All Forum Posts by: Matthew Rutledge

I would not immediately rule out a place with asbestos. But I would use that as a bargaining chip.

For this one, look at the numbers VERY closely. Especially if you plan to finance the purchase.

Being a bit conservative with rent, and assuming your numbers are correct, it looks a lot like a cash flow property on the surface - depending on the finance situation.

Rent in 1800/month (21600/yearly)
HOA 400(4800)
Taxes 100(1200)
Insurance 100(1200)

Remainder - 1200/month

I'm not a pro, and I would love to see one of the better practiced folks take a stab at applying the 50% rule. (Where does the HOA fee land?)

My immediate concern is that $400/month HOA charge. If you have to finance a good chunk of that 185-190k the cash flow gets really tight really fast.

I spent many years living in the codos at 2707 Valmont Rd up in Boulder. I was offered the chance to buy the unit I was living in for $120k back about 2002. I declined because I knew the place wasn't worth that. (1 bed, 575 square feet, basement model.) It sold for $109k. The new owners tried to sell it last year for 104k and couldn't. Zillow says the place might be worth $116k today. Zillow says the place should rent for about $1100. Reality is closer to $700-800. (I was at $600.)

My point? Know the market. Know the property history. Craigslist will probably tell you more than zillow. When you think of college kids trying to find $2k/month for rent, what do you think they do for that money? They invite people over to crash. They venture into other somewhat legal enterprises... In my opinion, college kid rent is under $1k. Grad students might be able to push $1500.

Personally, I wouldn't touch a rental in Boulder. Not only are college kids a pain the county has some rules on deposits and interest that don't really follow market trends. Unless it changed, deposits are to be returned (assuming they are returned) with a 6% interest rate assuming you were able to invest that deposit money and make more than that.

Just my $0.02. Not saying don't do it, but run the numbers and understand what your goal is.

-matt

I would also love to hear about this.

Anthoy James, have you considered golf? Most people will agree that golf courses are beautiful. I have heard several people comment about the networking, team building, and overall bonding that is possible on the golf course.

That, or just have a couple kids...

-matt

Welcome aboard Eric!

Welcome Jeremy.

I hope to find a deal down your way in the not too distant future.

Welcome to BP. Seems you have poked around enough to recognize what an incredible resource this site is.

-Matt

This will be the only update for a few weeks. I'm taking some time off.

Last week I had a remarkably short and informal meeting with the loan officer at a local bank branch. (Large-ish bank, small-ish branch.)

The process to get a HELOC seems to be stupid simple. It might be done this week, but we're not going to push it. Getting the loan now won't really buy me anything compared to getting it in a couple weeks.

Watching the MLS listings for the area's I'm interested in purchasing is interesting. Some aspects of the market seem to be picking up. Others are still lowering prices. I know June and July tend to be the hot times to buy/sell. That might explain it.

Regardless, I'm going to try real hard not to worry about it for a few weeks.

I also consider myself a newbie.

I entered into the world of REI by accident. Back in 2009 we had the opportunity to buy the home of our dreams. But we didn't want to sell our other home at such a low price. So we rented it. After learning a fair bit quickly (involving courts, lawyers, dead beats...) we are ready to jump in on purpose.

There really aren't that many other resources that can provide long term passive income.

I have had good luck with Patricia @ Schumacher Tax. She isn't the cheapest, but she is good. For your first visit, plan a 2 hour time slot. I don't like posting phone numbers online. They are in the book, and their address is 1895 S. Pearl St.

Tell her Matt sent you.

Oh, and thank you for your service. some of us really appreciate it.

I've heard of lots of people just walking away from properties down there - my parents included. The area really got hit when the bubble popped and hasn't quite recovered. That is part of why I think it's still a decent area to buy.

Thanks for the encouragement Ziv Magen. Right now I know I am not mentally ready to look too far from home. I know there are some markets that might be "better" but I'm pushing my comfort zone a bit just jumping in on purpose.

"Wholesale one or two" was probably the wrong way to phrase it. I have a feeling I'm going to find a fair number of potential deals that don't quite fit what I'm looking to get into. Hopefully I can pass those onto others.

Waiting for a few days for the refinance to wrap up. I'm excited and nervous to speak with the loan officer at the bank.

Looking at the calendar again, I think I may have been aggressive with my timing. Unless I find something just incredible on the MLS I'm probably not going to be able to put things under contract next month. Maybe it will come together, but while I'm excited, I'm not in a hurry and don't really want to sit on something over the winter. That would be a "bad idea."

I meant to put this here on Friday.

Signed the paperwork for the refinance of the original rental house this morning. Finally. The underwriter made a mistake that almost cost us the lock. And the fires in Colorado Springs evacuated the corporate office of the place my wife works so they couldn't reach someone when they called to verify employment. But we got it all nailed down.

We need to let this one "age" a bit before we do anything else. Loan should fund on Monday, and be purchased Tuesday or Wednesday. After it is purchased I will wander into my local bank and start talking to them about 90% LTV line of credits. Once that is set up, I will be in a "cash buying" situation and then things will heat up quickly.

I have a couple neighborhoods picked out. There are retail homes available, foreclosures, and I'm sure there are also various distressed properties just waiting for the right buyer. The lady from the title company knows a realtor who works with one of the local banks... It's all starting to come together.

I will start the loan discussions late next week. If everything goes as planned we will have cash available by the 21st. If things line up, I might make my first offer as soon as the 15th of July. (Vacation and stuff has to happen!)

I'm getting excited. It's almost time to see if I've actually learned something with all the reading I've been doing.