All Forum Posts by: Pablo Hernandez

@Frank Basile

Amazing advice here! I went the route @Jeff White recommended and found a 4/2 house in Lakewood with a detached garage. Currently we're renovating the garage into an ADU (Jeff is also correct here - the permitting process has been difficult to say the least) and renting by the room while we live in the house.

With 2 roommates my gf and I are able to live paying only $450/mo for our mortgage.

Once we have the ADU complete we project we'll be living for free while cash flowing ~ $1,000/mo

Feel free to PM me for more details! Best of luck and welcome to Colorado

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $200,000
Cash invested: $60,000
Sale price: $280,000

Fix and flip purchased through seller financing

What made you interested in investing in this type of deal?

Listening to the BP podcast I found out about Seller Financing and figured I could make this work by negotiating the down payment and getting financed without a bank

How did you find this deal and how did you negotiate it?

Saw a "For Rent" sign go up in front of the property next door to my primary residence and I asked the person putting it up what it was renting for. Got to talking and found out he was the owner, asked him if he had thought about selling it and he said no because rents were doing well. I noticed a couple weeks later the rent sign was still up so I asked him what price he'd be open to selling the house, we went back and forth and finally agreed to seller financing at a reasonable price.

How did you finance this deal?

Seller financing

How did you add value to the deal?

Added central HVAC, remodeled entire kitchen, knocked down a wall, installed new siding, new plumbing, new appliances, basement waterproofed, refinished wood floors, removed popcorn ceilings

Lessons learned? Challenges?

This deal really taught me how to factor in all expenses before purchasing a property - as my first fix and flip I was lucky to make some money but not as much as I would have had I factored in all expenses and known the major issues the house had

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $360,000
Cash invested: $13,000
Sale price: $415,000

Bought as turnkey with FHA and started renting by the room! Allowed me to purchase my 2nd property

What made you interested in investing in this type of deal?

This was my first ever home purchase and I was afraid of getting my hands dirty because I didn't know too much. Just knew that if I rented by the room I could make the numbers work and pay less than I was renting at the time.

How did you find this deal and how did you negotiate it?

Real Estate Agent - I knew what number would work for my monthly mortgage with two roommates I had already selected so we used that number and worked backwards

How did you finance this deal?

Took money out of stock options I had made working for a tech company

@Matthew Dunaway

Hey Matthew - what ever came of this? I’m currently in a similar situation trying to turn a detached garage into a duplex (property is already zoned R2, the lot just isn’t “big” enough)

City of Lakewood requires 10,000 sqft lot for a duplex and we are at 9,500.

I already got a response saying there is no way to get a variance for the square footage, however, I may be able to obtain a variance based on my proposal and what hardships I can prove for an ADU.

Can you or anyone here provide examples of hardships?

Thanks!

I recently purchased a property in Lakewood, CO that is zoned R2. The previous owner built out the garage into a 2nd unit but did not complete it. 

I'm trying to pull a building permit to complete the rest of the garage and turn it into a duplex, but was told by the city that the lot needs to be 10,000 SQFT (ours is 9,450) - they did say we could build an ADU, so we went that route.

However, after digging further, they stated that the structure (that has already been built) needs to be 15 feet from the back neighbors property line.. It's about 7 feet. So "there's no way to build this into an ADU"..

The local planner of the day we spoke to let us know that when this was built, it was technically up to code. But now that they've changed the laws, it's not? 

My question is this - because the structure was built to code (when the parameters were 6 feet from back neighbors property line), are we grandfathered in?

The previous owner had the structure built to code, the framing and even started drywall. I just need to complete plumbing and electrical, which will be expensive but worth the investment. 

Hoping someone has had a similar issue and can help here.

Cheers!

@Dave Spooner - good call, I reached out to them about short term rentals and they were super helpful. Just shot them a message about zoning! Thank you

Started looking for MFH's in Lakewood, CO but everything on the MLS has gone under contract in 2-3 days. (Atleast the duplexes/triplexes that make sense)

So we pivoted to looking for SFH's to househack with basements/detached garages.. and we've found one that makes sense.

does anyone have experience rezoning a sfh into a MFH in colorado?

We'd be looking to convert a SFH into a triplex. Is this necessary to establish prior to getting the work done/renting out the units?

Appreciate the tips!

Found this on the Jeffco website but not sure if it’s still relevant https://www.jeffco.us/DocumentCenter/View/9504/Application-Process-Guide-Rezoning?bidId=y

@Lee Ripma

Thanks for the advice, makes a lot of sense and gives me plenty to think about. Planning on renting for the time being and pinpointing the area we’d like to live in then going from there. The rent control thing is news to me so I’ll definitely have to look into that before even considering MFH.

@Layne T. Thanks, that’s actually our plan. We got a monthly stay Airbnb and are going to look at properties while we’re there. Are you seeing a lot of people move out of LA?

@Courtney Trahan current tenants in the larger home are set to move out at the end of the month, so I don’t have good tenants which is why I was planning on selling originally.

These numbers do factor in property management costs as well as the PMI on the bigger house. I'd be looking at better cash flow if I were to refinance into a conventional loan