30 min
Deal Analysis – Single Family Pop Top and Basement Apartment Build in Denver Denver Investment Real Estate
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- Inversiones
Two Learning Options! * Listen to the podcast "#256: Deal Analysis - Single Family Pop Top and Basement Apartment Build in Denver" on the Denver Real Estate Investing Podcast* Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast.
Investor Profile
* Kevin & Mycah* Long term Buy & Hold* House Hackers and a bit nomad
Deal Quadrant: MLS
The majority of Nomad and House Hacks are found on the MLS
Read about the deal quadrant and finding Denver Rental Properties.
Investment Property Details
* Type: single family home with separate basement entrance gutted/not habitable* Location: West Highlands* List: $599,000* Purchase: $575,000* *Home sold in July of 2018 via Wholesaler at $599,000. Investors gutted it, and it sat for 6 months before they listed it at $625,000, dropped to $599,000 and we went under contract at $575,000.
Why:
* Location! Proximity to other property, work etc* Upside with Airbnb or in-law space* Fit our Nomad/house hack strategy
Property Contract Details
* Finding the Property: We were in the area in the Sloan's Lake neighborhood 1 mi away. Liked the proximity. Kept coming back to it late-night home dreaming, and it was bigger and more money but we were hopped up on real estate investing and were able to take it down with the help of Chris & Preston with a construction loan.* Under Contract: Below list even though they were upside down* Inspection items:* All of the things: Asbestos, sewer/waterline* Negotiation Outcome: They didn’t have much room and made that clear but we got $5,000!
Property Financing Details
* Lender: Regional bank* Loan Type: Construction loan 6.15%! 20% down* Appraisal: below- construction appraisal* Seller Concessions: $5,000* PMI: No* Interest Rate Buy Down?: No
Construction
* Pop top: 6 bed, 3.5 bath, 3373 Sqft, Detached 2 car garage* Upper unit: 4 bed, 2.5 ba* Lower unit: 2 bed 1 ba
* 15 months * Planning & Permits: 7 months* Construction: 8 months
* Budget: $200,000 (ha!)- blew it by 40%. Lesson Learned: Realized that we should shoot higher for the after repair value (ARV) and added garage, patio, sod, finished attic space.
* All in Construction $350,000 total ($140,000 financed/$210,000 line of credit)* $20,000 architectural plans, designers, permits, structural, mechanical* $10,000 site prep, maintenance disposal: Dumpster, Asbestos, porta-potty* $36,000 in holding cost (interest only)
Re-Fi Overview: Rate & Term Refinance in September
1st Mortgage: Conventional with National Lender
* Loan amount $575,000 * Rate: 2.875%* Loan cost: $3877* Term: 30* PITI: $2804.65
2nd Mortgage: HELOC Local Bank
* Line amount: $275,000 (drew down $100,000 to consolidate debt)* Variable Rate: prime or min of 4% * Loan cost: $754* Term: 10 year interest only, balloon * Payment: $333 interest only or $866 p&i
Combined payment for 1st and 2nd $3137 - $3670
Proforma
* Project AirBnB gross $3150/month,
Two Learning Options! * Listen to the podcast "#256: Deal Analysis - Single Family Pop Top and Basement Apartment Build in Denver" on the Denver Real Estate Investing Podcast* Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast.
Investor Profile
* Kevin & Mycah* Long term Buy & Hold* House Hackers and a bit nomad
Deal Quadrant: MLS
The majority of Nomad and House Hacks are found on the MLS
Read about the deal quadrant and finding Denver Rental Properties.
Investment Property Details
* Type: single family home with separate basement entrance gutted/not habitable* Location: West Highlands* List: $599,000* Purchase: $575,000* *Home sold in July of 2018 via Wholesaler at $599,000. Investors gutted it, and it sat for 6 months before they listed it at $625,000, dropped to $599,000 and we went under contract at $575,000.
Why:
* Location! Proximity to other property, work etc* Upside with Airbnb or in-law space* Fit our Nomad/house hack strategy
Property Contract Details
* Finding the Property: We were in the area in the Sloan's Lake neighborhood 1 mi away. Liked the proximity. Kept coming back to it late-night home dreaming, and it was bigger and more money but we were hopped up on real estate investing and were able to take it down with the help of Chris & Preston with a construction loan.* Under Contract: Below list even though they were upside down* Inspection items:* All of the things: Asbestos, sewer/waterline* Negotiation Outcome: They didn’t have much room and made that clear but we got $5,000!
Property Financing Details
* Lender: Regional bank* Loan Type: Construction loan 6.15%! 20% down* Appraisal: below- construction appraisal* Seller Concessions: $5,000* PMI: No* Interest Rate Buy Down?: No
Construction
* Pop top: 6 bed, 3.5 bath, 3373 Sqft, Detached 2 car garage* Upper unit: 4 bed, 2.5 ba* Lower unit: 2 bed 1 ba
* 15 months * Planning & Permits: 7 months* Construction: 8 months
* Budget: $200,000 (ha!)- blew it by 40%. Lesson Learned: Realized that we should shoot higher for the after repair value (ARV) and added garage, patio, sod, finished attic space.
* All in Construction $350,000 total ($140,000 financed/$210,000 line of credit)* $20,000 architectural plans, designers, permits, structural, mechanical* $10,000 site prep, maintenance disposal: Dumpster, Asbestos, porta-potty* $36,000 in holding cost (interest only)
Re-Fi Overview: Rate & Term Refinance in September
1st Mortgage: Conventional with National Lender
* Loan amount $575,000 * Rate: 2.875%* Loan cost: $3877* Term: 30* PITI: $2804.65
2nd Mortgage: HELOC Local Bank
* Line amount: $275,000 (drew down $100,000 to consolidate debt)* Variable Rate: prime or min of 4% * Loan cost: $754* Term: 10 year interest only, balloon * Payment: $333 interest only or $866 p&i
Combined payment for 1st and 2nd $3137 - $3670
Proforma
* Project AirBnB gross $3150/month,
30 min