In my last blog post I promised you that big news was on it’s way and now it’s finally here! My big announcement is that the auto repair shop located at 1027 E Highway 24 in Woodland Park, CO is officially on the market!!! This is an incredible opportunity for anyone who is interested in investing in a commercial property. Who’s going to be the first to jump on it?  This article will break down why this property is such a great deal and why you should be on the lookout for more like it.

The Property

Let’s start with a quick breakdown of why this property is special. As you probably know the three most important things in real estate are: location location location. Trust me when I say this property has a fabulous location. Located on Highway 24, in the Safeway shopping center,  across the street from Natural Grocers and right next to an Autozone, this property is in the perfect location, meeting the needs of Woodland Park and the surrounding areas of Divide, Green Mountain Falls, Cripple Creek, Victor, Florissant, and Lake George. 

Easy To Find

First let’s talk about the customers. Being located on Highway 24 makes it simple for new and returning customers to find the shop. No need to drive into the mountains or off the main roads to find this shop. Be it someone looking for a routine service or someone who has broken down on the side of the road this auto shop could not be easier to find. 

Furthermore, I mentioned that this shop is conveniently located near an Autozone. Every now and then, a customer will go to the Autozone with a problem that they think they can fix on their own; however, it doesn’t always end up being that simple. Once they realize that things are more difficult than they thought, the professional auto repair shop is only a short distance away with automobile professionals who are always ready to answer questions and support them with the services they need. 

Quick Access to Parts

This fantastic location right off the highway is not just convenient for customer acquisition. As a registered Napa Autocare Center supplied by the local Napa Store, the parts arrive at the shop in less than 15 minutes of hitting the “send order button”. Talk about convenience for the shop AND the customers!

The Contents

Alright, what would you actually be getting if you were to purchase this property? The property is currently an auto repair shop. The building includes three separate drive-through bays, 2 full lifts and 1 short lift. Other machinery includes shop tools, bulk fluid dispensing equipment and waste storage tanks. The customer waiting area is clean and spacious. In this waiting area there is a gas log fireplace and restroom. All furniture, and equipment associated with the business are included with the purchase of the business and building; however,  mechanics’ own private tools are excluded.

Amenities

I mentioned that the lobby is clean and spacious but don’t forget this location is in a scenic, mountainous part of Colorado. The lobby has views of Pikes Peak and is surrounded by open space and trails. You will see deer crossing the street regularly, and occasionally see other wildlife. As an employee (or customer) you are close enough to walk down to the shopping center, grab some lunch and enjoy a gorgeous Colorado view. In my opinion, not a bad way to spend your lunch break.

The Business

Logistics

An added bonus to this property is that the business itself is actually for sale. Included in this offer is a profitable, well-known, respected auto repair business. This business has a long history in the community which draws in local customers. The owners have also worked hard to establish a presence on search engines, drawing in new clients all the time. The website was recently updated and is available to be transferred with the business. Can you imagine buying an established business that is already optimized for search engines? That will save you months, maybe even years of work! In addition to all of this, the auto shop equipment is also included in the deal (with the exception of the mechanic’s personal tools of course). Interestingly, the owners are also willing to sell the business separately, provide an owner-carry opportunity, or a lease purchase. The listing agent is a partial owner of the building and business. The owners are willing to make it work for you!

The Automotive Technicians

When starting a business it is important to find the right people to work alongside you. A huge benefit to this auto repair shop is that you are not starting from scratch when it comes to the business. There are experienced team members who work in the shop. They are professional, honest, technical experts with decades of experience under their belts. They are straight shooters who will tell it exactly how it is when it comes to the customer’s vehicle. The automotive technicians will give a real diagnosis of what they see is going on with the vehicle. They will advise the customer of exactly what needs to be done for the customer’s safety. They will also advise the customer of the issues that can come up if a customer chooses to wait for a repair. This process of communicating openly and honestly with the customer creates trust and rapport that leads to life long relationships. 

The Opportunity

Can’t you see why I have been so excited to share this news with you!? This new listing is the opportunity of a lifetime. It is the perfect setup for a mechanic who has always wanted to own their own shop or simply for someone with a passion for automobiles. This highly desirable Woodland Park location is ideal. Spending your days in the gorgeous mountains of Colorado is a dream come true. The business is established, profitable and continuing to grow. There is no better opportunity than this one! I can’t wait to see who will be the lucky one to snatch this up!

Check out our suggested steps for buying a home. Ten steps is all it takes to become a homeowner!

1. Check your credit and set a price range
2. Save enough cash to close
3. Choose a lender and get preapproved for a mortgage
4. Find a real estate agent
5. Start hunting for the right house for you
6. Make an offer
7. Get your mortgage approved
8. Get a home inspection
9. Get a home appraisal
10. Close on your new home!

Buying a house is an exciting event in life, and a major commitment. It’s imperative that future homeowners don’t miss any of the steps for buying a home, so here is a detailed  checklist for prospective buyers. 

1. Check your credit and set a price range 

Your credit score determines what kind of loan options and interest rates you will get from lenders, so taking time to pay down debts and establish a good credit history before applying for a mortgage will pay off in the years it usually takes to pay off your house. Your budget for buying a house depends primarily on your Debt-to-Income (DTI) ratio. Lenders want your DTI to be under 43%. 

2. Save enough cash to close

The down payment is usually 20%of the price of the property. This amount does not include appraisal fees, title insurance, and other costs. If your down payment is less than 20% you’ll be paying a mortgage insurance premium monthly. Before closing, your mortgage provider will give you a Closing Disclosure, which will outline each of your closing costs and the total due at closing. 

3. Choose a lender and get preapproved for a mortgage 

To get preapproved for a mortgage, you must apply to a lender, which involves providing information about your credit, income, and assets. Your lender will give you a preapproval letter, which states the amount you are qualified for.

4. Find a real estate agent 

A real estate agent is your representative in the complex home buying process. Our real estate agent will help you write offers and negotiate, making sure you get a house within your budget that fits your needs. 

5.  Start hunting for the right house 

At this point, you probably have some idea of what you’re looking for in a home, but there are many factors besides location and price. This is where your real estate agent can help you find houses that meet your criteria. 

6. Make an offer 

An offer is a contract expressing your desire to buy a house, the price you’re willing to pay, and a response deadline. Your real estate agent will write and submit your offer on your behalf. 

7. Get your mortgage 

Once you’ve chosen a house, you will work with your lender for final approval and loan documents, which typically takes 30 days.

8. Get a home inspection

A home inspector will uncover any potential problems. They will provide you with a list of any issues they find with the property. Then, you and your real estate agent can negotiate with the seller to have the problems corrected before the sale is closed, grant you credits toward covering some of the costs, or reduce the price if needed. In extreme cases, the inspection may reveal a deal breaker, a severe or expensive problem that makes you reconsider your purchase entirely. 

9. Get a home appraisal

A home appraisal is an assessment of the value of the property you’re looking to buy. Your lender will require an appraisal before they approve a mortgage, so that they don’t accidentally lend more money than the property is worth. 

10. Close on your new home!

Now it’s time to close! Review the closing documents provided by the title company and lender and schedule your closing time with the title company, provide closing funds, sign your documents, and get the key to your new home! 

The world of home buying can be confusing enough for a first time buyer. Just trying to find the right place for you can be a difficult process. Add trying to figure out all of the financial stuff on top of that and you end up with quite the headache. The good news is that this guide is designed to lay out all the basics around mortgages and answer all the questions that you might feel silly asking. 

What Exactly is a Mortgage?

To put things simply, a mortgage is a type of loan. Sometimes you might hear people refer to it as a mortgage loan or just as a mortgage, they are talking about the same thing. This loan is used to buy or refinance a home. The main purpose of getting a mortgage is so that you can buy a home without having to pay for it all upfront.The majority of people who buy a home do so with a mortgage. Let’s be honest, how many people do you know who could pay for the cost of a home out of pocket? 

Moreover, even if you have the money to pay for a house out of pocket it might be a smart idea to get a mortgage anyway. For instance, if you are a person who invests in properties, mortgages might allow you to use that capital to invest in multiple properties at once rather than going all in on one building. 

Other Important Definitions

Loans

A loan is a term which refers to a financial transaction in which one party receives a lump sum of money and agrees to pay it back. All mortgages are loans but not all loans are mortgages. 

Lender

In general the lender is the person who is providing the lump sum of money for the loan. For mortgages lenders are usually any sort of bank, credit union or online mortgage company.

Borrower

The borrower is the person who is asking for the lump sum and agreeing to pay it back to the lender. You might apply for a loan as an individual borrower or you might apply with a co-borrower. Adding a co-borrower can be helpful because it allows you to qualify for a larger amount.

Mortgage Payment

Simply the amount you pay every month toward your mortgage. Each monthly payment has four major parts: principal, interest, taxes and insurance.

Loan Principal

The main part… the amount you’re borrowing, the amount of money you have left to pay on the loan. 

Down Payment

This is the money you pay upfront to purchase a home. In most cases, you will have to put this money down to get a mortgage.

How Do I Get One?

A mortgage can be given by any sort of bank, credit union or online mortgage company. The institutions that offer mortgages are often referred to as lenders. The general process for getting a mortgage involves applying at one of these institutions (or more if you are shopping around – but be aware that every time you apply and the lender “pulls” your credit report, it may affect your credit score). In order to qualify for a mortgage you will want to have proof that you have a stable and reliable source of income. The lender will also be looking for a decent credit score (at least 580 for Federal Housing Administration loans or 620 for conventional loans) and a debt-to-income ratio of less than 50%. These factors and others like the current housing market and the type of loan you are asking for will determine the interest rate for your mortgage.

There Are Multiple Types?

I mentioned in the previous paragraph that there are different types of mortgages. Now there are a lot of special ones like VA loans, interest only loans and jumbo mortgage loans but the average person only needs to worry about two types: Federal Housing Administration (FHA) loans and conventional loans.

FHA Loans

FHA loans are loans that are backed by the Federal Housing Administration. A FHA loan is less risky for the lender because the FHA promises to reimburse the lender if you default on your loan. With this lower risk the lenders are able to offer these loans to people who are applying with lower credit scores and smaller down payments.

Conventional Loans

A conventional loan is any loan that is not backed by the federal government. These loans usually follow a set of guidelines set by government agencies called Fannie Mae and Freddie Mac. Conventional loans generally require the borrower to have a higher credit score and initial down payment to qualify compared to federally sponsored loans. However, a benefit of these loans is that they often come with better interest rates and lower fees. 

Interest Rates

Whenever anyone talks about mortgages, interest rates inevitably enter the conversation. When I say interest rates I mean the percentage that you pay to your lender as a fee for borrowing money. One of the biggest deciding factors that people use to determine which loan to take out or which lender to borrow from is interest rates. Now discussing how interest rates are determined gets complex quickly. In fact there are entire college courses taught about calculating interest rates. We are going to avoid the formulas today but if you are interested in learning more about the math behind it, here is a great resource. Instead, here we will define fixed and adjustable interest rates.

Fixed Rate

This one is named very accurately. A fixed rate is just an interest rate that stays the same for the entire length of your mortgage. Both the fixed and adjustable mortgage rates are determined by the lender based on how much of a risk the lender is taking by lending you the money. 

Adjustable Rate

This is a mortgage rate that changes during your loan based on the market. These interest rates are adjusted up or down every 6 months to a year. This means that the amount you pay each month on your mortgage can change due to your interest rate adjusting. Interestingly, most adjustable rate loans begin with a period of 5, 7 or 10 years in which the interest rate is fixed. Once that fixed period ends the adjustable rate begins and the mortgage payments may begin to change. You may want to speak with a mortgage lender to discuss what option is best for your situation. 

Do I Own My Home?

No, you do not fully own your home until the mortgage is paid off. Mortgages fall under the category of what is called “secured” loans. With this type of loan the borrower puts the home up as collateral. In short, if the borrower ever stops making payments on the loan the lender is allowed to take possession of the home. This is called foreclosure. It is for this reason that you need to make sure you are only taking out a loan for an amount that you feel comfortable knowing you will be able to pay back. 

Making Payments

After you acquire a loan and buy a house you will make monthly payments on that loan until the principal is paid off. You will make these payments over an agreed upon time known as the term of your loan. Most loan terms are 15 or 30 year but they can vary. The payments that you make each month will go toward paying off the principal and interest as well as covering insurance and taxes. Note: It is possible to NOT include your insurance and taxes in your mortgage payment. You would be paying these separate from your mortgage. It’s wise to discuss this with your lender. 

Amortization

Amortization is the term for how your loan payments are broken up over the course of the loan. The way that it usually works is that a higher portion of the payment goes toward the lender and paying down the interest on the loan at the beginning of the loan term. Then as time goes on your payments will be split in such a way that most of your money will go toward paying down the principal balance of the loan. 

Escrow

Why am I including escrow in the part of the article about making payments? Aren’t you in escrow while you are buying the house? Interestingly, escrow is a term that is used when an item such as money or property is temporarily transferred to a third party. So yes, you are in escrow when you are buying a house but escrow is also a part of the mortgage process. Let me explain.

Oftentimes lenders will set up escrow accounts to make it easy for you to pay all of the expenses related to the house and mortgage. This includes mortgage payments, property taxes and homeowners insurance. Because the home is technically owned by the lender during your mortgage period they have a vested interest in making sure that the property taxes and homeowners insurance bills are paid. The escrow account is an account that is managed by your lender so that they can easily send payments on insurance and taxes on your behalf. 

However, escrow accounts are only required on homes with a downpayment that is less than 20%. Therefore, you may be responsible for property taxes and insurance bills on your own if you made a down payment of more than 20%. Make sure you have this clear from the get go so that you know how much to budget each month for home related expenses.

Conclusion

I know that mortgage information can be a lot to take in. It is a very important step in the home buying process. First you have to get approved for the right mortgage for you, then find your home, make an offer, get final approval and close on the house. The good news is, if this was all overwhelming you always have a realtor who can help. We are trained to know this information backwards and forwards. For that reason, and plenty of others, it helps to have someone by your side when you are buying a home.  Hopefully this guide will help you to navigate the world of home buying a little more easily. Happy hunting!

Whether you are a first time home buyer or have bought countless homes, the process of finding a home can be a daunting task. If you are feeling overwhelmed by the search process, then it’s time to get someone on your side to lighten the load. With everything being online these days you might wonder if you actually need a realtor to help you buy a home. Afterall, can’t you find the same information on Google? And isn’t it more expensive to use an agent? The truth is that a real estate agent has access to more information than you can find on your own and using one doesn’t change the price at all. Let’s get rid of those myths and talk about a few reasons to use a realtor when buying a home. 

1. It’s Free

If you have never bought a home before you might be considering skipping finding a real estate agent in favor of saving money. Doing this is a mistake for a number of reasons but the first is that it will not actually save you any money at all. Generally, the money for paying the realtors comes from the seller. Both the selling and buying agent split the commission at no cost to you as the buyer. Either way you will be paying the same amount for your home. If you bring your own agent then you have a person with your best interest at heart sitting down at the negotiation table. Otherwise you are left to handle it all on your own.

2. They’re on Your Side

Purchasing a home is a major decision that requires a great deal of background research. It would be very easy to fall down the rabbit hole and spend hours and hours looking at homes online. Luckily, you don’t have to do this. It is literally your realtor’s job to be up to date on your local housing market. Bringing in an expert will save you from wasting time trying to search on your own. 

When I say that the realtor is on your side I mean it. Real estate agents are bound by a fiduciary duty. This is a legally mandated obligation wherein they must act in your best interest. If your realtor is a member of the National Association of Realtors they are also bound by that code of ethics which has a foundation in professionalism, serving the client and protecting the public.  If we take away all the legal jargon, what this is really saying is that your agent will respect your confidentiality and negotiate for you when it really counts.

If that is not convincing enough then you should know that having a professional by your side in negotiations makes a significant difference. For instance, it was reported in 2019 that 38% of buyers stated their agent negotiated a lower price for their home. Moreover, 47% of buyers say their agent helped negotiate better sales contract terms. 

3. Access to Everything

Furthermore, real estate agents might have access to information about houses that you or I could not find on our own. You may have heard the acronym MLS thrown around but not really known what it was. MLS stands for multiple listing service. This is a private database of houses that are available in a local area. It is a cooperative database put together by realtors which provides them with updates about the newest houses on the market as soon as they become available 

4. Schedule Showings

Imagine a beautiful house in your price range just popped up on the MLS. You know about it and are already scheduled for a viewing this afternoon because of your agent. It’s almost like having a personal assistant. As long as you clearly communicate your desires with your agent they will work hard to find the right house for you. This means scheduling showings and finding open houses that work with your life. 

5. They Know the Area

Maybe you are looking for a home in a town that you have lived in for years. Maybe you are moving across the country and have no idea what you are getting yourself into. No matter what your familiarity with an area, it always helps to have an extra set of eyes. You might be intimately familiar with a neighborhood but by working with a real estate agent you will probably learn something that you never knew about it. As of 2019, approximately 44% of buyers agree that their realtor improved their knowledge of the neighborhood during their housing hunt. What’s more, it is the realtor’s job to know about the investment potential of your neighborhood.  Your agent can help you steer clear of areas like flood or wildfire zones or areas where the property value is not rising like it should. Your realtor is there to provide as much information as possible for you to make the best decision in buying the right home for you.

6. Voice of Reason

It can be an incredibly emotional experience to purchase a home. For many people this is the largest purchase they will ever make. It is entirely understandable to be swept up in everything and forget to be sound and logical. Afterall, how many of us can look past some horrible wallpaper right away and see the beautiful construction? Or even worse, consider how easily you could be pulled in by some fancy looking remodeling then left with a weird floor plan or poor foundation. Your real estate agent is there to be the objective third party that points these things out to you. They are going to be practical and give you advice about things like when a simple remodel within your budget is the closest fit to your needs and best investment for your money.

7. Home Inspection

Have you ever seen how long a home inspection report is? Let me tell you, they are long and full of words that the average person has no idea how to interpret. Luckily, you have an expert on your side who knows exactly what questions to ask. Your real estate agent will be there to help you navigate the potential issue and determine if there are any serious red flags. I could give you a laundry list of things to look out for like pests, mold, roofing issues, leaks, air conditioning and furnace age and more. But remembering all of that in the moment is a nightmare for a novice. Especially when you consider that 52% of home buyers spend less than 2 hours in a home before they make an offer. Once your realtor has explained the severity of any issues to you in layman’s terms they can then proceed to negotiate any repairs or concessions on closing costs that could be appropriate. 

8. Paperwork

Speaking of negotiations, another benefit of using a real estate agent when buying a home is that they handle the paperwork. Paperwork of any kind can be difficult but housing contracts can be especially painful. The documents can be long and full of jargon  consequently, leaving them difficult to understand. That is why having an expert there to catch any oversights can be a godsend. I know I would not be able to stop kicking myself if I missed a costly repair credit or home warranty coverage in my contracts. With all the legal and financial contracts it provides great peace of mind to know that there is someone there to help you avoid delays and costly mistakes.

9. Keep Things Moving

How long do you think it takes to buy a home? Interestingly, it takes on average 4 and a half months of looking before you find the right home. After that it can take another month to a month and a half once you are under contract.That is almost six months on average of navigating the housing market. Of course this timeline is affected by a myriad of factors like time of year, financing, the housing market itself and so on. Yet, it is in a realtor’s best interest to keep you from getting stuck in any part of the home buying process. Having a talented agent can speed up the home buying process at crucial moments. 

10. Have Resources

Finally, real estate agents have access to resources that are necessary for the home buying process. Weird things come up all the time and having a real estate agent on your team can help you to sidestep any costly or time consuming anomalies simply by virtue of their job. 

Final Thoughts

At this point it would be silly not to use a real estate agent when buying a home. Who would not want a free expert to help them navigate the housing market? Using a talented agent can save you time and money on an already time consuming and expensive project. Not to mention, they will go to bat for you in all negotiations getting you the best possible deal. As long as you are using an agent that you trust you really can’t go wrong in using a realtor to buy a home. 

Investing in property can be a huge step toward financial security and freedom. Most people will tell you that investing in property is a smart, long term choice. Today we will examine some major benefits and drawbacks in investing in property and see if it is a wise choice for you. We will also take a look at some of the types of property investment.

1. Is Investing In Property Right for Me? 

As you probably know, owning real estate is one of the best investments for your money. Investing in real estate comes with many benefits including, the potential for passive income, tax advantages, building your portfolio, and creating equity. However, there are also drawbacks to investing in property such as the initial investment, the time and money required to maintain the property, and the liquidity of the asset. So how do you know if investing in property is the right move for you right now?

Asking the right questions

Financially Ready?

Truthfully, it all comes down to where you are in your life. The first question to ask yourself is if you are financially ready to make a down payment on an investment property. Real estate investment is a great way to make passive income and the property value will only rise over time. However, it does come at the cost of a large initial down payment. Interestingly, this downpayment is larger than if you were purchasing a home for yourself. But don’t worry we will talk about that in another article when we cover getting started. 

Investing More Than Money

Next, do you have the time and energy to spend fixing or maintaining the property? Property ownership is a serious investment not just financially but also with your time. For instance, if you were looking to flip a house it might require large chunks of your time to fix any issues and get it ready for the market. However, if you want to keep the property as a rental you will have a long term commitment to the property and the tenants who live there. This means being on call for any issue with the property like if a pipe were to burst. Of course you could always hire a property manager but that comes with its own set of advantages and drawbacks. 

Prior to investing in property it is important that you seriously consider all the benefits and drawbacks to see if it is the right choice for you. Investing in property requires a large commitment but can be well-worth it if you are prepared for the responsibility. If you do decide that property investment is the right choice then the next step is to decide how you want to do it. Let’s take a look at two of the ways that you can earn income from property investment. 

2. What Type of Property Should I Invest In?

When people think about investing in property there are generally two ways in which they envision making income: renting the property or flipping it. If you are new to the property investment world you might have questions about what is included in both of these types of investments. Here we will cover some of the basics.

Rental Income

When you purchase a property with the intention of earning rental income that means that you will be renting the property out to tenants. This is one of the most common ways of  earning passive income from your investment. This is a great long term strategy because your property will increase (appreciate) in value over time which will both add to your net worth and increase your cash flow from rental income. 

The Risks

There are some inherent risks in purchasing a property with the intent to rent it out. First and foremost, there is the possibility that you might not rent your property out right away. It is recommended by experts to have a financial cushion just in case this happens. Next, there are the potential issues that could arise from renting the property out. As a landlord you are responsible for maintaining the property. This means you need to have a wide variety of skills in case anything should go wrong. Additionally, you need to have enough knowledge of tenant laws in your region to make sure that you are able to handle any situation that pops up.

How to Be Successful

The best defense is a good offense. Anything can go wrong in property investment but taking the time to do things right at the start can help you to avoid some of the risks we mentioned above. 

Location Location Location

One way to make sure that your property never stays vacant for long is to invest in a good location. A few of the key aspects that you should be looking for are a good school district, low crime rates, access to public transit, and plenty of amenities like parks and malls. It also helps to invest in a place with a growing job market. This will allow for a greater amount of interest from those looking to rent. Finally, a location with low property taxes might not help rent out your property sooner, but it will help to make your property more profitable. A great real estate agent can help with this part.

Plan Ahead

It is important that you have clear expectations for the income that you will make from your property and plan accordingly. For instance, the average return might be 10% for a property that someone has owned and maintained for a while. However, in the first year there might be start-up costs which need to be considered. Interestingly, a 6% return in the first year is considered healthy and is expected to increase over time. Furthermore it is recommended that you budget approximately 1% of your return of the property value for maintenance. You might also want to consider additional hidden costs, such as property taxes, and homeowners’ association fees.  

Flipping a House

Another common practice for property investment is called flipping a house (also known as wholesale real estate investing). This is when you purchase a property, make any necessary updates and improvements then quickly sell the property. Just like purchasing a property for rental income, when you purchase with the intention to flip a house there are some details that you need to consider.

Common Errors

Just like any other business venture, investing in a property to flip requires knowledge, and planning in order to be successful. One of the common traps that first time investors fall into is underestimating. First time property investors will often underestimate the time or money required for a project. This can lead to at least frustration if not worse consequences for the investor. 

Moreover, a novice investor might underestimate the skills and knowledge required to complete a job. Is it better to get the job done by hiring a professional or to try to do it yourself? Simple tasks like cleaning or door knob handle replacement are fairly easy and require less skill and labor than refinishing a floor or repairing a wall. It is important to have an understanding of the limits to your skill base. This will save you a lot of time and frustration in the long run. Overall, patience and good judgement are two crucial aspects to flipping houses. 

3. Is Financing The Property Realistic and Profitable?

Getting A Loan

Getting a mortgage is probably the first thing you thought about when you heard “property financing.” Whether a mortgage makes sense for an investment property mostly comes down to costs and profitability. Is the interest rate low enough so you can make a profit off your property or is the interest rate going to eat up all of your margins? Typically a loan on a property that is not owner occupied is going to be at a higher interest rate. And then what do you do if you aren’t able to qualify for a loan? 

Another avenue to explore is private money lenders. Usually a private money lender will charge a higher rate and the loan will be for a shorter period of time. This may be ideal for a property that you are going to fix and flip. It is something you should carefully consider in your costs. How long are you expecting to have a loan on the property? What will the cost of the financing be? What happens if your project goes for a longer period of time than expected? 

Paying With Cash

Of course, if you have the cash sitting around in your bank, you may want to consider using it for your investment property; however, most of us don’t necessarily have that amount of cash just lying around. You will want to consider the purchase price, closing costs, and set your budget for renovations.  You also want to consider the opportunity cost of paying with cash. The main benefit is that you won’t pay interest on a loan, but you may be missing out on other investment opportunities. You may want to consider buying multiple properties and use your cash on hand for multiple down payments on several properties. This way you leverage the cash you have.  On the other hand, paying with cash might be better if you want a short term investment where you fix and flip.

Paying for Renovations

  It might take some creativity in figuring out how you are going to pay for your renovation. Don’t be afraid to explore all of the options available to you. If you figure your project is going to be complete quickly you may consider putting some of the expenses on a credit card, planning that you will pay off the debt as soon as you sell the property. Look for a lender that is willing to give you added cash for improvements. It may take some time to look at all the options, but it will be well worth it. 

Key Takeaways

Investing in property is a great way to make passive income, increase your net worth, and diversify your portfolio. All you need to do is make sure you are ready for the responsibility and commitment. Do lots of research and come in with a plan on exactly what you are looking to accomplish. Be sure to set realistic goals for those accomplishments. Use your resources (like a great real estate agent) to make sure you are investing in the best possible property. Finally, have patience. Property investment is something that pays off in the long term so relax and enjoy the ride. Check out this article about reasons to invest in real estate if you are curious about learning more.

The differences between a commercial real estate agent and a residential real estate agent are exactly as you would expect. The main difference is the agent’s client base. Commercial real estate agents focus on the buying, selling, and leasing of business properties, for example, storefronts, warehouses, shopping malls, office buildings, and other commercial properties. Residential real estate agents focus on the buying, selling, and leasing of properties for personal use like single family homes, condominiums, townhouses and apartments. In Colorado, the licensing requirements for commercial real estate agents and residential real estate agents are the same. 

Even though the real estate agent license in Colorado is the same for residential and commercial, it is rare for a real estate agent to work in both markets. The main reason is that Colorado regulations require an agent to be proficient and experienced in their area of focus. My background is a bit different than most other real estate agents. I break this mold because I have built experience and knowledge in both of these fields. I developed my residential knowledge by spending years working with another real estate agent specializing in residential foreclosure sales and fix-and-flips. I also was able to build experience in the commercial industry before activating my current Colorado license, by working for a company that specializes in the leasing and selling of office space, retail centers, and storefronts. I have the flexibility of working in both sectors because I have been able to gain knowledge and experience in both industries. 

Most of us as real estate agents focus on either residential or commercial real estate because we receive training in one specialty when we enter into a career in real estate. Our clients from that industry refer us to other clients, giving us more business of the same type. This leads to most real estate agents developing skills and expertise in either residential or commercial, but rarely both.

What Does a Commercial Real Estate Agent Do?

A commercial real estate agent assists in the sale, leasing, and management of commercial properties. A real estate agent is an expert in their field that works to negotiate for their client. Our job as commercial real estate agents is to be an expert, to advise our clients on the best course of action for their business as it relates to property, and to negotiate in the best interest of our client. This means that a commercial real estate agent has to be familiar with all of the factors that would be relevant to a business owner including zoning, taxes, average foot/street traffic, NNN, cap rates and other market data. We take all of these factors into consideration when deciding whether or not to recommend a property to a client. Since most people are more familiar with residential real estate, the equivalent for a residential real estate agent might be knowing the facts about homeowner associations, local school districts, proximity to restaurants and shopping malls, and what the local nightlife is like. It is also important for us, as professional real estate agents, to be knowledgeable and work with trusted professionals in the lending industry. 

How Do You Become a Commercial Real Estate Agent?

In order to become a commercial real estate agent, you must first complete 168 hours of pre-licensing education. This course allows real estate agents to become familiar with real estate laws, contract laws, trusts, common real estate practices, and other relevant practical applications.  Alternatively, you can also get a degree in real estate from an accredited college or university. There are different requirements if you’ve held a license in the past or have practiced real estate in a different jurisdiction. If you’re interested in those other situations, you can get more information on colorado license requirements here.

After completing the educational component you then need to pass two portions of the Colorado Real Estate Broker License exam. One exam consists of Colorado-specific questions and the other exam consists of national questions. After passing the National portion of the exam and the Colorado State portion of the exam, you’re almost ready to submit an application for a license. Before you can submit your application you need to complete a background check, which includes submitting your fingerprints to the Colorado Bureau of Investigation where they check FBI and CBI records to see if you have any criminal history. You will also need to decide and interview for which company you will be working for, and who will be your supervising broker. You must also obtain an Errors and Omissions (E&O) insurance policy. Once you’ve completed all those steps you’re finally ready to apply for your real estate broker license. It’s also important to know that real estate agents must continue to meet the education requirements to keep their license active. A certain amount of hours in approved courses are required for continuing education. 

How Are Commercial Real Estate Agents Paid?

Commercial real estate agents are paid a commission as a percentage of the sale. The percent can differ depending on the size of the transaction or even the negotiation. The seller or landlord is responsible for paying the commission. So if you are a buyer or renter, it doesn’t cost you anything for a real estate agent to represent you. The commission percentage is negotiated with the seller/landlord and listing agent, and is written in the listing contract. If a real estate agent is working on a lease rather than a sale, it is possible that the commission would be a flat fee instead of a percentage. There may be other fees associated with the sale of the property like inspection fees, survey fees, escrow payments, etc… None of these fees go to the real estate agent. The only compensation an agent will receive is the commission percentage or the flat commission fee.

Conclusion

The main difference between a residential real estate agent and a commercial real estate agent is experience and knowledge. Both types of real estate agents are charged with finding their clients the best properties for their needs or finding the right buyer for the right price. The skill-sets needed for the different industries are the main difference. These skill-sets allow the real estate agent to be an expert in a chosen focus area. With this expertise, we are able to assist you in the factors most important to you, and give you the professional advice you need to make an informed decision. We want to be your expert! Let us work for you. 

You may be hearing stories about the current housing market and how right now is a “seller’s market”…

This week I’ve gotten first hand experience of what it’s like out there in the market today, and let me tell you, it’s been an eye opener! 

In this competetive Colorado Springs market, the current trend is for residential listings to go “live” on a Thursday, be available for showings Friday, Saturday and Sunday. All offers are submitted by Sunday, reviewed by Monday and the home is usually under contract by Monday evening. That sounds like a really quick timeline to me and here is the  reality of what actually happened… that whole timeline of 5 days actually happened in 1 day, literally in less than 12 hours!!

My seller had done a great job of making the property beautiful… new carpet, paint, clean up and minor repairs. The hard work paid off the day the house went on the market. On the first day of being available for showings, we had at least 10 showings and received 3 amazing offers! The offers were so fabulous that it would have been silly to not accept one in hopes of something better. This is truly the best example of what a seller’s market actually is. 

If you have been considering selling your home, now may be the best time for you to talk with a professional and see what your options are. Real Estate is booming! Take action now!