CSREJ - April

Vol.6 No.8 www.csrej.com April 28, 2014

St. Jude Dream Home Sneak Peek and Floor Signing

PAGE 9

Peak Producers "Strike" Up A Conversation

PAGE 5

Vacation Home Sales Surge in 2013

PAGE 4 Mob

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PRSRT STDUS POSTAGEPAIDPERMIT 745 COLO SPGS CO

National News ........... Page 2Local News ............... Page 6On the Move ............. 3Local Expert ............. Page 14Around the Corner ...... Page 15

Tom Susemihl

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Sharon Ballinger

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Housing starts rise 2.8 percent in March

Will mortgage rates heat up this home buying season?Will mortgage rates heat up this home buying season?

By Jon PaukovichEnt—

As temperatures and the home buying season heat up, so too does media cover-age of possible interest rate hikes. While many economic experts are forecasting increased loan interest rates by year-end as a foregone conclusion – including those for mortgages – a number of fac-tors may undermine these assertions.

Interest rates actually fell slightly in the fi rst quarter of this year, despite the Federal Reserve twice announcing its re-duction in purchasing mortgage-backed securities and treasury bonds. Given that this has been the Fed’s long-employed strategy to hold down interest rates, you might expect this shift to spark higher

rates. But so far, there’s been no signifi cant change.

Mortgage rates could remain steady due to an-other Fed prac-tice: purchasing more mortgages

than are currently being originated. Al-though the Fed has reduced investment acquisitions to the tune of $10 billion, it is still tapping the interest earned on its several trillion dollar portfolio to buy mortgage-backed securities. Th is some-what blunts the negative impact of its

reduced investment policy. So while the housing industry as a whole is generating fewer mortgages, the percentage of those held by the Fed continues to rise. Th is keeps the mortgage market as a whole more stable and less susceptible to the vagaries of other economic trends.

While the Fed is technically insulated from political sway, it is fully aware of its role in infl uencing the economy. Increas-ing short-term interest rates could cause an increase in the federal budget defi cit which is commonly seen as a drag on the economy. Additionally, the U.S. labor market remains weak with sobering sta-tistics on the number of Americans who

are unemployed, underemployed or have given up and permanently left the job market. Th ese current economic realities - and others - would make it politically diffi cult for the Fed to justify raising in-terest rates.

While no one can reliably predict what will happen with interest rates, there are a number of indicators suggest-ing a rise may not be as rapid or as inevi-table as some media stories indicate. Th at being said, mortgages rates are still very good now. And if prospective buyers feel comfortable with the payment amounts pegged to current rates, it may be wise to lock them in.

Led by a 6 percent rise in single-family starts, nationwide housing production rose 2.8 percent above an upwardly re-vised February rate of 920,000 to a sea-sonally adjusted annual rate of 946,000

units in March, according to newly released fi gures from HUD and

the U.S. Census Bureau.“We see improving signs

of new-home construc-tion as we move into the spring buying season,” said Kevin Kelly, chair-man of the National As-

sociation of Home Build-ers (NAHB) and a home builder

and developer from Wilmington, Del. “Th e strongest recovery is in the

Northeast and Midwest, where builders were hampered by severe winter weather earlier in the year.”

“Today’s report is in line with our forecast of a gradual strengthening in the housing sector in 2014,” said NAHB Chief Economist David Crowe. “How-

ever, several uncertainties including tight credit conditions for home buyers and erratic job growth are making builders cautious about gett ing ahead of demand.”

Single-family housing starts rose 6 percent to a seasonally adjusted annual rate of 635,000 units in March, while multifamily starts fell 6.1 percent to 292,000 units.

Regionally in March, combined sin-gle- and multifamily housing production rose strongly in the Northeast and Mid-west with gains of 30.7 percent and 65.5 percent, respectively, but fell 9.1 percent and 4.5 percent in the South and West, respectively.

Overall permit issuance fell 2.4 per-cent to 990,000 units in March. Th e Northeast and Midwest posted gains of 33.3 percent and 26 percent, respective-ly, while the West was unchanged and the South posted a 17.1 percent decline.

The above article has been provided to you compliments of the NAHB.

2 www.csrej.com Colorado Springs Real Estate Journal April 28, 2014

Colorado Springs Real Estate Journal LLCPO Box 31395 | Colo Springs, CO 80931

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Colorado Springs Real Estate Journal LLC (CSREJ) is locally owned and operated out of Colorado Springs, Colorado. CSREJ is published once a month and distributed through US Mail to nearly all members of The Pikes Peak Association of Realtors® and The Colorado Springs Housing & Build-ing Association and many other industry-related professionals.

CSREJ is not responsible for any opinions or facts expressed by non-staff writers. CSREJ shall not be held responsible for any errors in advertising or editorial content.

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House-hold spendingBy Elliot Eisenberg, Ph.D., GraphsandLaughs, LLC

Before the Great Recession, household wealth peaked at $68.8 trillion or $254,600 per person. If that seems like more money than you have, it’s because wealth isn’t evenly distributed. The rich have much more of it than the poor. As a result, back in 2007 the median family had wealth of just $126,000 while the average family had $584,000. Then the recession hit, house prices plunged, stock markets cra-tered and household wealth hit a low of $56.6 trillion in 2009. Since then stock markets around the world have staged a remarkable recovery and house prices have been steadily recovering. As a re-sult, household wealth now stands at $80.7 trillion, almost $12 trillion more than before the recession. So things have more than recovered, right? Not quite.

Since 2007 there has been inflation and the US population has grown by 20 million people. As a result, inflation-adjusted per capita wealth is now $254,000, just a shade less than it was before the Great Recession. So we are at least back where we were before the recession hit, right? Not so fast. The problem is that the asset price recovery has been profoundly unequal and that

has caused the distribution of wealth to change dramatically. And that has huge implications for the economy.

Homeowner equity hit $10 trillion last quarter, and while way up from a low of $6.3 trillion in 2011, it’s nowhere near the pre-recession high of $13.4 tril-lion. By contrast, equities have soared and are now worth almost $23 billion, way more than their pre-recession high of $18.3 trillion. The economic kicker is that equities are primarily owned by upper-income households, while home equity is the major source of wealth for everybody else. This means that while the rich are roughly $5 trillion wealthier than they were before the recession, all other households are about $3.5 tril-lion poorer. And while the upper classes spend more when their wealth increases,

it’s nothing like the in-crease in spending that occurs when the rest of the population feels better off.

A huge chunk of middle class spend-ing is the result of tap-ping into home equity

via cash-out refinancing. Regrettably, despite rising home prices many house-holds are still under water, credit remains harder to get than ever before, and many households now have mortgages with ex-tremely low interest rates and are simply unwilling to tap into their home equity. As a result, mortgage equity withdrawal

has nearly stopped. After peaking at $320 billion in 2006, it was just $32 billion last year, a decline of almost $300 billion, and that is the highest it’s been since 2010!

In addition to the rich, another group that has done well is older Americans. Families headed by someone under 40 have on average recovered only one-third of their lost wealth, but families headed by someone middle-aged or older have recouped all their losses as more of their wealth is in stock and less in housing. And regrettably the middle-aged and the elderly, like the wealthy, are less likely to spend their capital gains than younger middle class families.

As a result of the profoundly uneven wealth recovery, spending on luxury goods has done very well but firms that rely on middle class spending are not en-joying nearly as much of a renaissance. For that to change wages will have to start rising.

Elliot Eisenberg, Ph.D. is President of Graphsand-Laughs, LLC and can be reached at [email protected]. His daily 70 word economics and policy blog can be seen at www.econ70.com.

Despite rising home prices many

households are still under water

April 28, 2014 Colorado Springs Real Estate Journal www.csrej.com 3

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Vacation home sales rose strongly in 2013, while investment purchases fell be-low the elevated levels seen in the previ-ous two years, according to the National Association of Realtors®.

NAR’s 2014 Investment and Vacation Home Buyers Survey,* covering exist-ing- and new-home transactions in 2013, shows vacation-home sales jumped 29.7 percent to an estimated 717,000 last year from 553,000 in 2012. Investment-home sales fell 8.5 percent to an estimated 1.10 million in 2013 from 1.21 million in 2012. Owner-occupied purchases rose 13.1 percent to 3.70 million last year from 3.27 million in 2012. The sales estimates are based on responses from households and exclude institutional in-vestment activity.

NAR Chief Economist Lawrence Yun expected an improvement in the vacation home market. “Growth in the equity markets has greatly bene-fited high net-worth households, thereby providing the wherewithal and confi-dence to purchase recreational property,” he said. “However, vacation-home sales are still about one-third below the peak activity seen in 2006.”

Vacation-home sales accounted for 13 percent of all transactions last year, their highest market share since 2006, while the portion of investment sales fell to 20 percent in 2013 from 24 percent in 2012.

Yun said the pullback in investment activity is understandable. “Investment buyers slowed their purchasing in 2013 because prices were rising quickly along with a declining availability of discount-ed foreclosures over the course of the year,” he said.

“In 2011 and 2012, investment prop-erty was a no-brainer because home pric-es had sharply over corrected during the downturn in many areas, creating great bargains that could be quickly turned into profit-able rentals. With a re-turn to more normal mar-ket condi-tions, inves-tors now have to evaluate their purchases more carefully and do their homework,” Yun added.

The median investment-home price was $130,000 in 2013, up 13.0 percent from $115,000 in 2012, while the me-dian vacation-home price was $168,700, up 12.5 percent from $150,000 in 2012.

All-cash purchases remained fairly common in the investment- and vaca-tion-home market: 46 percent of invest-ment buyers paid cash in 2013, as did 38 percent of vacation-home buyers.

Of buyers who financed their pur-chase with a mortgage, large downpay-ments continued to be the norm in 2013. The median downpayment for in-vestment buyers was 26 percent, while vacation-home buyers typically put 30 percent down.

Forty-seven percent of investment homes purchased in 2013 were dis-

tressed homes, as were 42 percent of va-cation homes.

Lifestyle factors remain the primary motivation for vacation-home buyers, while rental income is the main factor in investment purchases.

The typical vacation-home buyer was 43 years old, had a median household in-come of $85,600 and purchased a prop-erty that was a median distance of 180 miles from his or her primary residence; 46 percent of vacation homes were with-in 100 miles and 34 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 6 years, down from 10 years in 2012.

Five percent of vacation-home buyers had already resold their property, while another 9 percent plan to sell within a year. “This reflects the 28 percent of recreational property buyers who said they purchased to diversify investments or saw a good investment opportunity,” Yun said.

Buyers listed many reasons for pur-chasing a vacation home: 87 percent want to use the property for vacations or as a family retreat, 31 percent plan to use it as a primary residence in the future, 28 percent wanted to diversify their invest-ments or saw a good investment oppor-tunity, 23 percent plan to rent to others and 22 percent intend it for use by a fam-ily member, friend or relative.

Forty-one percent of vacation homes purchased last year were in the South, 28 percent in the West, 18 percent in the Northeast and 14 percent in the Midwest.

Investment-home buyers in 2013 had a median age of 42, earned $111,400 and bought a home that was relatively close to their primary residence – a median distance of 20 miles.

Fifty percent of investment buyers said they purchased for rental income, 34 percent wanted to diversify their invest-ments or saw a good investment oppor-tunity, and 22 percent bought for a family member, friend or relative to use – often to house a son or daughter while attend-ing college.

Seven percent of homes purchased by investment buyers last year have already been resold, and another 10 percent are planned to be sold within a year. Overall, investment buyers plan to hold the prop-erty for a median of 5 years, down from 8 years in 2012.

Thirty-eight percent of investment properties purchased last year were in the South, 25 percent in the West, 18 percent in the Northeast and 19 percent in the Midwest.

More than eight out of 10 second-home buyers, both for vacation and in-vestment homes, said it was a good time to buy.

Approximately 43.4 million people

Vacation home sales surge in 2013, investment property declines

Yun

Vacation-home sales accounted for 13 percent of all transactions last year


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PEAK PRODUCERS "STRIKE" UP A CONVERSATIONApril 15, 2014

“Strike Up A Conversation” Bowling & Network Event on Tuesday, April 15, at Brunswick Zone XL. Th is was held to give the 2014 Agent Membership and Team members a comfortable and fun way of gett ing to know each other bett er, fi rst suggested by Barry Boals of RE/MAX Real Estate Group two years ago.

IS YOUR MARKETING IN THE FAST LANE?

CALL JACOB CURBOWFOR A CONFIDENTIAL MEETING

719-390-1100

Forbes ranks cities that offer best family lifein the U.S. are ages 50-59 – a group that dominated second-home sales in the mid-dle part of the past decade and established records. An additional 42.7 million people are 40-49 years old, which is the historic prime age range for purchasing second homes, while another 40.4 million are 30-39 years of age.

NAR’s analysis of U.S. Census Bureau data shows there are 8.0 million vacation homes and 43.7 million investment units in the U.S., compared with 74.7 million own-er-occupied homes.

NAR’s 2014 Investment and Vacation Home Buyers Survey, conducted in March 2014, includes answers about 2,203 homes

purchased during 2013 from a representa-tive panel of 2,008 U.S. households. Th e survey controlled for age and income, based on information from the larger 2013 NAR Profi le of Home Buyers and Sellers, to limit any biases in the characteristics of respondents.

Th e 2014 Investment and Vacation Home Buyers Survey can be ordered by calling 800-874-6500, or online at www.re-altor.org/prodser.nsf/Research. Th e report is free to NAR members and costs $149.95 for non-members.

© Copyright National Association of Realtors. Reprinted with permission.

Which cities off er some of the best sett ings for raising a family? To fi nd out, Forbes evaluated America’s 100 largest metro areas, factoring in median house-hold income, cost of living, housing aff ordability, average commuting delays, crime rates, school quality, and the percentage of residents who own the home.

Here are the eight metros that topped its list for raising a family:

To learn more about the rankings and why each metro ranked high for family life, visit Forbes.com.

© Copyright National Association of Realtors. Reprinted with permission.

Raleigh, N.C.Grand Rapids, Mich.Ogden, UtahOmaha, Neb.

Youngstown, OhioDes Moines, IowaBoise, IdahoScranton-Wilkes Barre, Pa.


Local News

Greg Fowler 719-425-7042 [email protected] Colorado License Producer #390419

Rich Feasel 719-565-7487 [email protected] Colorado License Producer #6777030

Shirlee Dobbs 719-640-9454 [email protected] Colorado License Producer # 372390

Greg Wolff, CTIS, NTP Vice President 719-459-9653 [email protected] Colorado License Producer #6628978

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Nextage agents celebrate two year aniversaries

MasterBilt Homes comes home To Falcon

Four Ent mortgage loan officers nationally ranked as Top Mortgage Loan Originators

Nextage Pikes Peak Properties is pleased to announce two year anniversaries for agents: Ken Asher, Glenda Miller, Doug Pace, Gabriele Onofre and Marilyn Shockley. “We’ve been thrilled to have these agents on our team these past two years. The profes-sionalism they bring to our office and care they give their clients has been outstand-ing,” say Ann Knoll and Wayne Pinegar, owners of Nextage Pikes Peak Properties. Ann added, “These agents were our ‘pioneers,’ contributing significantly to the huge growth we’ve experienced since 2012 – nine agents then to nearly 30 agents today!”

Nextage Pikes Peak Properties, serving area residents since 2011, is located at 1880 Office Club Pointe in Briargate.Below left to right: Glenda Miller, Ken Asher, Gabriele Onofre, Marilyn Shockley, and Doug Pace.

Four Ent Federal Credit Union mortgage loan officers were recently recognized in Origination News’ 2013 Top Originators Survey. The annual list, compiled by the monthly mortgage industry publication, ranks the nation’s top mortgage loan origina-tors according to mortgage loan production volume. Ent Mortgage Loan Originators included in the 2013 list are:

Name Rank Loan Volume # of Loans

Stephanie Dombrowski 69 $76 million 405Lisa Holbrook 90 $69 million 416Tom Bechtel 127 $58 million 321Gina Marill 198 $47 million 263

“Having four of our mortgage loan officers nationally ranked as top loan originators recognizes their hard work and high level of professionalism, as well as Ent’s mortgage lending philosophy. From application to closing, Ent members work with the same mortgage loan officer. We believe it is that type of service commitment that these four – and all of Ent’s mortgage loan officers - provide, which keeps new members joining Ent and existing members coming back,” said Tony Sloan, Ent Mortgage Loan Produc-tion Manager.

StephanieDombrowskiNMLS ID # 459321

LisaHolbrook

NMLS ID # 422164

TomBechtel

NMLS ID # 459317

Gina Marill

NMLS ID # 971423

MasterBilt Homes (one of Colorado Springs premier homebuilders) is pleased to announce the grand opening of their new model home in the Village at Falcon. Located west of Meridian Rd. off Woodmen and Golden Sage, new MasterBilt Homes in the Village at Falcon start in the low $200s and offer a variety of amenities including front yard land-scaping with fence and sprinkler system, granite countertops, refrigerator, washer and dryer, pro-fessionally wall mounted flat screen TV with So-nos surround sound, and window blinds.

An award-winning custom homebuilder, MasterBilt Homes in the Village at Falcon offers six ranch and two-story home styles with low maintenance stucco exteriors and HOA maintained front yards. The two-story Harbor model, professionally merchandised by Parade of Homes award-winning designer, Christy Cassidy, includes three bedrooms with an upper level loft and is open daily till 6 p.m. at 11405 Neutra Grove.


Use your smartphone and a QR Reader application to see an exclusive tour of Meridian Ranch.

Discover Why People Love Living Here.

MODEL HOMES OPEN DAILY

• New Homes available now New Homes available now for immediate move-infor immediate move-in

• Homes from the Homes from the $200s to the $500s$200s to the $500s

• Innovative Neighborhood Innovative Neighborhood Schools

• 30,000 Sq. Ft. Recreation 30,000 Sq. Ft. Recreation Center & Outdoor PoolCenter & Outdoor Pool

• Indoor Pool Coming Soon

• Antler Creek Golf Course• CreekView Grill• Neighborhood Parks

& Paved Trails• Open Spaces & Views• Minutes to Peterson &

Schriever Air Force Bases• Easy Access to I-25, Hwy. 24

& Colorado Springs Airport

Time to hit the practice range!

Local News

ERA Herman Group Real Estate Colorado Springs & SouthernColorado named principal broker of Cartus Broker Network

Griffi s/Blessing participates in Second Annual Volunteer Day

Randy Deming, CEO of Campbell Homes, is pleased to announce the opening of Campbell Homes’ newest model home in Falcon Hills. Located at 11406 Palmers Green Dr. in Falcon Hills, the Raintree model is a ranch style home with a fully fi nished lower lev-el, three-car garage, and loaded with plenty of new design trends!

Professionally merchandised by award-winning in-terior designer Linda Shamburg, the Raintree features a contemporary design theme in hues of grey with pops of vibrant color. Th is home demonstrates maxi-mum fl exibility with four bedrooms, a formal dining room, and a lower level with plenty of personal spaces as well as entertaining spaces for friends and family.

In addition to the NEW MODEL HOME, Camp-bell Homes has a NEW selection of half-acre home sites on Palmers Green Dr. for ranch and two-story style homes starting in the high $200s.

For additional information or a personal tour, visit Fred at Campbell Homes in Falcon Hills at 11406 Palmers Green Dr. Model home open daily until 6 p.m.

Campbell Homes opens new model home in Falcon Hills

ERA Herman Group Real Estate of Colorado Springs & Southern Colorado has been named a principal member of the Cartus Broker Network. ERA Herman Group Real Estate has 150 agents in 3 offi ces through-out Colorado Springs and Southern Colorado areas. Network brokers are responsible for, among other things, the eff ective marketing of real estate on behalf of Cartus’ clients, and the delivery of Top Block1 service to its customers.

According to Gerald Pearce, Cartus executive vice president, Broker Services, Affi nity Services and Cartus Asset Recovery, ERA Herman Group Real Estate Colo-rado Springs & Southern Colorado will take on an im-portant role in providing real estate services to Cartus clients. Th e decision to make the fi rm a Network Broker in the market was based on their strong performance and a shared commitment to Cartus business and its customer goals.

Roger Herman, CEO & President for ERA Herman Group Real Estate said the relationship with Cartus brings with it increased responsibility and additional opportunities to the fi rm. “Th is move makes a tremen-dous statement about our company. Cartus is an indus-try leader in relocation. Th e fact that we were chosen as a Principal Broker speaks highly to our reputation as a real estate fi rm in this competitive market.”

Pearce stressed the critical role that the Cartus Net-work Brokers play in the company’s ability to support clients and their transferring employees. “Th e real estate brokers that make up our Network must provide the very best in service delivery, meeting and maintaining stringent performance standards. ERA Herman Group Real Estate Colorado Springs & Southern Colorado meets those standards. We are proud to be associated with them and look forward to a long and eff ective rela-tionship,” Pearce said.

Griffi s/Blessing employees celebrated National Vol-unteer Month by participating in their second annual “Volunteer Day" this past Friday, April 11, by spending their day working with non-profi t organizations in lieu of their normal daily activities. Members of the Multi-family and Commercial groups, along with partner ven-dors, donated their time and energy to one of four local organizations.

For Salvation Army Pikes Peak (www1.usw.salvation-army.org/usw/www_usw_colosprings.nsf), volunteers spent their day at RJ Montgomery New Hope Center, working to help improve the child care center by doing

arts and craft s with kids, sanitizing toys and performing general maintenance work on an apartment facility used by homeless families. Arlun, Inc and Reconstruction Experts assisted with this project by providing supplies and fl oor coverings.

For the Women's Resource Agency (www.wrainc.org), volunteers painted the facility and rotated the se-lection of seasonal att ire for the organization's "Suit Up for Success" program, which provides business and pro-fessional clothing to help women in need live with fi -

See Volunteer Day | 10


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ST. JUDE DREAM HOME GIVEAWAY FLOOR SIGNING & SNEAK PEEK EVENTS

Left: St. Jude Dream Home Giveaway Floor Signing, April 3, 2014 - Joe Loidolt, President, Classic Homes.

Left: Kyle Campbell, President, Classic Consulting & Engineering Services.

Above: Jon Carlson, Construction Manager, Classic Homes.

Above: VIP Sneak Peek Ribbon Cutting Event, April 10, 2014 - Jon Carlson of Classic Homes had the honor of cutting the ribbon at the 2014 Classic Homes St. Jude Dream Home.

Above: Lindsay Taylor, Rampart Supply.

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Property Management

Small multifamily properties such as duplexes, triplexes and fourplexes can be more difficult than they might seem on paper to make profitable. Some inves-tors shy away from this kind of real estate investment because there are so many unknown variables and risks, particularly if you are a new landlord. The purpose of this article is to highlight some actions to take and some things to anticipate as a current or pro-spective small multifamily property owner in the El Paso County region, so that you might have greater success in positioning your property to generate the best possible return on investment.

To start, know that there are good tenants at every price point. Just because the unit can only command $500 per month does not mean that you are destined to get poor quality tenants. You or your property manager (if you have one) need to make sure that you maintain a certain consistent screening criteria across the board. You would of course not have the same application requirements for a $500 per month unit as you would a $2,500 house – but you should still have a great level of confidence that based off of the data you were provided (credit, income, rental history, eviction history, criminal history, job tenure, et-cetera) that your new tenant will pay rent in full and on time, maintain the unit, and be good neighbors to the other occupants. For the small multifamily properties that our company manages in Colorado Springs (and surrounding areas) our data shows that tenants who oc-cupy these units have a longer average occupancy term. That’s good news – find good tenants, and treat them like royalty! Just make sure you’re not stuck with long term tenants who aren’t going to promote the success of your investment. The most important thing to know about tenant occupancy when purchasing a building is that the former owner or manager probably did not know how

to properly position the building, particularly if it was managed by the owner. So prepare to deal with poorly qualified tenants and higher lost rents for the first year or two until you can secure better tenants – this also hinges on your ability to get and keep the property in a good state of repair.

Property condition and the approach to mainte-nance is extremely important. The first thing to know is that if you do not have high standards for mainte-nance, regardless of the building location, you have

zero chance at securing and keeping good tenants. Also, know that spending ~2% of the purchase price on main-tenance each year is not unheard of. If you want to avoid some of the risk associated with this, you can get a 12-14 month home warranty on these kinds of buildings for a little over $1,000. I personally have had the most positive experiences with Blue Ribbon Home Warranty; and no I do not make money for mentioning their name in this article. If you are handy and have the time, you

could lower that 2% substantially.. just be very careful. So often I see landlords alienating good tenants by not having the proper time, tools or training to perform repairs correctly and during reasonable hours. If you opt to hire out main-tenance which can be handled by a non-licensed handyman, spend

some time shopping for a very affordable handyman who does good work. This can be difficult, but they are out there. Spending top dollar ($50+ per hour) for handyman services will quickly kill your margins. Also as a rule of thumb, never hire the big corporate name companies to do work on your property; they are gen-erally two to three times more expensive. The one ex-ception to this rule might be remediation and disaster restoration companies, because that is not the kind of work for which you want to use the cheapest vendor – one word: LIABILITY. Also, it might not be a bad idea to considering joining a property management focused trade association to find good vendors.

Another very important thing to help small multi-family buildings be profitable is to thoroughly review

how the utilities are billed. Many building owners do not charge tenants for the utility services which are not separately metered. Often you will find that the building owners will just let these utilities and the trash service be “included in the rent.” Taking this approach is almost as bad as throwing dollar bills in the trash. Why? Because every tenant who comes to rent a place expects to pay extra for utilities. What I see most often is, essentially, free utilities for the tenants. If the rent is marked up to account for the actual average utility cost the landlord would suffer longer vacancies and miss out on potential tenants who think the unit is overpriced before they ever called to ask if anything is included. Also, when people do call to ask about the unit, note that saying, “oh and the utilities are included!” is just an added bonus for the prospect – not normally a deciding factor. The landlord could have told them that they will need to pay the mu-nicipality for X utilities, and then pay him or her direct for the rest with no issue. Another reason this is un-common is that landlords don’t like having to track the amount and then chase down tenants to pay in arrears. Well, there is a very easy fix to that. Total the utility ser-vices that you are paying for the year and figure out how much it breaks down per month for each unit. Then use this average rate to figure out a flat amount that will be charged to every tenant each month for those utility services which they will need to pay along with their monthly rent in advance. No tracking. No splitting. No hassle. This is something which would be addressed at the point of lease renewal, so it is of course important to know when the existing leases expire before you jump into a building purchase.

Contrary to popular belief, I believe that it is pos-sible to be a happy, low stress landlord – but not if the landlord fails to take the correct measures. These mul-tifamily buildings can be profitable if they are properly repositioned.

Alex Yoder is the Director of Residential Management at Dorman Real Estate Services, a firm with over 350 residential doors. He has been in management for over 8 years and is currently serving as the Immediate Past Presidentof the Colorado Springs Chapter of NARPM (National Association of Residential Property Managers).

Duplexes, triplexes, and fourplexes: Tips for making them profitable

By Alex YoderDorman Real

Estate Services—

Just because the unit can only command $500 per month does not mean that you are destined to get poor quality tenants.

nancial independence. Davey Landscaping assisted with this project by providing supplies.

For Christmas Unlimited (www.christmasunlimited.org), volunteers put together "Imagination Kits" which the organization will distribute during Christmas time to help inspire local children's imaginations.

Finally, for the Flying W Ranch (www.flyingw.com/Donate.aspx), volunteers helped mulch the grounds that had been devastated by the Waldo Canyon Fire.

Griffis/Blessing is excited to have the opportunity to support these organizations and would also like to rec-ognize each of its employees who participated in this year's Volunteer Day. “Volunteering has always been a part of the Griffis/Blessing culture and we are happy to continue with the tradition of helping the communities we are involved in,” says William J “B.J.” Hybl Jr., Presi-dent and COO of the Property Services Group.

As a corporate event, volunteer projects were set up in each community where Griffis/Blessing has manage-ment, Colorado Springs, Denver and Boise, benefitting six different non-profit organizations.

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On the Move

Molchan, Wilson

Keller Williams PartnersPlease welcome Paxton Molchan as

the newest member of the Keller Wil-liams Partners Family. Paxton has lived in Colorado Springs for the last seven years and is very active. He loves playing com-petitive sports and really enjoys soccer. He is excited to begin building a reward-ing career in real estate!

Please join us in welcoming Rose (Boxuan) Wilson to the Keller Williams Partners Family! Rose was born and raised in China and is bilingual, speak-ing both English and Mandarin Chinese. She holds a degree in English and Inter-national Business, and owns a simple import business. She is excited to begin her career in real estate and feels that her friendly, outgoing personality will help her expand into the international market!

Gloria PlowmanBlue Spruce Real Estate

Blue Spruce Real Estate welcomes a new Broker Associate, Gloria Plowman.

Gloria’s father was a builder of upscale homes in Mexico and her background and experience in the housing industry is benefi cial to her present clients. She was raised in Mexico and received her Bach-elor’s Degree and became an Elementary School Teacher. A visit to her brother in the U. S. was the encouragement she needed to apply for, and then gain, citi-zenship in 1997.

Gloria has an att itude of helping and caring about others as exhibited in years as a home health professional and as a Family Advocate in Colo. Springs. She enjoys meeting people and is enthusias-tic about now working with those who need help with their Real Estate needs.

Virginia BerryV.I.P. Mortgage

V.I.P. Mortgage, Inc. has the pleasure to announce our newest member to the team, Virginia Berry. Experienced, knowledgeable, and compassionate, she

has been specializing in Reverse Mort-gages for all Colorado seniors for 15 years. Today, Virginia is an active mem-ber of the National Association of Re-verse Mortgage Lenders (NRMLA) and also holds a CSA (Certifi ed Senior Advi-sor) designation. “I was driven to V.I.P. because of their philosophy that people come fi rst. Th is is vital to me, because I work with our country’s most “protect-

ed” class, our seniors. Th ese people are our Parents and Grandparents, Uncles and Aunts, and I want to make sure that they are treated with dignity and respect.” said Virginia. In her spare time, Virginia enjoys short 4 day get-a-way adventures and strolling through art galleries, eating at quaint local establishments and meet-ing new people.

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Local Expert

By Bill McAfeeEmpire Title—

Owner’s Extended Coverage (OEC)Will or Will Not? That is the question.

Part 1 of 2

Empire Title of Colorado Springs

Empire Title of Woodland Park

According to the contract to buy and sell, residential (CBS1), both buyers and sellers have a choice of purchasing Owner’s Ex-tended Coverage (OEC). Th is is an endorsement to the title in-surance policy that a buyer would normally receive. Paragraph 8.1.3 of the contract reads “the title commitment ____ Will or ____ Will Not commit to delete or insure over the standard exceptions which relate to: (1) Parties in possession, (2) unre-corded easements, (3) survey matt ers, (4) unrecorded mechan-ics’ liens, (5) gap coverage (eff ective date of commitment to date deed is recorded), and (6) unpaid taxes, assessments and unredeemed tax sales prior to the year of closing (OEC).” Th e contract also has options for who will pay for this additional coverage. Th e choices are buyer, seller, one half buyer and one half seller, or other. Can you imagine how happy the legal industry is to create a paragraph that no one understands? I now will att empt to break this down for you. And I don’t just mean ‘Hammer Time’.

Paragraph 8.1.3 mirrors the standard exceptions which show up in title insurance commitments and policies. Now you ask ‘what is an exception?’ An exception is in-formation given to a perspective buyer which will not be covered in the title insurance policy. Simply put, you have notifi cation but no coverage. Today we are going to focus on the fi rst four exceptions in the title insurance commitment and policy commonly referred to as the standard exceptions. Th ey read as follows:

1. Rights or claims of parties in possession not shown by the Public Records.2. Easements or claims of easements not shown in in the Public Record.3. Discrepancies, confl icts in boundary lines, shortage in areas, encroachments,

and any facts which a correct survey and inspection of the land would disclose, and which are not shown by the public record.

4. Any lien or right to a lien, for services, labor or material heretofore or hereaft er furnished, imposed by law and now shown by the public records.

Th e standard exceptions stated in the commitment mirror the exceptions 8.1.3 re-fers to. In the commitment and the contract, the fi rst exception refers to parties in possession not shown by public record. Th e commitment specifi es that in more detail. Th e second exception in the contract mentions unrecorded easements. Th e second exception in the commitment talks about easements or claims of easements not shown in the public records. Th ese two exceptions even though worded diff erently mean the same thing. Th e third exception in the contract refers to survey matt ers. Th e third exception in the commitment talks about discrepancies, confl icts in boundary lines, shortage in area, encroachments, and any facts that a survey or inspection of the land would disclose but are not shown by public record. Th e fourth exception in the con-tract is unrecorded mechanics liens. Th e fourth exception in the commitment refer-ences any lien, right to lien, for services, labor or material which has been furnished, and can be imposed by law but is not recorded. Both of these exceptions are talking about unrecorded mechanics liens. Th is paragraph clarifi es the correlation between the exceptions in the contract and the exceptions in the commitment. Th ey essentially mean the same thing.

Th is brings up the ‘Will or Will Not’ question, and I am not talking about chocolate covered donuts. An example of a party in possession not shown by public record would be a part of your property fenced off by a neighbor or improvements built across property lines. Th is example leads us to the second exception which is easements or claims of easements not shown by public record. An example of this would be a road or trail crossing a property which has an unrecorded easement or some kind of adverse possession right. Th e buyer will not see it in public records, however a third party may have interests in the land. Exception number three talks about specifi c boundary line confl icts or encroachments or shortage of area which a survey or inspection would disclose. In other words, the boundary lines may be wrong or encroachments may go across property lines. Th e fi rst three exceptions all deal with a survey or an inspection of the property to determine if there are any adverse issues.

In the real estate contract the word ‘survey’ is a generic term for: Improvement Lo-cation Certifi cate (ILC), Improvement Survey Plat, or any other type of survey. Th ere are times when a title company will require one of the above items in order to insure over or delete exceptions 1, 2 and 3. Insuring over or deleting an exception means the buyer has coverage for those adverse ma� ers. In other words the surveyor will physically go out and inspect the property and report it to perspective buyers, title companies, and any other interested parties. If the buyer or seller mark ‘will not’ there will be no requirement for a survey because the title company will not be insuring par-ties in possession not shown by public record, unrecorded easements, or any boundary line or shortages in area that may exist. It is important for the buyers to understand that once a title company reviews the survey they may give coverage on certain items and exclude others. Th e contract clearly states that even though the buyer or seller is requesting for owners extended coverage it may not be fully given, or partially given, as the title company will have discretion as to what to insure or not insure. It is imperative that the buyer read the exceptions to know what the title company is going to cover or not cover.

Check back next month for Part 2.


Around the Corner

Thursday, May 1Masterminds Networking Group7:30am-9am @ Canon National BankRSVP to David Alley, 719-632-3526 [email protected]

B.L.E.E.P. (Black Forest & Eastern Marketing Group)8:30am-10am @ The Grill at Latigo Trail Equestrian Center. Roxene, 495-6213

Wednesday, May 7Mandatory Annual Commission Update9am-1pm @ Empire [email protected] 719-884-5300

Demystifying Commercial9am-1pm @ Pikes Peak Library East BranchMartinna Hill, Land Title 719.634.4821www.educateminds1.com

Marijuana Law2pm-4pm @ Pikes Peak Library East BranchMartinna Hill, Land Title 719.634.4821www.educateminds1.com

Restorative Drying for Water Damage11am-1pm @ Legacy [email protected]

Thursday, May 8Farm and Land8:30am @ Rudy's on 8th StreetGreg Wolff: 719-590-1711

Women's Council of Realtors11am-1pm @ The Sunbird RestaurantMichele: [email protected]

Free VA Class9am-1pm @ Legacy [email protected]

Monday, May 12Mortgage Loan Originator Mandatory Update Course Day 18am-5pm @ Legacy [email protected]

Tuesday, May 13Mortgage Loan Originator Mandatory Update Course Day 29am-11am @ Legacy [email protected]

Wednesday, May 14Myths, Mistakes, Mayhem in Short Sales9am-11am @ Empire [email protected] 719-884-5300

Roofing Red Flags – Class & Luncheon 12pm-2pm @ Empire [email protected] 719-884-5300

Thursday, May 15Selling Energy/Selling Confidence9am-1pm @ Empire [email protected] 719-884-5300

Friday, May 16Independent Brokers Forum9am-10:30am @ PPARwww.ppar.org

Rookie Round Table - Common Contract Issues9am-10:30am @ Legacy [email protected]

Saturday, May 17Home Buying Seminar (for clients)10am-12pm @ Ent (Campus Dr.)Ent.com/Seminars

Tuesday, May 20NARPM Meeting11am-1pm @ Clarion Hotel (314 W. Bijou)Danielle Coke, 719-495-2247

eContracts for Beginners2pm-4pm @ Empire [email protected] 719-884-5300

CTM eContracts - Intermediate10am-12pm @ Legacy [email protected]

Thursday, May 22FHA 203(k) Class, followed by Happy Hour 1pm-3pm @ Empire [email protected] 719-884-5300

Working with the Veteran Homebuyer9am-1pm @ Legacy [email protected]

Friday, May 30Campbell Homes BBQ and Model Grand Opening at Falcon Hills11:30am-1:30pm @ Falcon HillsRSVP 719.494.8010

Events subject to change. Due to space, please check with event/class holders early for more detailed information on cost, CE credits, sponsors and registration dates.

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