All Forum Posts by: Tanner Crawley

@Michael PaccioneHaving lived in both CO and AZ I would much rather invest in CO Springs. Phoenix is screwed in the long run and is already unbearably hot with 170+ days over 100 degrees. In addition to climate change Phoenix has insane urban sprawl and the heat-island effect is enormous. As water shortages happen all of the grass lawns/greenbelts/golf courses will likely convert to xeriscape, or worse (turf) which will only amplify this heat islanding. In summary, yikes. Colorado Springs is great. It sounds like you are considering selling some appreciated assets to reposition into real estate? If this is the case you should consider investing into Opportunity Zones which will let you defer your capital gains, reduce the basis, and exempt all further gains for quite some time. Colorado Springs has one of the best Opportunity Zones I have seen and I spent some serious time analyzing dozens of deals for a national Opzone Fund. The SE shoulder of Downtown is an Opportunity Zone and is already experiencing rapid redevelopment. I am actively looking for something there for myself.OpZones aside. I love the Colorado Springs Market. Tertiary cities and lifestyle cities will likely be the biggest winners from the pandemic and rise of remote working and CS fits the bill perfectly.

I have PM'd you some relevant articles.

@Joseph Yallop

What kind of properties do you have? Are you planning to sell them as a portfolio or individually? 

If they are on the cheaper end you should consider a portfolio sale to a land trust. We need affordability bad here in Denver and there are some groups who may be able to streamline the whole purchase and get you market rate.

In Denver, you can only operate an STR out of your primary residence.

@Zachary McDonough

There are plenty of ways to add value.
- Deal Finding: If you bring a good deal or find a good deal then you are instantly adding value.
- Niche Knowledge: (STR rules, ADU's, Zoning Expertise, down payment assistance programs, AFH, Opportunity Zones, etc)
- Discounting: (If you are new you could always discount your services to add value (reduced commission for brokers, lower management fee, reduced fees for JV's).
- Superior Service: Somewhat counterintuitively you can actually add more value despite being new. If you are a new broker and don't have any clients you can be much more available to a new client. The same applies to development, flips, etc. A project with undivided focus (albeit unexperienced) can often go better than a project run by a professional but is not a priority.

Here are my top few things. Narrowing it down to #1 is challenging:

1.) Investment experience
2.) Familiarity with financing products
3.) A strong knowledge of the local market
4.) Some value add above and beyond contract work/letting you into homes. This can be sourcing deals, analysis, contractor connections, etc. 

It depends on how savvy your partner is. Typically if you want to take outsized returns the LP wants a preferred return of 8-12% to be paid back before any distributions to yourself. Next should come distributions until your initial capital is paid back + that 8-12% return. 

Then you would typically get 15-20% of the returns above that 8-12% in addition to the returns earned on your own equity going forward. 

Good luck getting your anti-potassium agenda past the powerful pro-banana lobbying groups!

Are there turfs that don't conduct heat? That seems to be the primary obstacle for turf adoption in Phoenix.

@Dan Guenther

The ADU laws here in Denver are quickly expanding and have become less restrictive. I have only been here for 5 years and the area in which ADU's are permitted has at least doubled. I dove deep into the strategy a couple of years ago and there were a few insurmountable obstacles.

-They are hard to finance
-They are prohibitively expensive
-It can be tricky to find an appropriate lot

I even explored using modular and prefabricated options but the 36' horizontal max makes it impossible as modular options are long and skinny so they can be transported. If you can figure out a way to make it work well the potential market is so large that you would be handsomely rewarded. ADU's are much more mature in certain markets and are able to be financed more easily and built cheaper. Hopefully, this becomes the case in Denver as it would be a great density driver and affordability solution... Someone correct me if any of this has changed as it has been a little while since I have been involved in the ADU scene.

Secondary cities or lifestyle cities will probably benefit the most with the rise of remote work. Those migrating from expensive cities such as New York, San Francisco, Seattle, etc will still probably desire all the amenities of a major city and seek to relocate to a smaller city that still has major sports teams, great food culture, transit options etc. 

Lifestyle markets are already seeing a boom that will likely continue. Think ski towns, surf towns, climbing towns, etc. Having a lucrative career and being able to pursue these passions is no longer mutually exclusive and I expect some of these markets to continue to surge.