Flip it! Flip it Good!

What does it mean when someone says flip a house? Why has this house flipping trend become so popular in Boulder real estate?

When people decide to flip a house, they are in effect buying real estate and selling it shortly thereafter for a profit. This sounds like an attractive and lucrative idea to the entrepreneurial self as we consider new  ways to increase our incomes—but, one wrong turn in the house flipping process and things can get very convoluted and expensive

Location, finances, and types of flips will give you a clearer sense of what you might be getting into. When you think about location, there are a couple ideal scenarios where flipping a house will be rewarding and profitable. If you decide to purchase a house in a neighborhood that is working on cleaning itself up, you have a chance at making the neighborhood an attractive feature for potential buyers. Another option would be to purchase in a new developing area where high-end homes attract a special type of buyer that wants luxury features in their home. Also consider that, with these two options, there are some risks that will surface if the neighborhood experiences a high in crime rates or your budget is unrealistic or there could also be a price ceiling for a micro-neighborhood.

There is one major financial goal that house flipping centers around: buy low and sell high. What you need to look for is simple yet not so easy to find in certain areas: property worth more than the asking price or property that is not in good shape but can be repaired with minimal cost or sweat equity. The first thing to do is make a budget. Look at your finances and how much money you need. When you are able to make a bigger initial down payment, the interest rate is lowered. And, don’t forget, it always costs money to do those lengthy repairs and to cover up unwanted surprises.

Now that you know what your budget will be and what you are willing to invest, decide on what type of flip you would like to pursue. If you plan on purchasing a house to fix up, the time and money must be present to invest in the home improvements necessary to push this house to market quickly. Another type of flip that is gaining in popularity due to our current state in the real estate market is buying a foreclosed house at an auction or from the bank. These foreclosed houses are extremely underpriced and are a great opportunity for flippers. The only catch about foreclosed homes is that many may need repairs that the previous owners could not afford to fix. Banks usually sell properties only “as is.” Make sure you know what you need to do before purchasing the home. There are fewer bank owned and short sales in Boulder County than anywhere else in the state however a few do exist.

Michael grew up around Santa Fe and is a longtime resident of Boulder and has been with Sotheby’s International Realty since their inception in Boulder County and along the front range.  If you have questions regarding this article or would like information about Boulder real estate or Boulder Luxury Real Estate check out my website. You may also call or TEXT me 303-359-6627 or e-mail Michael Hughes is a Certified Negotiation Expert and full time Realtor at Fuller Sotheby’s International Realty in Boulder, CO.

Partial Lyrics;

now whip it
into shape
shape it up
get straight
go forward
move ahead
try to detect it
it’s not too late
to whip it
whip it good

Short Sale Colorado

Short sales can be painful.  Add to that, the concern, that the bank may come after you years later, for a deficiency, a tax consequence or send you a 1099 or promissory note to payback the deficiency. All of these can be devastating to your finances,  often spinning short sellers into bankruptcy. A short sale takes about 3 years to overcome, a bankruptcy can double that, foreclosure can add more time. The title to the property may be clouded by a deficiency or a judgement which can also cause future issues.  If the short sale is not done properly and in a timely manner it can lead to foreclosure.

What would you think if all of the problems with a short sale could be negotiated away and done in a timely manner? No deficiency! No tax consequence! No 1099! No promissory note! Short sales are tough enough on the homeowner. They don’t need to complicate your life and make it worse and spin you in to bankruptcy.

We work with investors who utilize their own in house negotiators to negotiate all the guesswork out of short sales. We can negotiate away the tax consequence(s), the 1099, the promissory note, the deficiency. What this means to you is no further problems or issues to deal with in the future. It is a clean short sale. No future surprises.

We can help you. Call me today to see if you qualify for a short sale. We can help take the pain part out of the short sale process.

Michael grew up around Santa Fe and is a longtime resident of Boulder and has been with Sotheby’s International Realty since their inception in Boulder County and along the front range.  If you have questions regarding a clean short sale or would like information about Boulder real estate or Boulder Luxury Real Estate check out my website. You may also call or TEXT me 303-359-6627 or e-mail Michael Hughes is a Certified Negotiation Expert and full time Realtor at Fuller Sotheby’s International Realty in Boulder, CO.

Top 10 Colorado Road Trips!

Posted by Michael Hughes       July 19, 2010

1. The San Juan Skyway. Ouray into Durango. Don’t miss: Telluride, Silverton, Mesa Verde and Pagosa Springs.
2. Pikes Peak Scenic Byway. Don’t miss: Manitou Springs, Seven Falls, Cave of the Winds and Garden of the Gods.
3. Steamboat Springs. Don’t miss Strawberry Hot Springs, Gondola and Arapahoe National Forest.
4. Independence Pass Scenic Byway. Between Twin Lakes and Aspen. Don’t miss Colorado Trail, Lake Creek Valley, and the Maroon Bells.
5. Glenwood Springs. Don’t miss Hot Springs Pool, Biking along the Colorado River, Glenwood Caverns and Yampah Spa Vapor Caves.
6. Trail Ridge Road. Don’t miss Rocky Mountain National Park, also Granby and Hot Sulphur Springs.
7. Black Canyon of the Gunnison. Don’t miss North Rim Drive, Blue Mesa Reservoir and the West Elk Scenic Byway to Crested Butte.
8. Highway of Legends. Highway 12 from Trinidad over Cucharas Pass to La Veta and Walsenberg. Don’t miss San Isabel National Forest, Spanish Peaks and the Great Sand Dunes and Colorado Gators (Colorados only public Alligator Farm).
9. Colorado National Monument. Grand Junction to Fruita. Don’t miss Rim Rock Drive (23 Miles), also Palisade Peach Festival and Colorado Wine Country.
10. Peak to Peak Highway.  Central City through Nederland to Estes Park. Don’t miss Rocky Mountain National Park, Boulder Falls, Longs Peak and Gold Hill.

If you have questions regarding this article or have thought about selling, renting, investing or  would like to Buy A House In Boulder check out my website. You may also call, text me 303-359-6627 or e-mail Michael Hughes at Fuller Sotheby’s International Realty in Boulder, CO. Featured Listings

The DEA vs. Medical Marijuana (Colorado)

Posted by Michael Hughes February 25,  2010

An open letter from Representative Jared Polis to Attorney General Eric Holder after the illegal DEA raids on a medical marijuana grower in Colorado on February 12, 2010.

Attorney General Eric Holder
U.S. Department of Justice
950 Pennsylvania Avenue NW
Washington, DC 20530-0001

Dear Attorney General Holder:

As you know, the voters in my state legalized marijuana for medical use, and placed it in the Colorado Constitution, Article XVIII § 14, the Supreme Law of Colorado.

The Department of Justice is to be commended for issuing formal written guidelines on October 19, 2009, clarifying that federal resources should not be used against people in compliance with state law in states that have legalized marijuana for medical use.  When drug czar Gil Kerlikowske was in Colorado recently, I thanked him for taking this step and respecting our state law.

Despite these formal guidelines, Friday, February 12, 2010, agents from the U.S. Department of Justice’s Drug Enforcement Administration (DEA) raided the home of medical marijuana caregiver Chris Bartkowicz in Highlands Ranch, Colorado.  In a news article in the Denver Post the next day, the lead DEA agent in the raid, Jeffrey Sweetin, claimed “We’re still going to continue to investigate and arrest people…Technically, every dispensary in the state is in blatant violation of federal law,” he said. “The time is coming when we go into a dispensary, we find out what their profit is, we seize the building and we arrest everybody. They’re violating federal law; they’re at risk of arrest and imprisonment.”

Agent Sweetin’s comment that “we arrest everybody” is of great concern to me and to the people of Colorado, who overwhelmingly voted to allow medical marijuana.  Coloradans suffering from debilitating medical conditions, many of them disabled, elderly, veterans, or otherwise vulnerable people, have expressed their concern to me that the DEA will come into  medical marijuana dispensaries, which are legal under Colorado law, and “arrest everybody” present.  Although Agent Sweetin reportedly has backed away from his comments, he has yet to issue a written clarification or resign, thus the widespread panic in Colorado continues.

On May 14, 2009, Mr. Kerlikowske told the Wall Street Journal: “Regardless of how you try to explain to people it’s a ‘war on drugs’ or a ‘war on a product,’ people see a war as a war on them,” he said. “We’re not at war with people in this country.”  The actions and commentary of Mr. Sweetin are inconsistent with the idea of not waging war against the people of the State of Colorado and are a contradiction to your agency’s laudable policies.

On Saturday, February 13, 2010, local Attorney Robert J. Corry, Jr. submitted a formal complaint regarding the raid and subsequent comments by Sweetin to the U.S. Department of Justice Office of Inspector General, which is tasked with investigating “waste, fraud, abuse, or misconduct” from Justice officials.  I ask you to instruct the Inspector General to respond promptly to Mr. Corry’s complaint.

On Tuesday, February 17, 2010, Acting U.S. Attorney for the District of Colorado David Gaouette announced his office’s intention to criminally charge Mr. Bartkowicz in federal court.  In order to ensure a fair trial for Mr. Bartkowicz, it is essential that the confusion about administration policy caused by the actions of Agent Sweetin be resolved ahead of jury selection in this case.  A response to Mr. Corry’s complaint would serve as point of clarity.

I again applaud your policy.  Treating drug policy as primarily an issue of public health, as opposed to an issue of criminal justice, is both practical and compassionate and it has been and will continue to be supported by the voters of Colorado.  Please clarify for me in writing whether Agent Sweetin’s comments that DEA will “arrest everybody” remains United States policy.  Thank you very much for your attention to this matter.
Sincerely,

Jared Polis
Member of Congress

cc: President Barack Obama

Why Investors Should Use a Buyers’ Agent

Posted by Michael Hughes   February 9, 2010

Reasons for an Investor to have a Buyer’s Agent:

• That the Buyers Agent is to look out for your best interest (They are legally bound to do so).
• There is no money savings by using the listing agent as they become (in Colorado) a Transaction Broker only working for the deal not for the buyer or the investor on your behalf.
• You agree to allow your consultant to be paid a pre-determined finder’s fee from the seller from whom you decide to buy.
• That the consultant will help you find the best deal. Performance based compensation. If they don’t find you what you want…they don’t get paid.
• You agree to work exclusively with that consultant. (This helps ensure that there is no pressure on you to buy because that consultant knows that he / she will eventually be rewarded for their effort to help you).
• You agree to only buy from sellers that will pay your sales person a finder’s fee.

  Buyer’s Agents offer Many Services:

Reliable advice and information is perhaps the key factor in making a “good decision”. As your buyer agent, they will provide you info such as, but not necessarily limited to the following:

• The original purchase price of the house. The Starting price, how long on the market,etc
• Evaluating improvements that the sellers may have made to the house and how those figure in to the price
• Comparative market analysis for similar houses in the neighborhood. Active, Expired and recently Sold.
• The average closing concessions paid by sellers of other similar houses in the neighborhood.
• The average drop from list price to sold price and in what time frame.
• How many days the property has been on the market for sale.
• A velocity pricing of supply and demand for this type of property in this price bandwidth.
• Best time of year to buy the property (if any)
• Computerized what if scenarios on spreadsheets to allow you to make sound financial decisions.
• Introduction to reliable mortgage lenders, home inspectors, settlement attorneys etc.
• Let the buyer’s agent worry about finding the perfect house – and they will help you take care of all the small details.

How Exactly Does a Real Estate Investors Buyer’s Agent Get Compensated?
Buyers agents are compensated by the seller of the property.  The listing agent will have made a commission arrangement with the seller for a set amount and the listing agent will offer a co-op fee for the buyer’s agent.  This is paid by the seller.  People who do not wish to pay co-op fees are sometimes FSBO’s (notorious for pricing too high), unscrupulous builders and people that are underwater with their mortgage.  Always work with a reputable investor  buyer’s agent.  It pays in the long run.

To read the entire article Investors: Why you should use a Buyer’s Agent By Rob Barney.

If you have questions regarding this article or Boulder Real Estate please call me 303-359-6627 or e-mail Michael Hughes at Fuller Sotheby’s International Realty in Boulder, CO

Like A Virus, Foreclosures Spread To New Areas

By Michael Hughes  February 2, 2010

While the usual states are seeing the same number of foreclosures in 2010 there is an interesting twist. States that have thus far, had few to no distressed properties are starting to see more and more. It’s no surprise after having spoken, last week, to asset managers (who spoke only with a guarantee of anonymity) at several large mortgage lenders, that there will be large waves of foreclosures hitting the market. A Tsunami as it were. Legal changes and a lengthening of the redemption period skewed the foreclosure numbers downward for 2009.  When these numbers catch up there will no longer be an artificial number applied to foreclosures and that is part of what we will be seeing in 2010. Boulder County Business Report said in 2009 that foreclosures in Boulder County rose 39% the only worse showing in Colorado real estate was Mesa County with a 139% increase in foreclosures.  To read the entire BCBR story go here. The most foreclosure filings will still go to the city of Las Vegas, Nevada where more than 12% of housing units received a foreclosure filing in 2009.  The “sand states” continue to lead in foreclosures.  States new to increasing foreclosure rates are parts of Utah, Arkansas, Oregon, Honolulu, Minnesota and Washington state. When it comes right down to it the areas with the most unemployment problems will be the areas with the increasing numbers of foreclosures.  It just makes sense.  While the house market has contributed to the economic crisis, the extent of the decline is still unknown.  This will reflect on the speed and the sustainability of the recovery. If you have questions or need help with a foreclosure, short sale or just have a general comment or question you can reach me at 303-359-6627 or visit my website or email me.  Please leave a comment.

New York Times; No Better Time To Buy Boulder Real Estate

By Michael Hughes January 25th, 2010

Regarding real estate anywhere, the question is, should I buy now or should I wait?  Clearly the opinion of the New York Times is that buying Boulder Real Estate in Boulder, Colorado guarantees controlled growth, no houses stealing up the nearby foothills.  No mega-towers and the town is surrounded by the magnanimous open space.  Also that a substantial fraction of the city’s budget goes toward purchasing more open space guaranteeing that this will be here for our children and their children’s, children’s, children.  Hiking, biking, running, walking, skating, climbing, skiing, fresh air are all at our beckoned call.

There is a premium put on the natural environment.  Many folks in town are maverick second home/condominium dwellers.   Pearl Street, a 4 block outdoor pedestrian mall is a hub for social interaction,   What’s the draw to Boulder? Lower taxes than most large cities in the east, clean air, clear water, safe streets  (with the exception of those who continue to text while driving), dining and late night cappuccinos  (bargain priced to haute cuisine), brilliant public and private schools, blue sky, CU-Boulder, friendly neighbors, 300 sunny days a year, a farmers market to die for and views, views, views. I have to agree.  I have been here since the early 80’s it just gets better and better and better.

On the high end penthouse condos can go for $2M + but the taxes are say around $13,000 and on the low end $399,000 with taxes around $2,100 per year.  If you wish to pursue a property in Boulder give me a call today Michael. To read the entire story go to New York Times

If you have questions or comments please email me at Michael or you can visit my website at

Boulder Property or visit Michael’s Boulder Blog Please leave a comment below regarding this article.

Boulder County’s Unemployment rate Continues Decline to 6.7 Percent

Boulder County’s unemployment rate continues decline, hits 6.7 percent

By Michael Hughes   November 30, 2009

81,000 people have dropped out of the Colorado workforce since last October 2008 when it was 2.7 million.  The workforce is; the number of people with jobs or looking for work.  At the same time, state officials say that some of Colorado’s biggest industries added jobs in October. Government added 7,300 more jobs and 1,900 were added in education and health services. Some of the job additions will be due to seasonality.  “The main reason our unemployment has been falling is because of people dropping out of the labor force,” said Alexandra Hall, the chief economist for the Department of Labor and Employment. The dwindling labor force may be attributed to people who are frustrated and quitting their job search or are going back to school for degrees or advanced degrees. Boulders’ unemployment rate is much better than the overall state which sits at about 7 percent. Jobless rates in Boulder and Broomfield counties continue to decline while the national unemployment rate is 10.2 percent.

Contact me today if you or anyone you know needs real estate help. e-Mail michael.hughes@sothebysrealty.com Direct 303-359-6627 Website:www.bolderrealestate.com