Denver, CO

A Few thoughts about Fix and Flip Investors' Best Practices

02-07-12

Robert Kearney: Mortgage Company in Denver, CO

view my blog
Office: (970) 532-4243

Mobile: (303) 902-9100

Among other areas we finance business people doing fix and flips. This is a savvy crowd, operating in a constantly changing market.

Here are a few of what I consider "best practices" among fix and flip investors:

They envision how their fixed up house will show (and know exactly what it will cost), before they buy it.
They follow a ruthless discipline of knowing what a house is worth to them.
They know they will not retire on one or two flips, but they will retire on one or two flips per month.
When the house hits the market, lot's of showings means the price is in the ball park. No showings means the price and listing profile is out of the market.
Showings without contracts has something to do with the property. It's time to gather and analyze the feedback.
Price reductions need to move into the next lower price point. Moving the property and turning the capital is what matters to them, not being right about the price they forecast three or four months ago.
Constantly test new market areas, new neighborhoods, slight changes in the rehab program you employ so that your response to market change will be in a newly profitable direction.
Enjoy the ride. Just like the carnival, no ride goes on forever.

Whether you are a current investor or considering enterring this super competitive field, I hope the foregoing observations can help you see a little more clearly how the best truly excel in this super fun area of real estate investing.

1 Comment

No High Rises In West Highlands- Why Is Everybody So Mad?

02-07-12

Betty Luce

view my blog
Office: (303) 477-7485

Mobile: (303) 478-8618

My husband George and I have lived near Highlands Square since 1990. We've witnessed the proliferation of wonderful shops, restaurants, stores and professional offices in the neighborhood. We've been here for the zoning controversies and for the bannishing of WalMart from the neighborhood. The North Denver tradition of feisty involvement is alive and well. It's been a source of inspiration, frustration and humor for many of us, I'm sure.

We are both Realtors with Nostalgic Homes, therefore we are constantly in touch with the housing concerns, both financial and esthetic, of our clients and neighbors. The well-being of these individuals and families is of utmost importance to us.

Our intent with this blog is to contribute to the neighborhood discussion, to share information that will be beneficial to established homeowners, buyers and sellers, and hopefully to entertain from time to time.

So, here goes the first one:

Newspapers and the blogosphere have been ablaze the past few months with the objections of neighbors to the proposed Red Peak Development, 160 units of rental properties in three 5-story buildings in the heart of Highlands Square. In my opinion, two issues central to the discussion have not been adequately aired in the midst of the uproar.

Issue #1: Fairness

Red Peak properties is leading the charge to develop the site. In fact, at this time Red Peak is not vested in ownership of the property, so their interest is speculative for the time being.

The “owner” of the land at issue, Tom Wooten, is not personally in title on the property. Mr. Wooten is the Senior Vice President of Newmark Knight Frank, a multinational New York-based firm that represents owners, tenants, investors and developers. Last year, NKF transactions were valued at more than $45 billion with annual revenues of over $993 million.

Mr. Wooten engineered the purchase of the sites in 2007, when it was an acknowledged fact that the Highlands neighborhood was a mish-mash of inappropriate zoning. The BluePrint Denver U-MS-2 (2 stories) designation for the business district was a matter of public record, as was the U-SU-A/B/C (single family) zoning for the residential streets in the area.

Mr. Wooten's investors paid a total of $6,563,800 for 53,680 SF of properties ($122/SF), according to public records. (For a basis of comparison, investors paid $1,100,000 for 12,600 SF ($87/SF) in 2008 for a parcel at 31st-32nd and Irving where appropriate development is taking place.)

Mr. Wooten was successful in convincing then-Councilman Rick Garcia and the Office of Planning that his rights as property owner should supersede BluePrint Denver’s designated zoning for Highlands Square. The decision to allow him main street — 5 story — zoning was discretionary and arbitrary.

This is a classic case of rationalizing the means to an end. The purchaser was aware that the zoning was slated to change to a category that would ultimately prohibit large-scale development The city fell into line with the notion that an inflated sales price was adequate justification for an outrageous zoning exception — main-street zoning — in an area of small businesses and single family homes.

Several bloggers have charged that the neighborhood association did not respond to this zoning exception in a timely manner. In fact, there was strenuous and well-documented objection. Neighborhood residents are angry because they’ve been betrayed by the very zoning process that promised to bring an end to neighborhood zoning disputes.

Factoid: Highlands residents have collectively invested more than $700 million in their properties, many paying a premium to be near Highlands Square. There are more than 2000 neighborhood residents’ signatures on the No High Rises for West Highlands petitions. The proposed Red Peak development will most certainly diminish the value of nearby homes. Do these homeowners not also have property rights? Why is the City protecting the investment of far-away institutional investors and ignoring the rights of the local property owners?

32nd & Lowell Highlands Houses

Issue #2: Individual Property Owners vs. the Corporate Presence in Highlands Square

The inherent charm of Highlands Square lies in the individuality expressed by business owners in their one-of-a-kind shops and the neighborhood of human-scale vintage homes that surrounds it. These shops and residences are the soul of Highlands. Their hard work and investment has resulted in the increased property values in the area.

Sure, there are exceptions. Chipotle is owned by McDonalds Corporation. But Chipotle has been a good corporate neighbor, donating money to the establishment of the Wolff Place Historic District. There is an 11-story senior residence owned by Beth Eden Baptist Church at 32^nd & Julian. In fact, there are many such charitable institutions scattered around the neighborhood, and most of their residents don’t own cars.

Beth Eden Bldg

The high quality of the restaurants and shops has brought many visitors to the neighborhood. Parking is at a premium. Most of the surrounding streets have strict limits on allowed parking time. Homeowners need a permit to park in front of their own homes. The availability of parking is an issue critical to the survival of the Highlands Square businesses.

So, enter Newmark Knight Frank with revenues of $993 million and Red Peak Development with a portfolio comprised of 2,054 rental units in the metro area. Enter 160 rental units in Highlands Square (potentially 320 human beings and their automobiles… and their friend’s automobiles?). Really?

View toward 32nd & Lowell Now Looking toward 32nd & Lowell with 5-story buildings

The development represents an essential shift in the character, the ownership profile and the priorities of the neighborhood. And the neighbors are heartsick and angry.

We welcome your questions and comments, and of course we're always happy to help you with any real estate needs.

For more information visit No High Rises in Highlands Facebook page.

2 Comments

2012 Colorado Garden & Home Show

02-07-12

Alex Tooke

view my blog
Office: (720) 515-7713

Colorado Garden & Home Show - Denver Colorado - MileHighHomeGuide The Colorado Garden & Home Show is back in town from February 11th through the 19th at the Colorado Convention Center in Downtown Denver. The Colorado Garden & Home Show is one of the best ways to find the latest trends and ideas in landscaping, gardening, and home improvement.

This year's show contains 14 professionally landscaped gardens spanning over an acre of space and representatives from over 600 companies with some of the top knowledge in gardening and home improvement.

Click here for an interactive floorplan map...

Find out more information on the Colorado Garden & Home Show website here.

Reposted From: DenverRealEstateBlog.net

Brought to You By: MileHighHomeGuide.com

1 Comment

They May Change the Game at the Last Minute. By Dan Polimino.

02-07-12

Daniel Polimino

view my blog
Office: (303) 893-3200

Mobile: (303) 522-1161

A house is listed with me and my business partner Gary Lohrman. It’s under contract; everything is moving along smoothly, we are past inspection, appraisal, and all the big contingencies. We are just a few days away from closing when the buyer’s agent calls to say that there is a problem. At the last minute, the lender has decided that 20% down is not going to be enough and they will not close the loan unless the buyer comes up with 30% down. Now mind you, these buyers have a pre-approval letter from the lender, have acted in good faith, and provided all documentation that the lender has asked for. They are well qualified with high credit scores and good jobs but without reason or cause, the underwriter decides to change the game at the last minute. Let’s take a look at the bind that everyone now finds himself or herself in:

• The Sellers are just a few days away from selling their home and moving on with their lives. Now they are faced with the possibility of having to put their home back on the market again to do it all over. Not to mention their property has been off the market with no showings for 30 days.

• The buyers have packed up their stuff, are ready to move, have paid for inspections and appraisal, plus additional out of pocket expense. They are also under contract and may be in jeopardy of losing their earnest money.

• The Realtors have done their job and worked hard for the last 30 days or more and are now faced with not getting paid.

The question is, “Why were these people qualified for this loan by the lender with 20% down (by the way 20% down is usually a safe bet and not a high risk loan) just 25 days ago and now a few days before closing, the lender wants 30% down?” The lender is holding everyone hostage with a game called “pay up or you won’t close.” The answer is that the underwriter who signs off on the file sees something they don’t like and they think that an extra 10% percent down will resolve the risk. Truth is, the extra 10% in no way diminishes the risk. This is an underwriter trying to protect his or her hide in the event that the loan defaults.

I wouldn’t be writing about this if it just happened once, but it happened three times, all in a span of 45 days in November and December. It happened on three different properties, with three different lenders and three different buyers/sellers. It could happen to you, so beware. To find if we resolved the issue and if these deals closed, email me at dan@coloradodreamhouse.com

Dan Polimino is an Owner/Broker with Keller Williams Realty DTC. He can be reached at dan@coloradodreamhouse.com and www.coloradodreamhouse.com/denverpost

Click here to Get started searching for YOUR Colorado Dream Home.

7 Comments

Denver's blizzard --- Some tips to stay SAFE!

02-03-12

Joan Cox, Denver Real Estate-720-231-6373

view my blog
Office: (303) 796-7000

Mobile: (720) 231-6373

Denver is experiencing the largest snowfall of the year (so far) and is a good day Snow shoveling to stay home if you are able. All school districts were closed today, and many businesses are closed.

Sad to say, our mountains that NEED this snowfall is not getting the benefit of this storm. However, there are many accidents all over town, and hope drivers have the essentials needed to make it home safely.

~ Water
~ Snacks
~ Blanket
~ Full tank of gas
~ Gloves, hat and warm clothing

This time of year if you get into a traffic jam, and unable to move for long periods of time, it is not uncommon for some to run out of gas. BE PREPARED!

Today is a day we are to wear RED for heart health, so if you have any heart conditions, find someone in your neighborhood to shovel or use the snow blower for you.

For those that have not seen snow, not experienced this beauty, I have done a short video to show you how beautiful and peaceful a snowfall can be!