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Denver Real Estate Law Blog

3 real estate investment risks

Are you thinking to invest in real estate property for the first time? Maybe you've owned your home for many years, but now you're thinking of investing in commercial or residential property for purely investment purposes. If this sounds like you, there are three categories of risk you'll want to know about when it comes to real estate investment:

  1. Volatility risks: These risks relate to the rise and fall of the price of your real estate on the market. Penny stocks and startup company stocks are some of the most volatile investments on the market. Generally, real estate is considered to be less volatile, but as many investors found out 10 years ago, the real estate markets can also be subjected to frighteningly drastic ups and downs.
  2. Concentrated risks: When you put all of your eggs in one basket, there's some serious risk there. What if your investment property burns down? What if the neighborhood goes downhill and all the property values fall? What if real estate prices, in general, take a tumble? Real estate investors might be tempted to invest all their money in one sector of the economy -- the real estate market. Be careful with this. Diversity is the key to minimizing any kind of investment risks.
  3. Leveraging risks: Most real estate investors don't have enough money to simply buy a property with their own cash. These investors have to take out a mortgage loan. If property values fall, and your property is worth less than your loan, or if you lose your source of income and can't pay the loan, serious financial problems can develop.

Can you identify any other real estate investment risks? Due to these and other risks, Denver-area real estate investors may be able to benefit from an in-depth evaluation of their real estate investment plans by consulting an experienced real estate attorney.

Factors to consider when buying your second home

One of the first decisions you'll want to make before you even start looking for a second home is how much of a fixer upper are you looking to buy. Many savvy investors enjoy picking up homes that can easily have sweat equity built in them. However, if you purchase a home that has too many flaws, then you may cut into your budget and the turnaround time that you intend to be able to flip or rent it within.

Getting involved in a home that needs complex repairs also puts the home at risk of sustaining further damage, may require you to hire an architect or engineer or require permitting that you cannot instantly obtain. In addition, you may find that the property needs more repairs than you anticipated. Regular maintenance may also be required to keep the home in tip top shape.

Protect yourself when signing a new construction builder contract

When builders are creating a new-construction residence, they often sign contracts ahead of time with prospective buyers. However, these contracts are not always for the benefit of the buyer. They're usually drafted for the benefit of the builder. You'll therefore want to avoid agreeing to an in-house builder agreement at all cost. Instead, you may want to create your own home purchase contract.

Here are some great tips to follow when signing a new home purchase agreement:

What are some alternatives to home foreclosure?

If it looks like your home will be foreclosed by your lender in Colorado, you may still have some options that you could employ as an alternative to the foreclosure process. This article will take a look at three potential foreclosure alternatives, which you can discuss with your lender to determine if you qualify.

Three alternatives to home foreclosure are:

Minimizing real estate liability with full disclosure

When you're selling a piece of real estate property, you will be exposing yourself to a certain amount of legal risk. Most lawsuits relating to real estate, however, stem from the seller's failure to disclose specific facts and information relating to the property. As such, any party who plans to sell a property should take steps to ensure that he or she has fully disclosed all relevant facts and information to prevent a lawsuit later on down the road.

In Colorado, you must disclose any latent defects relating to the property that you are aware of. Latent defects aren't visible, and wouldn't be seen with a casual inspection, but the seller is aware of them. An example of a latent defect would be a basement that fills with water every time it rains too hard. Things like this you definitely need to disclose to any potential buyer to avoid liability.

What to include in condo association bylaws

If you own a condo, chances are that you are also a member of the association governing its use. With new condos popping up in the Denver area, prospective buyers may be interested in learning more about how associations come together and write the rules. Balancing the need to maintain property values while giving owners sovereignty within their homes is tricky, but it all starts with a well-written set of guidelines for both ownership and governance.

What might be included in a set of condo association rules?

What's better: A ski condo or a ski house?

If owning a ski home is your dream, you're probably considering which options could be most appropriate for you and your family's needs. One question you'll need to debate is whether a ski condo or a ski house will be best. This article will discuss the potential benefits of both these options.

Ski houses are usually located close to -- or actually on -- mountains with ski resorts on them. These homes usually have steep roofs, so snow and rain fall off them, rather than collecting and creating the potential for winter roof damage. One potential "con" of owning a ski house is the fact that you'll need to maintain the residence and take care of all necessary upkeep and repairs. You'll also need to take care of snow removal and upkeep of the grounds around your home. This will increase the costs related to your home. In exchange, however, you get the privacy, independence and quiet of owning your own separate structure.

Are Chinese conglomerates halting their real estate buying spree?

Are Chinese conglomerates halting their real estate buying spree? The first half of 2017 has seen a dramatic decline in commercial real estate investments by Chinese firms. The change is largely due to actions taken by Chinese government authorities to discourage such investments.

Global real estate investment numbers indicate that Chinese firms spent $10.6 billion on foreign property transactions in 2016. However, this figure has declined by 84 percent in 2017. Part of the reason for the massive scaleback is due to the China Banking Regulation Commission's cutting its funding of foreign property investments. Instead of foreign investment, the Chinese government prefers its business conglomerates invest in a massive road project intended to connect China with Europe.

What to learn before you buy commercial real estate property

The benefits of owning a commercial real estate property are many. First, you're dealing with companies and businesses rather than individuals. Therefore, your relationship with them will be conducted in a more professional manner. Second, commercial real estate properties often generate higher rent incomes than residential properties.

Before you buy a piece of commercial real estate, you'll want to ask yourself the right questions and learn some important vocabulary.

New law promotes growth of Colorado condo market

Over the past decade, Denver’s condominium construction has been very limited. The percentage of new condos has fallen well below that of most major US cities. A new Colorado bill passed this spring looks to jump-start the Colorado condo community, and spark construction of mid-priced condominiums. Over the past few years, new condos construction was primarily limited to higher-end properties. This law may open up the possibility of condominium ownership to a new group of more price-conscious buyers.

 

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