go over asking price on a recent investment purchase, and in addition you ended up covering the appraisal gap on the purchase.  When an appraisal comes in low, the bank usually reduces the amount they are willing to loan due to the low appraisal (unless purchase price is renegotiated.)  For example, you offer to buy a property for $400k, and the appraisal comes in at $380k.  In that scenario your plan was to put down 20%, and you would originally expected a loan of $320k based on the $400k purchase.  Once the appraisal came in low, the loan amount would be revised off of the lower 380k number, which would leave you with a new loan amount of $304,000.  In that scenario, the seller would end up getting the same "net", however you would be out of pocket the additional funds due to the appraisal gap/low appraisal scenario.

@Harry Standafer 

It's likely that you'll probably come across houses from the 1950's that have significant deferred maintenance, and others that may be in better shape if the owners have kept up with repairs over the years.  In Denver we see a significant amount homes that were built in that timeframe, and many of them have asbestos.  If you're looking to potentially do some major renovations to those homes, you will likely need to account for some type of asbestos mitigation.  I've seen homes where the mitigation can be as low as a few thousand dollars, or in some cases north of $20k.  It just depends on how big the remodel is, and how much asbestos has to be removed. 

@Jason G. @Frank Calderaro

currently investment property rates in Colorado are around the 3.25% to 3.375% range (based on this morning's rates). That would be for a scenario with a 75% LTV investment property. I've been a mortgage broker in Denver for the past 7 years but we have clients all throughout Colorado. Happy to chat anytime

Hi Tristan,

It sounds like you may need a portfolio loan.  In my experience these type of niche loans are usually offered by local banks (not necessarily the big box retail banks, but more so the local banks which have 30-40 locations versus thousands of locations).  These local banks can sometimes offer non traditional mortgage loans that they service themselves, and this allows them to have more lenient underwriting as compared to traditional mortgage loans.  Usually these portfolio loans will have a slightly higher rate than conventional loans.

I would recommend setting realistic expectations regarding how involved you're willing to be as a landlord.  Being a landlord is a 24/7 all in role (if you want to be successful).  If you don't have that kind of time, or aren't willing to deal with the headaches that can come up, outsource those operational tasks to a property manager (fixing a furnace, finding prospective tenants, dealing with neighbor complaints, etc).  If you have the time and are willing to be involved, know that there will be times when you do get the Sunday evening phone call to deal with a rental issue.  Although those type of phone calls don't happen frequently, I think it's important to be aware of it upfront.  It all depends on the level of involvement you want, versus cost of outsourcing those tasks to a property manager.  I've talked to many friends over the years who are also landlords, and I've heard the pros/cons of both scenarios.