Clients NEED Vision.. a $175,000 Story

Buyers Need Vision

I am charged up this morning, excited by the opportunity just within reach of so many buyers. Investors are circling and for good reason. Check out this 175,000 story…

With today’s home high prices and high interest rates, buyers are telling us with their actions they do not want to buy a home which is not move in ready. Yet, there are listings sitting and steaming with potential. This morning, I want to throw out a “not so new” idea, but a timely one. Having talked to a number of agents already this weekend; what if we started painting a vision for our buyers and our sellers so powerful, so enticing, it sells itself.

I got permission from the amazing Leigh Flanagan with LIV Sotheby’s International Realty to highlight her listing at 1805 S Bryant Street. This home is very very similar to 3 of the 4 homes my kids have bought in the past 4 years. So knowing the home and the cost to repair, I wanted to give you a vision of what can be done for your listing or your buyers to help motivate them in this market. Because once rates start dropping, values will continue to increase and opportunities available today will multiply into equity tomorrow.

Below are broad stroke costs to renovate the home, Leigh’s estimated CMA value of this home once remodeled, estimated rents, and the cost to procure a renovation loan. This is gold. Guys, seriously.. this season takes creativity and I’m in this with you!

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.”

Eric C Devis

Eric C Devis

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