• Login
    • Register

Living Room Real EstateLiving Room Real Estate

Denver Residential Real Estate

  • Menu
  • About Living Room
  • Buy
  • Sell
  • Blog
  • ADUs
  • Giving Back
  • Contact Us

The Real Cost of a HOA

The Sales Price Can Be Deceiving

Most buyers looking for an affordable home in Denver will naturally gravitate towards condos that seem more affordable when you just look at the purchase price. The monthly expense of an HOA can really add up, so make sure you consider the alternative of a single family home or townhouse that does not have an HOA. Also, ask yourself if the cost of the monthly HOA aligns with the services provided. Would you pay someone $250/m to shovel your snow? I recommend setting up two separate searches. Most HOAs in Denver are a minimum of $250/M which equals $50K in purchasing power. Set your max price for the condo search at least $50K lower than the price for a home that does not have an HOA.

Example

You are searching for a 3 bed/3 bath in Congress Park and your budget is $650K. You would like to keep your mortgage under $3,500 per month. Although the condo is listed for $99K less than the townhouse the difference in your monthly mortgage payment is negligible at only $155. They are within two blocks and both are 1700 sq ft. So which do you prefer if the price is basically the same?

Condo: $520K with HOA $502/M = Mortgage Payment w/ 20% down = $3151
Parking: 1 reserve spot
Outdoor space: Private deck and shared rooftop deck
HOA covers: Common Area Grounds Maintenance, Covered Parking, Exterior Maintenance w/ Roof, Insurance, Sewer, Snow Removal, Trash Removal, Water

Townhouse: $619K with NO HOA = Mortgage Payment w/ 20% down = $3266
Parking: 2 car detached garage
Outdoors space: Front porch, two decks, small fenced backyard
Party wall agreement with neighboring unit, insurance will be a little more expensive, and you will be responsible for mowing and shoveling snow.

Posted in: Blog, Insider Information

Is wholesaling wise or wack?

The real estate industry is very complex and there are many ways to buy ​a ​house. Recently I have been doing research on “wholesaling”. Wholesaling is a term used in the real estate industry to describe the process of finding great real estate deals and getting paid to bring them to real estate investors.

In the Denver market​,​ wholesalers have large teams working to try to find off market​ deals​ through their networks, mailings, etc. They also use the MLS​, where they ​buy​ ​about 50% of their inventory.  When they find a deal with a little bit of margin they quickly see the house​, ​write an offer and get the property under contract. Once the property is under contract they immediately open it up to a pool of investors, acting as a middle man. They benefit by taking the 2.8% commission​ offered on the MLS​ and usually increase the list price $3,000 to $10,000.  Within a few hours or days they have found an​ investor ​who will pay cash​ and do a double escrow closing the same day they are scheduled to close with the original seller.

Real life example:

Property near DU went on the MLS at 9am. By 9:15 wholesale team has a showing and has spoken with the seller. They submit a full price, $384,050 cash as soon as they finish the showing by 10am. They agree to buy the property “as is” and their only contingency is Title with a two week closing. They give the seller one hour to accept. They also sweeten the terms by paying for title and use a company that allows double escrow closings (most title companies do not allow this). The listing agent is representing her family in the sale of her late mother’s home and has no idea that the buyer is really a middle man who is actually just reselling the property to a higher bidder. That evening, a large wholesale team has put together a packet which includes comps, update costs, and an After Repair Value (ARV) estimates which they conclude is $530K by converting the attached one car into a master suite and updating the kitchen and bathroom. Each wholesale team member emails the packet to his/her database of investors. The next day they parade investors through the home (without permission from the seller) until they find an investor to purchase it for $389,500.  They will make $5,500 above the asking price they paid and take the commission of $10,752 equalling a profit of $16,252. The deal closes in two weeks and usually the buyer uses Hard Money to finance the purchase which is also available through the wholesale company. In this particular example, the cost of the hard money is 2.5% upfront ($11K) and 12% per month ($5K). If the rehab takes 6 months, the loan will cost the investor $41K. The wholesale company estimates the cost of the rehab is $55K. This property will be back on the market in a few months and probably sell for around $530K to a home buyer.

Conclusion

Investors prefer to focus on the construction projects and wholesale companies provide a benefit by identifying these properties, getting them under contract, doing the research on comps and ARV, and providing hard money. For a regular homebuyer and real estate agent, it is very difficult to compete against wholesale companies for the same properties. Luckily, they are usually buying the type of properties most buyers would not consider purchasing as a primary residence.

In the Denver market,  buyers are faced with three major challenges: 1) the market moves very quickly, 2) they end up competing against multiple offers, and 3) buyers face off against cash offers. After gaining understanding about how this process works, it is difficult not to point the finger at these wholesale companies and blame them for the escalating prices and difficult conditions buyers face. Wholesalers have figured out the game and homeowners with the right agent and knowledge can benefit from understanding their techniques. When you purchase a home that has been flipped, you are potentially taking on the cost of the wholesaler and investor, they are passed onto you and easier to stomach when you have access to a 30 year loan.

I’ve got an idea!

Let’s play out a different scenario. A homeowner sees the same house on the MLS. They can’t get there immediately, and end up competing against multiple offers and it gets bid up to $400,000. They hire a contractor and pick the exact finishes they like for the home and invest $55K into the property. Rehab loans are a good option for this type of project. After a six month project, they end up with a home they love for $455,000 and have almost $100K in equity.

Disclosure: Managing a large project like this is risky and very time consuming. It’s not a good fit for everyone. Investors have years of knowledge, lots of capital, and strong relationships that make these project less expensive and easier. Now you know! Please let me know if you have any additional questions.

Posted in: Insider Information

Are you composting?

Did you know about 40% of our food is wasted? Composting returns valuable nutrients back to the soil. The City of Denver’s composting program has been steadily increasing since the pilot program in 2014. You can compost too! The city charges $29.95/ per quarter to pickup compost or you can do it yourself and create a rich fertilizer in your own backyard.

Posted in: Homeowner Tips

5280 says “Deal With It”

I’ve been patiently awaiting my May issue of 5280 Magazine because they always do a big feature on real estate this month. Last year, their reporting blew me away and I have every new client read the article before I even meet with them. The gist of the story this year is “… desperate protagonists resigning themselves to paying more than expected for a house that – because it’s smaller, or in a dicier zip code, or less quaint than the house they envisioned  – definitely isn’t the home of their dreams.” It dawns on me, this frustrating market is all I know. I’m now a professional at helping people find that compromise, boost their budget by considering a roommate and looking at the tax benefits that they will see in April. It’s not all as desperate as they make it out to be. I’m overjoyed as I see those dicier neighborhoods revitalized. A smaller house can be a blessing if it means you can live a simpler life with less stuff and spend more of your time enjoying camping and hiking. The big benefit that I’m finally starting to experience – my clients who bought 2-4 years ago are now starting to sell. While they have been out camping, getting married, and enjoying all the new restaurants in Denver, their homes have appreciated significantly; giving them a leg up on their counterparts who have been renting. Definitely take the time to read “The House that Love Built” in this year’s issues. It taught me a term “wabi sabi” the art of embracing imperfection. Like the author, I see my clients fall in love with their home and all it’s imperfections after fighting hard for the honor of owning a place they can call their own.

Posted in: Denver News & Community Updates

Posts navigation

  • « Previous Page
  • 1
  • …
  • 10
  • 11
  • 12

Blog

SITE NAVIGATION

  • About Living Room
  • Buy
  • Sell
  • Blog
  • ADUs
  • Giving Back
  • Contact Us

Featured Properties

365 Irving Street $410,000

365 Irving Street Denver, Colorado

3 Beds 2 Baths 1,664 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of 8z Real Estate

1487 W Cedar Avenue $445,000

1487 W Cedar Avenue Denver, Colorado

3 Beds 2 Baths 1,031 Sq Ft 0.110 Acres

Sale Type: Active Listing courtesy of inMotion Group Properties

897 Yates Street $459,000

897 Yates Street Denver, Colorado

5 Beds 2 Baths 2,088 Sq Ft 0.160 Acres

Sale Type: Active Listing courtesy of Brokers Guild Homes

131 Wolff Street $463,999

131 Wolff Street Denver, Colorado

3 Beds 2 Baths 1,144 Sq Ft 0.130 Acres

Sale Type: Active Listing courtesy of Compass - Denver

835 Knox Court $465,000

835 Knox Court Denver, Colorado

3 Beds 2 Baths 1,125 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of KELLER WILLIAMS AVENUES REALTY

1236 S Osceola Street $465,500

1236 S Osceola Street Denver, Colorado

3 Beds 2 Baths 1,506 Sq Ft 0.170 Acres

Sale Type: Active Listing courtesy of COLORADO REALTY & PM INC

4825 W Custer Place $469,900

4825 W Custer Place Denver, Colorado

4 Beds 2 Baths 1,664 Sq Ft 0.170 Acres

Sale Type: Active Listing courtesy of Engel & Volkers Denver

5 S Jay Street $479,900

5 S Jay Street Lakewood, Colorado

3 Beds 2 Baths 1,972 Sq Ft 0.240 Acres

Sale Type: Active Listing courtesy of BA Group Advisors

2080 S Sheridan Boulevard $480,000

2080 S Sheridan Boulevard Denver, Colorado

4 Beds 2 Baths 1,728 Sq Ft 0.170 Acres

Sale Type: Active Listing courtesy of Keller Williams Realty LLC

4504 W Gill Place $489,900

4504 W Gill Place Denver, Colorado

3 Beds 2 Baths 1,448 Sq Ft 0.110 Acres

Sale Type: Active Listing courtesy of Brokers Guild Real Estate

643 Tennyson Street $495,000

643 Tennyson Street Denver, Colorado

3 Beds 2 Baths 1,271 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of Fathom Realty Colorado LLC

311 S Leyden Street $495,000

311 S Leyden Street Denver, Colorado

3 Beds 2 Baths 1,628 Sq Ft 0.160 Acres

Sale Type: Active Listing courtesy of Guardian Real Estate Group

7248 W Cedar Circle $499,000

7248 W Cedar Circle Lakewood, Colorado

3 Beds 4 Baths 2,698 Sq Ft 0.090 Acres

Sale Type: Active Listing courtesy of Brokers Guild Real Estate

1516 W Dakota Avenue $499,999

1516 W Dakota Avenue Denver, Colorado

4 Beds 2 Baths 1,701 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of HomeSmart

1590 S Perry Street $500,000

1590 S Perry Street Denver, Colorado

5 Beds 4 Baths 2,416 Sq Ft 0.170 Acres

Sale Type: Active Listing courtesy of Keller Williams DTC

2303 S Raleigh Street $510,000

2303 S Raleigh Street Denver, Colorado

5 Beds 3 Baths 2,150 Sq Ft 0.180 Acres

Sale Type: Active Listing courtesy of Re/Max Full House Inc.

8001 W 20th Avenue $514,900

8001 W 20th Avenue Lakewood, Colorado

3 Beds 2 Baths 1,490 Sq Ft 0.370 Acres

Sale Type: Active Listing courtesy of RE/MAX ALLIANCE

5315 W 5th Avenue $515,000

5315 W 5th Avenue Lakewood, Colorado

4 Beds 2 Baths 1,732 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of Real Broker LLC

842 S Quitman Street $519,000

842 S Quitman Street Denver, Colorado

3 Beds 2 Baths 1,024 Sq Ft 0.120 Acres

Sale Type: Active Listing courtesy of Vente Realty

1948 S Winona Court $520,000

1948 S Winona Court Denver, Colorado

3 Beds 2 Baths 1,351 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of Colorado Realty Resource

1345 S Lamar Street $525,000

1345 S Lamar Street Lakewood, Colorado

4 Beds 3 Baths 2,476 Sq Ft 0.190 Acres

Sale Type: Active Listing courtesy of ROCKY MOUNTAIN REAL ESTATE INC

1591 S Chase Street $525,000

1591 S Chase Street Lakewood, Colorado

4 Beds 2 Baths 1,988 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of LIV Sotheby's International Realty

400 Sheridan Boulevard $525,000

400 Sheridan Boulevard Lakewood, Colorado

3 Beds 2 Baths 1,219 Sq Ft 0.190 Acres

Sale Type: Active Listing courtesy of Professional Brokers Group

2024 S Xavier Street $525,000

2024 S Xavier Street Denver, Colorado

4 Beds 2 Baths 2,505 Sq Ft 0.160 Acres

Sale Type: Active Listing courtesy of eXp Realty, LLC

4870 Tejon Street $535,000

4870 Tejon Street Denver, Colorado

4 Beds 3 Baths 1,823 Sq Ft 0.130 Acres

Sale Type: Active Listing courtesy of Paisano Realty, Inc.

218 Irving Street $546,331

218 Irving Street Denver, Colorado

5 Beds 3 Baths 1,866 Sq Ft 0.220 Acres

Sale Type: Active Listing courtesy of Malman Commercial Real Estate LLC

1581 S Ames Street $549,000

1581 S Ames Street Lakewood, Colorado

5 Beds 3 Baths 2,158 Sq Ft 0.160 Acres

Sale Type: Active Listing courtesy of A+ LIFE'S AGENCY

4854 N Lincoln Street $549,900

4854 N Lincoln Street Denver, Colorado

3 Beds 2 Baths 1,674 Sq Ft 0.220 Acres

Sale Type: Active Listing courtesy of MITCHELL REALTY SERVICES

3050 CHERRY $549,900

3050 CHERRY Denver, Colorado

4 Beds 2 Baths 2,252 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of eXp Realty, LLC

1155 S Eaton Court $550,000

1155 S Eaton Court Lakewood, Colorado

5 Beds 2 Baths 2,332 Sq Ft 0.160 Acres

Sale Type: Active Listing courtesy of RE/MAX Professionals

3838 W 1st Avenue $550,000

3838 W 1st Avenue Denver, Colorado

4 Beds 2 Baths 1,248 Sq Ft 0.180 Acres

Sale Type: Active Listing courtesy of M I SOLUTIONS

27 Alcott Street $550,000

27 Alcott Street Denver, Colorado

3 Beds 2 Baths 1,462 Sq Ft 0.160 Acres

Sale Type: Active Listing courtesy of Wedgewood Homes Realty

1317 W Gill Place $559,000

1317 W Gill Place Denver, Colorado

4 Beds 2 Baths 1,214 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of Megastar Realty

1401 S Osage Street $560,000

1401 S Osage Street Denver, Colorado

3 Beds 2 Baths 2,124 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of Your Castle Realty LLC

2769 S Julian Street $569,000

2769 S Julian Street Denver, Colorado

3 Beds 2 Baths 1,008 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of JPAR Modern Real Estate

3745 N Fillmore Street $569,900

3745 N Fillmore Street Denver, Colorado

2 Beds 2 Baths 1,238 Sq Ft 0.070 Acres

Sale Type: Active Listing courtesy of Market Place Realty

271 S Grant Street $570,000

271 S Grant Street Denver, Colorado

3 Beds 3 Baths 2,794 Sq Ft 0.100 Acres

Sale Type: Active Listing courtesy of KENTWOOD REAL ESTATE DTC, LLC

1990 S Stuart Street $574,900

1990 S Stuart Street Denver, Colorado

5 Beds 3 Baths 2,154 Sq Ft 0.170 Acres

Sale Type: Active Listing courtesy of RE/MAX NORTHWEST INC

617 W 5th Avenue $575,000

617 W 5th Avenue Denver, Colorado

3 Beds 2 Baths 1,220 Sq Ft 0.030 Acres

Sale Type: Active Listing courtesy of HomeSmart

2043 W 52nd Place $599,000

2043 W 52nd Place Denver, Colorado

4 Beds 2 Baths 1,850 Sq Ft 0.230 Acres

Sale Type: Active Listing courtesy of Compass - Denver

4418 Utica Street $600,000

4418 Utica Street Denver, Colorado

2 Beds 2 Baths 1,312 Sq Ft 0.070 Acres

Sale Type: Active Listing courtesy of RE/MAX of Cherry Creek

4319 E Bails Place $615,000

4319 E Bails Place Denver, Colorado

3 Beds 2 Baths 1,972 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of RE/MAX Synergy

1857 S Winona Court $624,950

1857 S Winona Court Denver, Colorado

6 Beds 2 Baths 2,032 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of RE/MAX Masters Millennium

3665 Elm Street $630,000

3665 Elm Street Denver, Colorado

6 Beds 3 Baths 2,184 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of Keller Williams Realty LLC

3458 W Ohio Avenue $640,000

3458 W Ohio Avenue Denver, Colorado

5 Beds 3 Baths 2,656 Sq Ft 0.190 Acres

Sale Type: Active Listing courtesy of Hien Gia Nguyen

2668 S Quitman Street $645,000

2668 S Quitman Street Denver, Colorado

3 Beds 3 Baths 1,700 Sq Ft 0.160 Acres

Sale Type: Active Listing courtesy of 3GEN Real Estate

1295 S Glencoe Street $645,000

1295 S Glencoe Street Denver, Colorado

3 Beds 2 Baths 1,505 Sq Ft 0.170 Acres

Sale Type: Active Listing courtesy of HomeSmart Realty

5473 Shoshone Street $649,000

5473 Shoshone Street Denver, Colorado

5 Beds 3 Baths 2,208 Sq Ft 0.180 Acres

Sale Type: Active Listing courtesy of Vente Realty

622 Elati Street $650,000

622 Elati Street Denver, Colorado

2 Beds 2 Baths 1,634 Sq Ft 0.070 Acres

Sale Type: Active Listing courtesy of HomeSmart

3712 Monroe Street $650,000

3712 Monroe Street Denver, Colorado

3 Beds 3 Baths 1,477 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of HomeSmart

Property Search

Advanced Search Map Search

Recent Comments

  • Brandon on ADU Guide / How to find a property zoned for an ADU in Denver
  • Hollis J Pirkey on ADU Guide / How to find a property zoned for an ADU in Denver

Social Media Icons

Visit Us On InstagramVisit Us On FacebookVisit Us On YoutubeVisit Us On LinkedinCheck Our Feed

Buying or Selling in Denver?

https://livingroomdenver.com/wp-content/uploads/2021/06/06-28-living-room_v2.mp4

Our Mission

We pair people with the right place for a prosperous life.

Contact Us

4045 N Pecos St, Denver, CO 80211
303-720-8491
Visit Us On InstagramVisit Us On FacebookVisit Us On YoutubeVisit Us On LinkedinCheck Our Feed
© 2023 · Equity Framework
Privacy Policy · Listings Sitemap · Log in