Our New Homebuyers TOO LATE?
Clients NEED Vision.. a $175,000 Story
Buyers Need Vision
Cost to Buy
450,000 (Seller is entertaining all offers.. then the numbers get even better!)
Cost to Renovate (estimates)
- 10,000 landscaping
- 4,000 per egress times two
- 5,000 redo floors
- 10,000 each for 2 bathrooms – replace sinks, tub, toilet (keep tub in basement)
- Add 5th bedroom/office upstairs with pocket doors
- replace front door
- 1,000 per appliance – all replaced for two kitchens
- 7,500 to replace cabinets and counters – per kitchen
- repaint
- 75,000 estimated total
CMA Future Value
600,000 – See my picturesque listing description below for your fabulous new home…
Conventional Renovation Loan Purchase First Time Home Buyer
- 450,000 purchase price
- 75,000 renovations
- 10-15% contingency reserves (anything unused is applied to balance)
- 2,500 estimate renovation loan fees (up to 5 draws/inspections at 175, construction loan fee 1500, title fee per draw)
- 538,750 Total Cost
For renovation purchase transactions, loan-to-value (LTV) ratio is based on the lesser of: 1) purchase price and cost of renovation, or 2) the “as completed” appraised value.
Estimated Mortgage Payment
Assuming a 95% loan-to-value on 538,750 cost, including an estimate for escrows and mortgage insurance, and current market rates; the monthly mortgage payment is approximately 4,000/month
Rental Income Opportunity
Now here is where we need to get creative. Can you rent it out by the room at 800 a room? This is your highest income potential! You can rent out the whole house for 3,000 or rent out each unit separately as long-term rentals for approximately 3,800 total, both negative cash flow. So how about living downstairs and renting the upstairs as a mid-term rental or short-term rental. You could be living for free or at a greatly reduced cost, and when you move out rent out the downstairs long-term and the upstairs mid-term! All viable and all income producing.
Appreciation Story
Here’s what most people don’t consider when looking at the numbers. Yes, it needs to cash flow! I do not advocate buying a home that doesn’t cash flow day one. However, I will gladly break even and get both future cash flow (as rents increase, rates drop, and the mortgage insurance drops off) and appreciation. This home which cost a buyer 538,750 had immediate equity of just over 60,000. WOW! In five years at a 3.6% appreciation, that home is worth 716,000… giving the owner over 175,000 in NET WEALTH! BAM! Plus tax benefits, rental income, stability and security of owning real estate. I could go on and on.
I LOVE the power of real estate and right now, in this market we have to get more creative than ever to help our clients see the vision that we see. This isn’t a shell game nor a pipe dream. This is building multigenerational wealth. It’s changing the trajectory of lives. It’s providing a home for a young adult that will continue to get priced out of this market. This is the most important move we can make today.
Be a game changer for someone this weekend, and give me a call. Let’s put a plan into action and be partners in changing lives!
Your New Home 😉
“Discover the perfect blend of charm and modern convenience in this fully remodeled 1950s ranch brick home, nestled on a spacious 6,098 SqFt corner lot in the heart of Denver. This exquisite property now boasts 5 bedrooms and 2 bathrooms, including a sunroom and a dedicated office space, ideal for those who work from home.
The highlight of this stunning home is its versatile mother-in-law suite downstairs, complete with its own kitchen and bathroom. This space is perfect for short-term rental opportunities or as a private retreat for guests. The main level’s open-plan living seamlessly integrates the living, dining, and kitchen areas, making it ideal for entertaining or relaxing with family.
Every detail has been thoughtfully considered in the renovation, with high-quality finishes and fixtures throughout. The home features two fully equipped kitchens – one on each level – ensuring convenience and functionality for a variety of living arrangements.
Step outside to enjoy the privacy of a fully fenced yard, perfect for outdoor gatherings or a peaceful retreat. Additionally, the property includes a 2-car detached garage, providing ample storage and parking space.
Located in a prime central Denver location, this home is just blocks away from Ruby Hill Park and a mere 15-minute drive to downtown Denver. Enjoy easy access to major highways including I-25, Hwy 6, 85, and 285.
Don’t miss the opportunity to make this beautifully updated home yours, where modern amenities meet classic charm in an unbeatable location.”