Real Estate Advice

Why investment properties make so much cents!

How to succeed at real estate investment

I was fortunate enough to get into the real estate game early. Much earlier than becoming a broker. I had the good fortune of having Mike Jensen, the Ft Collins real estate mogul, as my roommate in college. Mike was in my ear a lot about investing in real estate. He encouraged me to secure a first-time home buyer loan through a local credit union. I had no credit so my father agreed to co-sign. I bought my first investment property in Fort Collins in 1995 with only $3600. 

This decision kicked off an incredible real estate education through the act of doing. I would like to share my lessons with you.

Lesson 1 - Other peoples monryThe purchase price for the Ft Collins Property was $120,000. The first-time homebuyer program allowed me to purchase the property with a 3% down payment. Therefore my investment came to $3,600 and I used $116,400 of the bank's money to get me into the game.

Investment property 1

I bought the Ft Collins Property to live in but quickly realized it would generate a great deal of cash flow (total rent - mortgage = cash flow). So, I moved out and it became my first investment property. I managed the property for a number of years then hired a management company.

When I graduated college my wife and I moved to Denver and decided to shift my investment...

12 Real Estate Terms that Shouldn’t Scare You

Real Estate TermsAre you confused by some of the terms popping up in your first attempt to buy or sell a home in Denver?

Don't worry, you're not alone. The real estate industry is filled with unique terminology that can trip up homebuyers, sellers, and even unseasoned agents.

Here are some quick definitions for the terms that you're most likely to encounter.

Appraisal -- It's the estimated value of a property

Certificate of Title -- The document that verifies the home is legally owned by the person claiming to own it

Closing Costs -- All of the expenses and fees associated with closing a home purchase. They can add up to as much as 4-6 percent of the cost of the home.

Contingencies -- Certain conditions that need to be met in order for a buyer's offer to be accepted and for things to proceed

Due Diligence -- Actions that the buyer should take to protect their real estate investment

Debt to Income Ratio -- To qualify for a loan, your monthly debt should add up to less than 43 percent of your monthly income.

Earnest Money Deposit -- A payment the buyer includes with their offer in order to prove serious interest to the seller.

Escrow -- An account where all closing costs are collected while the lender approves the deal.

FICO Score -- A numerical value assigned to a buyer based on their credit history.

Good Faith Deposit -- A payment made to the lender at the time of the offer to show serious interest.

HOA -- Homeowners associations (HOAs) are organizations that set and enforce rules and standards for properties within their community.

Prequalification -- the...

Tips for First-Time Homebuyers in Denver

How to buy a homeThinking about taking the big leap into the world of home ownership? It may be the biggest purchase you’ve made in your life so far, but that doesn’t mean it has to be a frightening experience.

If you’re prepared and you have the right assistance, buying your first home should be a thrilling and positive experience. To ensure that your initial foray into property purchasing is a success, follow the Neir Teams list of top tips for first-time homebuyers in Denver.

1. Find the Right Denver Real Estate Agent

If you haven’t already found a Denver real estate agent to work with, that should be your first move. Real estate professionals are especially valuable to first-time buyers who have never been through the process before. Their advice will be invaluable when prioritizing needs, budgeting, searching for a home and negotiating.

2. Know Your Finances

When it comes time to buy a home, you don’t want your finances to hold you back. It’s wise to verify your budget capabilities and your credit score before you even begin looking for homes. Saving and budgeting aren't just for your down payment. You’ll probably need to tighten your belt a little to account for the new mortgage payment you’re about to take on.

3. Be Realistic About Your Needs

You’ve probably been dreaming for years about finding that ideal home that meets your every need and desire. We’re not here to say you shouldn’t have everything you want in a home, but the realities of the market...

How do HOAs in Denver Work?

How do HOA'a workWhen you purchase a property in a planned development like a gated community, leased land property, or subdivision, you will be required to become a member of that community’s HOA (homeowners’ association). HOAs in Denver collect annual or monthly fees from members to pay for maintenance and upkeep of common areas.

If you’re thinking about buying a property that requires you to join an HOA in Denver, here’s what you need to know.

The Basics

HOA fees typically fall in the $200 to $400 per month range, but communities featuring a lot of upscale amenities will likely have fees in excess of $400. The more amenities, the higher the cost of membership.

One very important thing to understand up front is that regular monthly or annual fees do not cover all potential expenses. For instance, if a common building needs major roof repair work, the association may not have enough reserve funds to cover all of the costs. In this case, each member of the HOA would be charged an extra assessment to make up the difference.

Fees and extra assessments may seem like a potentially heavy financial burden, but they go a long way toward protecting the property values and maintaining a high quality of life for all members.

CC&Rs

HOAs don’t just exist to maintain common spaces and charge fees. They also set and enforce rules -- referred to as covenants, conditions, and restrictions (CC&Rs) -- that apply to all members. Rules may specify what color your front door should be, what types of pets are allowed, what type of landscaping you can do, and so on. If you can get the HOA...

Best Elementary Schools in the Denver Area

Every parent wants their child to attend the best schools throughout their academic career. The best way to ensure this is to live in proximity to schools that are known for having a great reputation. If you are planning to move to the Denver area and you have young children, learning which elementary schools are the best and where they are located should be a top priority.

School rankings can be highly subjective. Some parents want their children to attend schools that have excellent art and music programs, others are focused on finding a renowned special needs department. Check out The Neir Team’s guide on how to pick the best Denver school for your child to learn more about evaluating options.

When it comes to objectively ranking schools, test scores are often a key factor. Unfortunately, standardized testing is not always a perfect reflection of a schools overall quality. The website Chalkbeat uses several factors – re-enrollment rate, growth points, status points, poverty percentage and more – to come up with annual rankings for Denver schools. Here is the list of Denver elementary schools that received a “distinguished” School Performance Framework (SPF) rating in the most recent Chalkbeat rankings:

  • Asbury Elementary School
  • Bradley International School
  • Bromwell Elementary School
  • Carson Elementary School
  • Cory Elementary School
  • Lincoln Elementary School
  • McMeen Elementary School
  • Polaris at Ebert Elementary School
  • Steck Elementary School
  • University Park Elementary School

You can find links to more information about these and other schools on our complete list of ...

Tips to Hire the Best Denver Real Estate Agent

Seeing through all the hype is probably the hardest part of finding the best Denver real estate agent.

When it comes time to buy a new home or sell your old home, you need a qualified agent capable of backing up their claims. Anyone can say they are the best, so you need to do a little homework to ensure you wind up with a professional who has what it takes to help you reach your real estate goals.

By following a few tips below, you will be able to get the information you need to make a solid judgement on an agent’s ability to lead you to success in a real estate buying or selling.

Check for the Right Experience

It would be ideal to find an agent with experience that will increase their chances being successful with you. Ask them for examples of homes they have found or listed in your price range and location. If you have a home for sale and they have successfully sold a property in the same neighborhood for an equal or higher amount, they are likely to be a good candidate.

If your home has some unique features, ask about their past experience with those as well.

View Current Listings

To double check whether or not you have found the best Denver real estate agent to handle your price range and location, check the current listings on their website. Are there homes that you are interested in buying? Are there similar homes for sale in Denver? If yes, this is just one more signal that the agent has the experience needed to help you reach your real estate goals.

Speak with Previous Clients

Ask a prospective agent to supply you with a short list of clients they have worked...

Why hire a Denver realtor?

Why hire a realtor?One perception of hiring a realtor is that they are expensive.  Another thought, I can sell my house on my own, no problem. Realtors are professionals that will make sure your real estate transaction completed correctly, by law and with your best interest in mind.  Denver realtors also have access to the most up-to-date real estate systems and references, and techniques to ensure a quick and streamlined process.  Selling a house is much more than just putting a sign in your front yard, an ad in the local paper, and if you’re somewhat technologically savvy, putting it up on MLS

One thing is for sure if you sell your house “by owner”, the buyer knows that you are saving money by not paying a realtor for their expertise and will most likely negotiate accordingly.  You will be spending less money but also making less money too.  Negotiations are a critical component of the real estate transaction, and you will want an un-emotional third party involved to communicate your needs and leverage the facts.

Why hire a Denver realtor? Who’s going to show your house?  Do you realistically have enough time to do so?  Do you know what is involved in the long contract process and with all of the different contingences involved with the sale? Overall, selling a home can be very stressful and time consuming, and it can be much easier if you have someone to work with.  An established, experienced realtor.

Advantages to hiring a realtor...

Understanding Credit Scores – How it affects your real estate purchase power

How does your FICO affect your purchase powerRemember your credit score indicates your likeliness or willingness to pay and ultimately drives the cost of financing.

Here is how your credit score is calculated:

  • Payment History = 35%
    • Do you pay on time – the single most important factor
  • Amount Owed = 30%
    • Revolving accounts – Keep your credit accounts open and keep the balance below 30% of the credit limit.

These two factors account for 65% of your credit score.

  • Length of Credit History = 15%
    • Longer credit history is better
    • How long have your accounts been open – Keep long established credit lines open. If you must close an account, close the youngest accounts first.
    • How long since you last used them – Use your credit accounts once a quarter while keeping your balance less than 30% of the limit. 
  • New Credit = 10%
    • Short Term Credit Accounts – Opening several credit accounts for short periods of time increases credit risk.
  • Type of Credit in Use (Healthy Mix) = 10%
    • 2 Installment loans
    • 3 Revolving accounts with balances below 30% of the limit
    • No Collections
    • No Foreclosure
    • No Late Payments

There are numerous credit scoring models and for the purposes of this article we will focus on the FICO score. Your FICO score is the score that banks look at when determining your credit worthiness for mortgage borrowing the rate to borrow....

When Buying a Home, What is Earnest Money?

What is earnest MoneyIf you have ever purchased a home before, you are likely to be familiar with the term “earnest money”, but not its definition or purpose. So, what is earnest money? Sometimes, what it signifies, and what the amount means, can be a little vague. To make a long story short, the purpose of earnest money is to serve as a deposit on a home you want to buy, and to show the sellers your earnest intent on purchasing the house. It is an initial investment in the purchase of a home.

Typically, the seller specifies the minimum amount of earnest money required for the purchase of the home. When that happens, it makes the whole process easier. But other times, the buyer is required to offer an unspecified amount and this leaves many people with the looming question, “How much earnest money should I put down?” In reality, it depends on the strength of the market. A lot of home sellers will look at the earnest money amount and gauge the buyer’s financially stability. In a weak real estate market where buyers have all the power, sellers cannot be too picky and cannot read too much into the amount offered. In this case, $500-$1000 might be enough.

However, in a stronger market where sellers are receiving dozens of offers, a buyer wants to extend extra-earnest in order to ease any seller worries. While 1% of the purchase price is usually enough, if you have your heart set on a certain property, offering upwards of 2-3% can help tilt the scale in your favor.

No matter the amount offered, many buyers still come back to the looming question of what is earnest money and what happens to it. Like most deposits, the money will go towards the final down payment and closing costs. If, for some reason, the contract on the house falls through,...

Aggregator Websites: Are they accurate for Denver home values?

Aggregator real estate sitesWebsites like Trulia and Zillow are great real estate resources for a variety of reasons. Both buyers and renters can easily filter through numerous homes and try to pinpoint the one that might be the best fit for them. They allow them a more active way of staying on top of their home search. These sites are also a great resource for sellers, as it allows more exposure for their property and availability to a wider audience. However, these websites like to post their version of information for a home’s Denver home value, and frankly, it is usually an inaccurate home valuation.

If you have ever searched for your home on Zillow, it will give you a rather general number as to what your home worth. Rarely, that number is a pleasant surprise. Overall, these numbers are gross generalizations and can be looked at as more of a marketing tool than an actual, solid figure. That number is designed to draw casual consumers in, sign up for these websites’ services, and begin using the other features Trulia or Zillow offer. It is a business model that works for these sites, but as a consumer, it helps to know the truth.

Zillow Home Price?In order to avoid an inaccurate home valuation, Denver home value should be calculated by professionals. Realtors are experts in the home worth game and are the most reliable source to get a number as to your home’s real worth. They also have access to multiple...