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Industry Blog

Hot Denver Real Estate Investment Opportunities

Scott Lukes - Friday, October 20, 2017
Fitzsimons
While $billions have already poured into the project and the area, about $7 billion more has been committed for the next decade। This area, if you are not aware, will become the premier bio/healthcare-sciences research park and medical center in the country. The key point about Fitz is that the investments are now starting to become evident in the form of hotels and larger corporate presence (think Chipotle, etc). Property values should soar in the near future. At ~$155k for a good 3/2 SFR, you can easily get you into this neighborhood and cash flow with only 10% down. More investors will flock to this area when they see the investments and the physical changes to the area, so for Fitz, you should buy soon.


Walnut Hills
Simply put, Walnut Hills is one of the least expensive neighborhoods you can still be: 1) close to I-25, 2) in the ‘good’ part of the Cherry Creek School district, 3) walking distance to light rail and 4) walking distance to world-class shopping and entertainment (by Elephant Bar and CB & Potts off of Arapahoe)। I recently picked up a mint $275k property for ~$230k, which is literally walking distance to the Arapahoe lightrail stop (and feeds into the Campus Middle School and Cherry Creek High School). Rent is ~$1,550… phone rang off the hook the day I put it up for rent.


Cherry Creek Vista
Next to CC reservoir, walking distance to Light Rail and Del Frisco’s, good CC schools and streets with $500-600k houses, $700-900k houses, and $260-350k houses… ALL NEXT TO ONE ANOTHER. In the near future, the $260-350k houses are likely to experience a dramatic upward swing. In the meantime, this neighborhood feeds into the best schools in the state, has a brand new swimming pool and rec center, is a fantastic place to live, and has VERY FEW rentals. You could likely get into this neighborhood and cash flow with 20% down.

Critical Elements of Tenant Leases

Scott Lukes - Saturday, October 14, 2017
Over the past few months, I have reviewed many, many home-grown and ‘Realtor-provided’ tenant leases for individual investors and homeowners who are trying to go it alone in the property management route. I have been shocked by what I have seen.

My philosophy is that manageing your own property is always the #1 option… no matter what a PM company says, nobody will give it the care and attention that you will.

Tenant leases are different. This is where you can loose your shirt, your home, and sometimes both. I have spent over $20,000 in legal, financial and other fees over the years on creating the ‘perfect’ lease. Even with a perfect lease, it is easy for a career rental abuser to make the ‘apparently perfect’ application package. You will love them. You will empathize with them. You will want to have a drink with them. Then they will squat in your property for 6 months without paying rent, knowing there is nothing you can do.

Please, please, if you DO do your own tenant leasing, make sure you:
  • Do not give more than 5 days grace period before posting a Pay or Quit noitice. This will be their first test for you.
  • ENFORCE late fees. Behavior is learned, not inherited.
  • Mandate they carry renters insurance. I make them add myself or Echo Summit as an additional insured under the Liability section.
  • Include a PAYMENT OF FUTURE RENT provision that allows you to accept partial rent payments in the middle of the evicton process (otherwise, you have to re-start the eviction clock every time you collect a penny)
  • Here are some good free forms that I am happy to share with you
  • Many other elements to consider, but at least make sure of these.

10-13-17

Scott Lukes - Friday, October 13, 2017

Denver Property Management Company Echo Summit shares RentJungle stat:

https://www.rentjungle.com/average-rent-in-denver-rent-trends/

As of September 2017, average rent for an apartment in Denver, CO is $1589 which is a 1.01% increase from last year when the average rent was $1573 , and a 0.69% increase from last month when the average rent was $1578

Property Management Lockout Key

Scott Lukes - Sunday, October 08, 2017
Be sure to check with your locksmith to see if they an ingenious little tool call  the lockout key.

Basically, if you have a move-out/eviction scenario where you need to secure the property before the locksmith can change locks, there is a special type of 2-part key that jams a piece of metal into each lock, making existing keys unusable. The metal is removable with another special ‘key.'


So, of course, the first question is “what’s to prevent somebody from just kicking the door down?” That is the topic of a completely different discussion thread. Continue checking this blog and the Echo Summit website below for more on this and other topics.

Echo Summit Property Management Volunteers at Food Bank of the Rockies

Scott Lukes - Wednesday, June 21, 2017

GREENWOOD VILLAGE, Colorado, November 28, 2016 – Echo Summit Property Management, a leading Denver and Ft. Collins-based Property Manager, continued its commitment of giving back to the community by volunteering at the Food Bank of the Rockies.

The Rocky Mountain Food Bank “helps families thrive by efficiently procuring and distributing food and essentials to the hungry through our programs and partner agencies.” During the volunteering event, Echo Summit staff worked in warehouse operations, palletizing, sorting and distributing orders for Food Bank customers.

“That was a LONG, LONG day,” said Echo Summit COO Kim Helton. “I don’t know what I am more proud of... our staff and their ongoing commitment to giving back to the community, or the fact that we set Food Bank records in efficiency and speed. Nice work, team!”

About Echo Summit Property Management

With nearly 1,000 properties managed, Echo has the experience, technology, process and scale that sets us apart from the pack. Echo is the preferred choice for local investors and Realtors who understand that there can be no compromise in quality and ethics in property management. Our approach and philosophy are simple... once you start treating an investment property like a -rental-, it will eventually dilapidate into one. ALL WE DO IS PROPERTY MANAGEMENT. We do not do real estate brokerage, real estate development, or sell cars. We are property managers who strive for nothing short of excellence. Our dedication and approach has earned Echo a quality reputation in Denver area rentals.

Colorado Marijuana laws for Denver Rentals Management -

Scott Lukes - Saturday, June 03, 2017

Property management usually has more to do with ‘grey’ areas than it does with black and white.  There is no more grey right now than with medical marijuana and outright legalization of marijuana through Amendment 64.

The big issue, of course, is that federal and state laws differ from one another.  On the federal level, HUD enforces the federal Fair Housing Act (Amended, Title II of the Americans with Disabilities Act, and § 504 of the Rehabilitation Act of 1973, to be exact). HUD’s viewpoint is that marijuana use, even for medical purposes, should not be allowed.  HUD is against housing providers granting reasonable accommodation requests related to medical marijuana, even in states like Colorado that have a Constitution that allows it.

So where does this leave the landlord?  General consensus is that as long as a landlord has an -enforced- policy in place that they disclose and follow consistently, they probably won’t get into trouble for allowing or not allowing marijuana.  The most conservative approach adopted by professional property managers is prohibition... marijuana use is prohibited even if the resident possesses a medical marijuana card or makes a reasonable accommodation request. The prohibition policy is legally defensible because marijuana use or possession is a felony under the federal Controlled Substances Act.

But how could a landlord get into trouble? A typical scenario would be someone with a pot card wants to rent from them.  The tenant says  “this card says I’m disabled, so under the American with Disabilities Act I’m asking for reasonable accommodation from you.”  This is a fair statement just as if someone in a wheel chair would ask for a wheel chair ramp, or someone with a seeing eye dog asks to bring their dog into a no-pet property. They are asking for the same accommodation.   As long as you have a published policy (that you strictly enforce and never waiver on) that says you do not acknowledge the pot card, and do not allow the use of marijuana you’re going to be safe.  The problem arises when 1) the applicant was never notified of this policy before their credit was run and/or before they moved in, or 2) the landlord allows tenant A to use marijuana (medical or not), and does not allow tenant B to use it. In this case, they have opened themselves up for a possible discrimination lawsuit.

The best way landlords can protect themselves from this potential outcome is to have their policy included in a published “rental applicant selection criteria” document. When someone fills out an application they need to communicate to the applicant what their selection criteria is for marijuana.  Then, when they sign the lease, the landlord should reiterate their policy through a thorough Crime and Drug-Free Addendum which further details their policy on marijuana and helps to further protect against liability.   

We are not suggesting that landlords allow or disallow the use of medical marijuana or other consumables, but they do need to have a policy and follow it consistently … as with anything in property management. 

Another area where landlords have to be very careful; if allowing growing on-premise, and it turns out that the renters are doing something illegally (or violating some form of code), the landlord might be brought into and legal proceedings, and held equally accountable.  If you allow growing, know your stuff and seek legal advice in advance.    

Denver Property Management - Bank Reconciliations

Scott Lukes - Sunday, May 28, 2017
Professional property managers have very strict legal requirements regarding how they handle incoming and outgoing monies that belong to the tenant or the owner. There are also strict, but seldom followed requirements regarding bank reconciliations. While many property managers conduct monthly bank reconciliations (which reconcile their property management software general ledger balances with the final monthly bank statements), very few are conducting the necessary 3-way tie-over, which reconciles the bank statements and property management software WITH the individual owner and renter account ledgers.

In professional property management, there should be 3 bank accounts: 1) security deposit escrow, 2) rent escrow and 3) corporate operations. The third account, corporate operations, is where the company pays its operations bills, and receives any fee income derived from managing properties. There is no legal requirement to reconcile this account, as it has no bearing on tenants or owners. The security deposit and rental escrow accounts are very different. Monies going into these accounts do not belong to the property management company, which is why the accounts are established as escrow (or trust) accounts. It is critical that the property manager understands where every penny in these accounts is… on a tenant-by-tenant, and owner-by-owner basis, at any given point in time. This is a difficult task.

What many property managers do is reconcile the bank statements for the escrow accounts with the overall account ledger balance in their property management software (e.g. Yardi, TenantPro, AppFolio, Property Boss). However, what it required by law is a three-way reconciliation (or three-way tie over) between the bank statement, property management software and also the tenant and owner ledgers. Each month those ledgers need to balance to zero. This is mandatory to ensure there is no co-mingling of funds between owners and renters, and that all monies are appropriately accounted for.

As a property owner, when seeking out a professional property manger be sure to investigate how they keep their books reconciled each month.

For more information on this and other topics, please visit us online: http://echo-summit.com/education
If you prefer to watch a video on this topic, visit us at: http://echo-summit.com/education/videos

Denver Property Management - Denver Property Management Utilities

Scott Lukes - Friday, May 19, 2017
As the rental market continues to thrive and home sales stay sluggish many homeowners are deciding to rent their homes until housing prices increase again. There is a long check list of items to consider when transition a personal residence into a rental. This report will be focusing on how to change the responsibility of the utilities from the homeowner to the new tenant in the context of Excel Energy.

The Landlord Agreement (LLA)
The first step in transitioning the utility bill is to include it in the Landlord Agreement. Utilities companies sometimes call this an LLA. The Landlord Agreement Team is an organization within the utility company that specifically handles this process. The Landlord Agreement provides a certain level of protection for the landlord with the key distinction of determining who the client is. Is it the homeowner or the new tenant? In this case the new tenant becomes the utility company’s client. As a result, any issue surrounding the utility bill, is exclusively between the company and the tenant. The landlord will have no visibility into any matter.

The Turn On, Turn Off Form
One of the provisions in the Landlord Agreement protecting the landlord is called “automatic turn on” and “automatic turn of.” So when a tenant moves in the landlord submits the turn on form and the utility bills goes out of the landlord’s name and into the tenants and vice versa when the tenant moves out. Another component of the turn on and turn off agreements is to be sure to have a 3rd party notification clause so if the tenant is not paying the utility bill, the landlord is notified monthly including the amount owed.

A good lease agreement will have language stating that the tenant is responsible for not only paying the rent but the utilities as well. This further protects the landlord from any financial exposure with regards to the utility expenses.

First Mover Advantage
Both the landlord and tenant have to fill out, sign and date the automatic turn on form. The party that first notifies the utility company as to what date the utilities are to be transferred; that date will be on the record. If the landlord believes, for example March 15th is the date of transfer but the tenant notifies first that the date is April 1 it’s that date that will be recognized. Any discrepancies of dates will have to be resolved between the landlord and tenant. The utility company will only recognize the date submitted first.

The Turn Off
When the tenant decides to move out the turn off form is completed with the turn off date. Both tenant and landlord sign and send to the utility company. If the tenant decides to move out a few days prior to that date they are still responsible for the utility expense up to the date on the form.

Another Way the Landlord is Protected
Sometimes a tenant might get way behind in paying the utility bill or in one particular winter month the bill spikes to several hundred dollars. They don’t have the money and decide to change the name on the bill to another family member, boyfriend / girlfriend….or maybe, back in the name of the landlord! By the basis of the Landlord Agreement and the Turn Off / Turn On Agreement the tenant cannot do this, hence, the importance of having the Landlord Agreement in place to protect the landlord. The Tenant is not allowed to change who is responsible for the bill unless both parties agree.

For more information on this and other topics, please visit us online: http://echo-summit.com/education
If you prefer to watch a video on this topic, visit us at: http://echo-summit.com/education/videos

Echo Summit Property Management COO Kim Helton Quoted in Denverite.com

Scott Lukes - Wednesday, May 17, 2017

GREENWOOD VILLAGE, Colorado, March 10, 2017 – Echo Summit Property Management, a leading Denver and Ft. Collins-based Property Manager, has been quoted in a recent article in popular Denver news site Denverite.com.

In the article “Denver landlords describe eviction from their perspectives — and suggest how to avoid it,” Kim Helton, Echo Summit’s Chief Operating Officer, discusses impact of evictions, and how to best deal with them when they happen.

One of Ms. Helton’s quotes from the article: “Payment plans. I don’t know how often other companies do them or how they do them, but I find it simpler to save a resident than to evict a resident. There are some people who will lie to you — their mother has been in the hospital 20 times or has been killed 20 times — you know they’re playing games with you. .. I think to solve the eviction problem, you ought to work out more agreements without having someone default. If I can help the renter reestablish themselves, it’s a win-win situation, I don’t have to remarket the home and they stay.”

About Echo Summit Property Management

With nearly 1,000 properties managed, Echo has the experience, technology, process and scale that sets us apart from the pack. Echo is the preferred choice for local investors and Realtors who understand that there can be no compromise in quality and ethics in property management. Our approach and philosophy are simple... once you start treating an investment property like a -rental-, it will eventually dilapidate into one. ALL WE DO IS PROPERTY MANAGEMENT. We do not do real estate brokerage, real estate development, or sell cars. We are property managers who strive for nothing short of excellence. Our dedication and approach has earned Echo a quality reputation in Denver area rentals.

Essential Denver Property Management - Craigslist Scams

Scott Lukes - Wednesday, May 10, 2017
The number of fake rental scams on Craigslist and other online classifieds continues to grow, with new aliases appearing daily. But while the names may change, the methods are always the same. These thieves, mainly based in Nigeria, the U.K. and the U.S., are out to steal renter’s money and identity.

There are several items to look out for:
1) The scammers tend to use yahoo, ymail, rocketmail, fastermail, live, hotmail and gmail, and they also post ads under anonymous craigslist addresses.
2) They use photos stolen from other property advertisements and many times copy the legitimate ad with same description and photos.
3) Look for the misspelling of words and more formal language that isn’t commonly used in such online advertising. The emails will be overly polite and poorly written or express excessive eagerness to rent the property without having proper steps including property inspection, background and credit checks.
4) When there are two identical ads the monthly rental fee will be much different. For instance a legitimate ad for a 4 bedroom house would be, say $1,350 per month. The scam ad will list the same property, same pictures and assume the homeowner’s identity but list it for $850. If it’s too good to be true it probably is. They will have a sob story or say they are not available to show the property but the renter can go and check it out if they wish.
5) What they all have in common is that sooner or later they send request to transfer funds via Western Union, Money gram or some other wire service. Never, under any circumstances wire money at the request of the prospective “landlord” and never provide a bank account number, bank routing number or other financial or personal information.

A renter should ALWAYS do business face-to-face with the landlord or property management company. It’s important to have access inside the property and to sign documents and contracts in person and in an office or professional setting.

For more information on this and other topics, please visit us online: http://echo-summit.com/education
If you prefer to watch a video on this topic, visit us at: http://echo-summit.com/education/videos

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