Property in Colorado...

[investinAK]

I have a lead on a property in Colorado. Approx. 45 minutes out of Pueblo near the New Mexico border. The property appraises at $340,000 as of one year ago, and comps are running about the same in the area...The seller is desparate, as they have already moved to Florida, and the home is now vacant. They are asking $245,000...

My main concern is this, even if I were to get it under contract, how would I perform a double closing when not only I am out of state, but the seller as well. Should I just get the option or purchase contract (go with the former if she will allow it) and then just sell my option to a retail buyer, or should I actually perform the double closing and maximize my profits? This is the type of situation I was curious if I could list my optioned property with a realtor and let them handle the showings and help us out with the closing.

Your opinions please! :)

[CharleyB]

InvestinAK;
We live in that part of Colorado part time, summers mostly.
Pueblo is nearly two hours from the New Mexico line so your location is vague to me. Maybe you could clarafy a little.
Some warnings:
1. There is a tremendous amount of methane gas well drilling going on in that area now. Since, property deeds there virtually NEVER include the mineral rights you should be careful that the oil companies aren't going to drill a well in the front yard. This has been a big problem for some people that we know.
2. Don't take the appraisal at face value. Get a second opinion. Enough said.
3. The Cuchara Ski Area near there closed a couple of years back and there has been downward pressure on real estate prices. Particularly in the vicinity of La Veta in Huerfano County.
4. Have the house inspected for carpenter ants and wood pecker damage.
Again, enough said.
I'm not trying to shoot down your deal. Just be careful. If you send me a PM I can get you in touch with a reputable realtor, inspector, etc. in the area.
All the Best,
CharleyB
www.rockyfordinternational.net

[investinAK]

Thanks Charley! This property is in Walsenburg. I will definitely get a second opinion, I am in the process of getting my comps and that jazz. I will check the mineral rights as well, as they have 16 acres, and could just imagine a big drilling rig right in front of the house! I will also have it checked for carpenters and woodpecker damage, if we get to that point. I don't see it as you trying to "shoot down" my deal...Just saving me from headaches in the future, thats all! :)

I am going to try to negotiate a sub2 deal, as I think this will provide the best exit strategy being so far away. How is the rental market in that area Charley?

[investinAK]

During my research I have come across a "neighborhood profile" website, that says the Walsenburg area, where this property is located, has enjoyed a 10.3% home appreciation rate during the last 12 months...that couldn't hurt right? :)

Appraisal was almost 1 year ago at $340,000

[CharleyB]

AK;
The Walsenburg area is definitly growing steadily. There is however a big difference between it and the area around La Veta and Cuchara. The La Veta area is home to some very high end properties, golf courses and the like and those properties have held their value well. Walsenburg is more of a blue collar area but has some new subdivisions going in with some heavy hitter developers from Colorado Springs showing some interest. If the home is close to, or even within site of, the Spanish Peaks or the Sangre de Cristo range it may be a good investment.

From what I've been told the market for less expensive rentals is relatively flat but the high end stuff nearer the mountains, La Veta area, can be rented short term, by the night or week, in the summer.

I think you may be ok concerning drilling activity because that area is out of the main methane fields that tend to be more in the pinion country south and east of that area in what is called the Raton Basin which extends down into northern New Mexico.

Hope this info helps.
All the Best,
CharleyB

[investinAK]

Hey Charley, That is all GREAT information!! The home actually has a straight on view of the Sangro De Cristos and the Spanish Peaks. Here is the lowdown on the property,

4/3/0, built in 2002, 3300 square feet, log siding, on 16 acres
They are selling for what they owe, which is $245,000 and the appraisal from one year ago is $340,000...Comps seem to be running in the same area as the appraisal. The monthly payment is $1650 PITI. They are only interested in relieveing themselves of the debt, as they thought it would make a great second home/investment, but they have family troubles in Florida, and it is hard for them to get back very much-if at all.

She said they do own the water rights, but said she was never too worried about it, as they are on city water. They do not own the mineral rights, that she knows of, but as you said, she thinks there is not much to worry about in her area, as they were supposedly mined back in the 20's and 30's.

Maybe if it is blue collar, it may be a decent area to do either lease option or owner financing with no qualifying? I have in-laws in the general vicinity, so I may have someone to help out with things if I decide to rent it out. I will keep you all updated. Thanks for all your help up to this point Charley! I really appreciate it!

[CharleyB]

AK;
Glad I could help.
God bless you.
All the Best,
CharleyB
www.rockyfordinternational.net