Work on 74-acre Broomfield Business Center Begins!

Etkin Johnson has started the first phase of development of Broomfield Business Center, a 74-acre mixed-use project northeast of FlatIron Crossing mall.  The initial components include a luxury apartment community and a 4½-acre park.  The $80 million first phase also will see construction of infrastructure for the remaining 51 acres.  The remainder of the project will include restaurants, banks, retail, single and multistory office/flex, structured and surface parking and a hotel.  It all is projected to be completed in five years.  When complete, the community will total more than 1.5 million square feet. 

"Broomfield Business Center is another perfect example of foresight by the leaders of Broomfield," said Tim Wiens, whose Arista development across U.S. 36 is booming. "We've worked long and hard, individually and together, to create infrastructure for transit stops and everything Arista is.

"Now, work is happening on the other side of U.S. 36 to continue that. It's just terrific."

Broomfield already is home to such corporations as Ball Aerospace, Level 3 Communications, Oracle and Vail Resorts.

"I've lived in Broomfield since 1981," said Broomfield Mayor Pat Quinn. "We were just a bedroom community, but that's changing."

Young Buyers Feel Smart About Home Ownership

More than three-quarters of Americans who fall within Generations X and Y believe they have become increasingly knowledgeable about home ownership due to the greater media coverage on the real estate market the past six years, according to a Better Homes and Gardens Real Estate survey of about 1,000 18-35 year olds.

These two generations say that before buying they’d do their homework first, researching interest rates, home prices in a desired neighborhood, and the ability to secure a loan. Despite the past housing crisis, these generations say they are not deterred from home buying, and 75 percent say that home ownership is a key indicator of success.

They also know that paying their own mortgage is actually cheaper than renting in most markets, and overall a much better investment than paying someone else's mortgage.

Generations X and Y, which boast 103 million of the population, are viewed as major drivers of the economy for the next 30 years. 

Among some of the survey’s findings about Generation X and Y’s perceptions on home ownership is: 

• 71% of Gen X and Gen Y surveyed say that home ownership is not something they deserve but rather something you must earn, and they say they’re willing to sacrifice in order to be able to buy a home one day. Sixty-two percent say they would save by eating out less, 40 percent are willing to take a second job, and 23 percent would move back home with their parents. 
• 75% say owning a nice home is an indicator of success over taking fancy vacations, owning an expensive car, or owning designer clothing. 
• 61% say they’ll be ready to buy when they’ve landed a secure job. 

"Every generation faces defining economic events that alter their collective perspective," says Sherry Chris, president and CEO of Better Homes and Gardens Real Estate LLC. "'The Greatest Generation' was shaped by the Great Depression and Baby Boomers were impacted by the oil crises throughout the 1970s. Gen X and Gen Y experienced their 'coming of age' moment during the largest housing market downturn in American history. As such, these generations believe that the details, risks and rewards of home buying are integral to their planning.” 

Denver 12th Most Affordable City, Much Higher in Desirability

According to the Denver Post, Denver ranked 12th of the 25 largest cities in the country in affordability. 

The median household income in the Denver area exceeds the income required to purchase a median-priced home in the Denver area by four percent, according to the report.

The top five most affordable areas are Detroit, Atlanta, Minneapolis, Phoenix and St. Louis. The least affordable are Los Angeles, Miami, San Diego, New York and San Francisco.

What is more interesting is that in terms of desirability, Denver is much higher than most all of the cities ranked more affordable. Having been on scores of Top Ten lists throughout the last few years, including most popular city for relocating young adults, Denver has the extremely rare combination of both desirability and affordability.

Thank God we live in Denver! 

Home Loan Applications Soar

It's not surprising that mortgage applications for purchases rose to their highest levels since June last week, as mortgage rates hovered at record lows, the Mortgage Bankers Association reports. 

Loan requests for home purchases, viewed as a leading indicator of future home sales, increased 2.4% for the week ending Oct. 5.  

However, the overall index — which includes applications for refinancing and home purchases — was down slightly for the week, falling 1.2% last week, MBA reported. Applications for refinancing make up the biggest bulk of the index. 

Taken alone, applications for refinancing dropped 2% last week, but still remain at a three-year high in volume, says Mike Fratantoni, MBA’s vice president of research and economics. 

The 8 Big Investing Mistakes You Need to Avoid

If you've ever invested in real estate, you probably know some of these mistakes too well. If not, learn from ours! 

1) Buying In Spite of Horrible Neighbors

If the house next door has a house with a boat sinking in the front yard, rusty old car piled up on cinder blocks, an old camper from Woodstock with extension cords running to it and the lawn hasn’t been mowed or cared for since the Reagan administration…think again about your decision to buy.

No matter how much you fix up a house, you cannot change the neighborhood. The neighborhood will play a large role into the buyer’s decision whether to buy or not buy. When investing in real estate, always think ahead to the sale. Think “what would a buyer see that would detract them from buying this house?”

If the predominant answer you get is the next door neighbor, then move on. There are other flips in the sea . . . 

2) Hiring Your Friends

This is always a recipe for disaster. Although I do hire family members (they are in the legitimate trades after all), hiring a down and out friend to paint or roof or do any other subcontracting work on your project is usually a recipe for disaster, leading to wasted time and cost overruns. In many cases, you’ll end up doing the work yourself anyway.

Bottom line, if you hire your “friend” to work for you on a real estate project, chances are pretty good, he won’t be your friend when the project is done.

3) Buying Houses With Title Issues

This is especially true if you are new to real estate investing. Many guys I know make millions buying these kinds of problematic properties. So don’t get me wrong,  there is opportunity here, but only if you know what you’re doing.

Whatever you do, don’t buy a house with a title issue if you are new to real estate investing. Unless you either have lots of money or a real good understanding of title and title law, stay away because it could take years and lots of money to fix.

To avoid these mistakes, have a solid plan laid out with your attorney. But only if you feel confident you can go forward with it.

If you do venture down this road, have a solid plan with minimal loss to simply walk away if the costs run you too high. Better yet, if you’re new, don’t bother and aim for properties with clean title.

4) Hiring Contractors Based on “Trust Me”

This is a painful one. Too much personal experience here, especially in the early days.

I’m trusting by nature, but when it comes to general contractors, beware of the contractor who says“trust me I’ll take care of you”. When you hear those not so magic words, kindly show him the door.

This is especially true if they are reluctant to give you any kind of plan, estimate or time frame for the rehab completion.

Even more importantly, make sure they are licensed, insured and you get everything in writing prior to him setting foot into your property. Lastly, make sure you have an agreement of terms – what he will do for you and exactly by what time and date he will complete it.

Some contractors are notorious for “flying by the seat of their pants.” Don’t fall for it. Get it all in writing.

5) Not Sticking to Your Numbers

Way too common of a mistake here. Aren’t we all guilty of this one?

This is what we call “eraser math” and unfortunately it rarely works out in your favor. If you are about to buy a house and the rehab numbers, the comps, the ARV, the 70% rule don’t quite match up – don’t make the mistake that far too many real estate investors make.

If the numbers don’t work, they don’t work. Face facts and move on.

• Could you get your rehab costs lower? Could be.
• Could you sell it for a few thousand over market value? Possibly.
• Could you buy it for a few thousand over your maximum ask price and still make a profit? Maybe.

Way too many question marks here . . .

Don’t buy a house if you have to adjust your spread sheet to make it work. Don’t lower your rehab budget or add to the selling price. In most cases, you’ll go over your budget and not under.  And then you’ll be under water.

 6) Buying on Emotion

“I love this place! It has so much…potential!”

In real estate investing, talk like this can get you in financial trouble quickly. The problem is that it’s easy to get carried away with emotion. I’ve done it. We’ve all done it. It’s hard NOT to do it.

However the more “detached” you can be, the better. Of course, this may cause you to miss a few deals on the way, which is fine. But the more you stay true to the rules and the fundamentals and theless you lead with emotions, the better off you’ll be.

When you get even the slightest tingling feeling of emotion coursing through your veins, take a break. Remove yourself from the situation. If possible, think with your logic…not your emotions.  And if you can’t get the price you want, move on to the next offer. There will be other deals.

7) “Faking It”

For the new investor, this is so tempting to do. Don’t be tempted to stretch the truth and be more than you are – especially when you are first starting out.

It’s best to be honest.

Yes, it’s less glamorous.

Yes, it may lose you a few deals.

Yes, it may seem like the wrong thing for your business.

But in the long run, it will get you more deals, more partners, more investment dollars and more listings because you’re honest.

People by and large want to help other people. It’s human nature. So partnering with a mentor or someone who knows the ropes can help you get through this early time.

If you don’t have any house flips or wholesale deals under your belt already, it’s perfectly alright to tell people as much. In many cases, you’ll get some old-timer real estate investor to take you under his wing and help you along. Better yet, you could pay for a good honest mentor/coach and ride his coattails to your first deal.  Either way, don’t “fake it.” Be up front and honest.

8) Breaking Promises…and Breaking Trust

The local real estate investing community is tight-knit. Word travels fast about people who are dishonest and untrustworthy. And the quickest way you can make a bad name for yourself is to make promises you cannot or don’t choose to keep.

Reputation is EVERYTHING.

So go out of your way to make sure you keep yours intact. As they say: “Reputation is hard to earn…but easy to lose”

And you can destroy your reputation that took you any years to build up in mere seconds. Sad but true.

So stick to these principles instead:

• Don’t make a promise you cannot keep
• Do what you say and say what you’ll do
• If you give someone your word, don’t go back on it….even if it may cost you thousands of dollars
• Do your best to treat others as you would like to be treated
• Be reliable. If you say you’ll be at a certain place at a certain time, be there
• Be open and honest, be transparent
• Be fair, don’t take advantage of people

Breaking promises can crush your real estate investing career quickly. Don’t be paranoid about it, just do what is right. If you do that, then chances are you’ll be in good hands.

But when you break your promises and develop a reputation as someone who cannot be trusted, word will spread. Reputations is everything in this business and trust me, word will get out quick.

There are a lot of mistakes you can make in real estate investing, but mistakes are what you learn from, so don’t go out of your way to avoid them.

Source: Bigger Pockets, Mike Lacava

Owners Who Foreclosed Back as Buyers

Families who had once lost their home to foreclosure following the housing crash are now re-emerging and looking to buy again, The Wall Street Journal reports. 

As Stuart Miller, chief executive of national homebuilder Lennar Corp., puts it: More people are “coming out of the penalty box.” 

Some builders have a growing interest in reaching out to these “boomerang” foreclosure buyers. For example, builders like K. Hovnanian are providing sales staff with fliers that detail mortgage eligibility rules for families who have undergone a foreclosure or bankruptcy. 

"The industry is saying, 'Pay your dues and then get back into the market,' " says Dan Klinger, president of K. Hovnanian American Mortgage.

In order to qualify for a mortgage backed by the Federal Housing Administration, families must wait three years or more to apply again following a foreclosure or short sale. Using that benchmark, about 729,000 households that were foreclosed on during the housing crash are now eligible to apply for an FHA mortgage–up from 285,000 a year ago, The Wall Street Journal reports. 

Fannie Mae and Freddie Mac require a much longer wait than FHA to qualify for a loan after a foreclosure or short sale, up to seven years. 

But just because “boomerang” families are allowed to apply again for financing for a home purchase doesn’t mean they’ll qualify for a loan, housing experts say. These families will still have to show a strong credit score and meet stringent underwriting standards. 

Market Stats

Yep, this market is pretty hot

Entire MLS (All Areas)

Residential Highlights

• 20.6% increase in number of closed sales for September year-over-year (3,147)
• 9.4% increase in average price (sold) ($306,633)
• 35.4% decrease in average days on market (64)
• 17.8% increase in number of closed sales TYD (28,218)

Condo/Townhome Highlights (All Areas)

• 49.6% decrease in average days on market (64)
• 10.3% increase in number of closed sales for September year-over-year (802)
• 16.8% increase in average price (sold) ($186,843)
• 9.5% increase in number of NEW listings (968)

~Click here for Full report of entire MLS

This only means 1 thing: the market is hot right now. More people are buying, and faster. Sellers are delighting in so much attention for their homes. Buyers are loving the 3.4% rates. The "doom & gloom" is just not happening in Metro Denver. 

Reluctant Sellers Holding Up the Market?

While home prices are making gains in many markets, many home owners continue to wait for home prices go up even further before wanting to list their homes for sale, Inman News reports. As such, inventory levels have been tightly constrained in many markets, resulting in shortages of available for-sale listings. 

I myself have seen the consequences of this on buyers: reasonably-priced houses whisked away as soon as they're put on the market; multiple bid situations making buyers feel pressured (or at least frustrated if they lose); and not much inventory to choose from.

"Many sellers are still not aware of how strong our market is," Charles Roberts, co-owner of Your Castle Real Estate who serves as a director on the Denver Board of REALTORS^®, told Inman News. "They still think it's a bad market to sell. Our job is to inform them about the market and explain to them that with a rising market, it has become a strong seller's market and to walk through their options."

In many areas, it’s a seller’s market right now, and that surprises many home owners, adds Jason Lopez, a broker at Atlantic & Pacific Real Estate in the San Diego area.

“Now it doesn't mean prices are skyrocketing like past cycles, but with the chance of multiple offers, it makes the process more appealing,” Lopez told Inman News.

And prices may never skyrocket like they did - tough lessons learned are better not repeated. 

So sellers, right now would be an excellent time to sell your home. Why? 

1) You have very little competition from other sellers. 

2) Prices have gone up, so you can price well. Many of my sellers were surprised that their home sold recently for what it could not get close to selling for 1-4 years ago.

3) Buyers will look at your house because of the low inventory, and if you're priced well in your market, you will get multiple offers! It's hard to say how long this seller's market will last.