All Forum Posts by: Travis Sperr

As a general rule for non slumlords - fix it as soon as possible - 3 days isn't that long in the grand scheme (easy to say when it isn't your hot water). Of course with out knowing specifics - I would ask for a rent credit now, most landlords are likely to give it just to keep the tenant cool. 

I would also offer to the landlord that I get it fixed and take it out of the rent - then call someone out of the yellow pages that will fix it the same day. At that point the cost doesn't matter to the tenant because it will come out of rent. 

I strongly dislike landlords that don't take care of their tenants (investments).

If you are looking to do a true cash out, on a personal residence most lenders are going to be the same in regards to loan to value, terms, etc. If you are exploring a line of credit there are a few local banks willing to go to higher LTVs - Keybank was the most aggressive last I saw, but even FirstBank will get up to 90% with the right borrower.

@Kevin H. I use to stay away from HOA properties for the same reasons - but I have found in the right HOA's it can be very lucrative - my portfolio is mostly single families but most recently the attached property is performing very well.

because you said this:

But, unless I reach a point where this can be my primary source of income, I will have to be doing my investing in a way that is at least somewhat passive (because I don't have an extra 60 hours per week to dedicate to the management of a rental property on top of my current job on an ongoing basis).

It sounds like your time to dedicate can be limited - even more reason to find some properties that won't be as management intensive - which might mean enough juice to pay a manager or something attached with some of the management covered by an HOA (water, sewer, trash, landscape, exterior, etc).

Good Luck!

@Manny Dorticos a lot of folk use the terms interchangeably - but I really encourage you to work with a DIRECT Fannie Mae lender - no bank or servicer overlays allows you to obtain the best financing conventional offers. Otherwise you could get capped on properties, need increased reserves, title seasoning, lease credits, lower loan to values, etc.

@Kevin H. out of town ALWAYS looks better on paper than it actually performs - doesn't mean it doesn't work - just means you need to really scrub the due diligence and have the absolute right people in place.

I agree Denver is difficult right now but I am still seeing deals that make enough sense to buy. Last one I purchased was $230k town home in a strong HOA - that will rent for about $2,000 a month, HOA is $180 and built in 2006.

Best to identify exactly what you are hoping to achieve - supplement or replace income, how much, etc. 

Why would the banks stop lending to you? You can finance up to 10 properties conventionally and the right local banks will provide unlimited loans to the right borrower. If you don't rehab, you don't add value, unless you negotiate a smoking off market deal. 

This is going to be a challenging one - all conventional loans will require a minimum of 1 year tax returns for self employed borrowers. You could try working with a local bank, especially if you have a deposit relationship. If I had your shoes on I would try the likes of FirstBank, Westerra Credit Union, Key Bank, etc. The ability to make the monthly payment unfortunately is the not the only underwriting requirement - but proof of a history of being able to mixed with the likelihood of continuing to do so and service other debts is a big piece of it - so I wouldn't tell the lender that working at McDonalds would make this work. 

Without knowing the block and area - I understand not sharing. It is hard to advise, there are not that many truly crappy areas in the metro - based on what you described it sounds like globeville or north Park Hill. It doesn't sound like an area I would be buying - too much of your upside is based on what other owners do. 

I'd budget $8k for gas and electric service. Every project is different but the pricing is pretty reasonable. I am building 8 units south of colfax right now and I believe my electric service was $3200. I don't recall gas of the top of my head. The cost of xcel hook ups are not going to make or break your deal, or will be the very fast rising cost of construction that's going to get you. 

the biggest mistake I see on pro formas from wholesalers on new construction is the cost to build. For that product you are probbaly around $150 a ft for construction costs  ( all costs excluding land and financing). Also without knowing your experience and financing abilities expect a lender to not want to fund all of the construction at once because of an area where new construction isn't super popular. 

If this is the deal I think it is, you have to ask yourself why hasn't anyone else jumped on it. My guess is the cost to build is too high for the resale value.