All Forum Posts by: Andy Thompson

I don't yet have the money/skill to pull this deal off. Still, I'm trying to observe what the market is doing. So through various web searches, I found a property that is going to be sold at foreclosure auction on Thursday, July 24. It seems like the sale price will be starting incredibly low for our area. The Bank has already submitted a bid for the amount due on the loan plus fees. I suspect that the Bank is simply trying to prevent the property being sold at less than owed, while adding the property to its own REO portfolio. There are other properties being foreclosed by the same bank for which the bank has not submitted bids in writing.

City: Denver
Original note info: $100k in 2003.  $40k outstanding.
Bank Bid: $43k ($2k deficiency)
Value (according to Zillow): $260k, seems appropriate for area.
1 bed/1 bath, 1100 sqft.

I understand that Zillow's estimates are not totally reliable, but even if it's 10% high, you're looking at a pretty good margin.

Am I about to watch this property get sold at an incredible discount? Should it be expected that this property will be shredded like chum by the sharks at auction?

What's going on here...and how do I become one of the sharks??!

You would be taking a huge risk in attempting it because in order to pull it off you would be using hack contractors.  No Gen. Liab. insurance, no permits, no work comp.  Totally "fly-by-night" and good luck hitting your timelines.  I don't know what comps are like out there, but you'd have to skimp incredibly on every possible option.  You'd basically be building cabins.  Don't forget the horizontal development necessary: roads, sewer lines, electrical service, and data/internet running to each unit.  Realistically, I'd be surprised if these units were feasible much over 600sqft ($35,000 is $58/sqft...very very low)

But then again, maybe you're the guy who figures out how to do it after others said it couldn't be done :)

In an effort to contribute some positivity here, I'll add this.  Consider looking at how modular homes are built, since they're done on the cheap.  Not quality, but they still get done.  You would definitely need to be the GC on this.  Being your own GC means that you need to run the numbers yourself, as well.  Shop around, and see what you can put together.  Keep in mind that you're not just trying to build homes, you're trying to build an investment portfolio.  Your numbers will have to be absolute and your labor contracts air tight.  Maybe you discover that this plan doesn't work for you, but maybe in the planning process you'll have a brilliant idea that makes it all worth it.

Without re-zoning, probably not.  There is a difference between Single Family zoning and Multifamily zoning.  Even though banks may consider up to Four units a "residential" property, the city has certain regulations pertaining to multifamily (aka "high density") properties.  Even if it were considered a "rooming house", certain regulations must be met.

I can't be any more specific because I'm not a lawyer.  Unless I occupied part of the property in order to consider myself simply renting out a room, I wouldn't want to get caught in the situation you've described.

I usually let the guys dumpster dive for metal.  I don't give them permission outright, but I do avoid blindly throwing stuff over the rim if I see their truck still nearby.  Most often they come after hours anyway.  Personally, I prefer to see the material taken for recycling by those guys than hauled to a landfill.  The guys scrapping metal typically realize that they're trespassing and work quick so as to not get caught.  As long as you're not intentionally making the dumpster unnecessarily dangerous or alluring, liability is pretty low.

Even if you catch a dumper's license plate, you're not likely going to get the police to care and it'll cost you more in time lost to try to litigate. Other than that, your best bet is to shorten the amount of time the dumpster is around to a week or less.  If I'm doing a full construction trashout, I'll easily fill a 30yd dumpster in a day or two.  I did a whole house remodel (full kitchen, new paint, new hardwood, scraped popcorn ceilings throughout) where I staged all the trash in their vacant garage during the month.  When complete, I ordered the dumpster, filled it, and had it gone the next day.  I once had 3 laborers fill a small dumpster in 45 minutes while it was still connected to the waiting truck.

It probably cost an extra $50 in labor to move the trash twice.  A bag or two extra from a neighbor adds nothing overall, so I don't sweat it.  Heck, I've done it myself.  But if your framer is dropping truckloads of his own trash in your dumpster, you don't have a dumpster problem--you have a people problem.

Home Depot's "contractor grade" fixtures are Glacier Bay.  I've used them over and over for clients and they look & hold up great.  Of course, the homeowners I've worked for don't do pullups on towel bars or use the toilet paper holders as assist handles.  Beyond augmenting from negligent use, I recommend upgrading to beefier anchors during install.  Those little plastic blue/yellow/red push-in anchors included in the package are junk.  I never use them.  Instead, I use the E-Z Ancor screw-in anchors.  They have a 75-pound sheer capacity.  For the first time ever, your wall connection will not be the weak point in your towel bar.

I hope you'll find Denver as welcoming as I did! I moved here 8 years ago from the Chicago area, and it only took a few days before I realized I'd found "home."

Investment goals: I'm interested in both flips and rentals. Will be looking for a multi-unit home in the next year or two (live in one unit, update/rent the others). Would like to hold a house every year or two, flip houses in order to afford the rentals. I can do the work, I just need to learn to find the deals!

My clients have been primarily homeowners and I am interested in finding more crossover between my job and my future investments. (I'm trying to play by the rules by not marketing myself in the new member post.)

My name is Andy Thompson and I am brand new to real estate investing. Other than reading a couple books which were written by people mostly selling books, I have very little investing knowledge. I'm here to educate myself on the those realities. In the near future, I'd like to find my first pure investment property. I expect my full time occupation as a residential contractor to greatly inform my purchasing decisions and vision for short term flips and long term rental holds.

Also, I hope noticing a typo on the welcome page doesn't make me seem like "that guy"...I promise I'm much less critical of user posts :)