Property Overview
For those who are interested in the upside potential of the Poplar St deal we're showing you this week, here comes a very similar-sized project up in Lakewood Village...a big project on a house with huge potential in an area that buyers want to be in. This part of Lakewood has a very diverse mix of homes, ranging from duplexes that sell in the 500s to 600s to single-family properties that sell from the 500s for fixers all the way up to stuff that gets into the 1.2 - 1.5 million range. Our subject is a 1961-built, all-brick ranch with 3016 total sq ft. As is often the case, Zillow has it wrong in that it's missing the basement....but trust us, and the pictures, that there is a basement here. The home sits on a large 14375 sq ft lot (.33 acres) and has Lakewood Gulch directly behind it. The lot on this house is so overgrown it's hard to see exactly what's back there, but we believe there is a nice stream that runs through the gulch. There is a 2-car attached garage. The layout of this house is good. Enter the front door into the foyer. Directly to the right is the galley kitchen and dining area. Behind that is the massive family room space with a brick fireplace. The stairs going to the lower level are to the left in the foyer. Down the hall to the left are the 3 main floor bedrooms, including the owner's suite with 3/4 bath. There is also a full bath in the hallway. Sliding patio doors in the family room lead to the back deck. Downstairs to the walkout basement, you'll find another huge family room space with a brick fireplace. There are 2 additional bedroom spaces, a 3/4 bath, a large storage area and utility/laundry room. Outside the lower level patio doors you'll find a large paved patio space with a really cool, old stone fireplace. The backyard of this house is massive. We'll get more into it in the work scope section, but there is no sugar-coating that this is a huge project...but with huge projects come significant upside. We've got the ARV here projected at $900,000, and the renovation budget at a hefty $155,000. At the $549,995 buy price, that still leaves almost $200,000 for other costs and profit margin. Assuming your other costs run around 10%, that leaves a potential net margin on this deal of $100,000. So, if you do bigger projects, or if you've done smaller ones but are ready to graduate to the big leagues, take a look at this deal. We all know that the market has been a bit stuck lately, but the recent drop in rates should help jumpstart things. And with a late October close date, the timing is good to knock this project out and have this be your first closed deal of 2025. The schools here are the highly rated Jeffco R-1 and the taxes for 2023 were $3431.
Neighborhood: This part of Lakewood is prized for its central location. Belmar is close by. Sloans Lake is close by. Downtown is close by. Freeway and light rail access are close by. Basically, everything is close by. Parks and recreation are nearby. Schools are good and they are close by.
Video Walkthrough
As the projected $155,000 budget would indicate, this is a big project. We'll walk you through it, starting on the exterior. We're budgeting for a new roof, all new windows, and all new exterior doors. We're budgeting to paint the whole exterior, including the brick, but if you wanted to keep the red brick, that certainly saves some budget. The front yard just needs some clean-up, bush pruning, etc. The back yard is a disaster. A very large dead tree came down in a storm last year. Thankfully it didn't fall on anything it could damage, but it's time to get in touch with your inner lumberjack to get it out of there. Good news is it's dead-dead, so you've got ready-to-burn firewood for a couple years if you like. The back yard is also an overgrown mess, so you'll be clearing lots of other brush and stuff. Once that's done, you'll have a great space. The lower level patio looks to be in pretty good condition, but the upper deck is going to need some work. On the interior, we're budgeting for everything...gutting, opening up, and redoing the kitchen, gut and redoing all the baths, refinishing floors or new flooring throughout, and full interior paint. The basement is mostly finished, so you're not starting from scratch down there, but it needs more than basic cosmetics. The owner fancied himself a do-it-yourselfer, so you'll notice 2 of the baths in some stage of renovation, with demo and other work in process on them. The house has a boiler and baseboard heat, but the boiler looks to be pretty old. Supposedly it works, but we've budgeted to replace it. Up to you if you want to do something to add A/C, but we're not budgeting to tear the house apart to add ductwork....although the basement needs enough work where running ductwork to the main level floors wouldn't be that huge of a deal. The water heater is about 15 years old, so that's in the budget too. You'll notice a hole dug in the utility room...the owner states there was some issue with the drain line, but that it's fixed...but please do your own assessment of that situation. There are cleanouts in the front yard, so the sewer line looks to have been done at some point in the last 10 or so years. You'll see in the pictures some cracking on the brick in a couple areas. This is happening over where the garage and the house meet, on the backside of the house. The owner states those cracks have been there for years and have not gotten worse. The owner has not had any sort of professional inspection done on this issue, so there are no reports or anything like that. We also haven't had a structural assessment done, but it doesn't look too serious (...relative to many structural issues we've seen over the years). It seems like perhaps the garage foundation has shifted some, but not the actual house foundation. Included in the budget is $20,000 for whatever structural fix may be needed. That's not based on any assessments or bids we've gotten, it's just putting in what seems to be an adequate amount to address the issue. Please make your own determination on both what the problem may be and the cost to fix it. Last but not least, for a little icing on the cake, you've got an FPE electric panel that will need replacing.
Total Budget: $155,120
Assuming you don't do anything to change the bed/bath count, the finished product will be a fully updated brick ranch with 5 beds, 3 baths and 3016 sq ft. With the fix budget we are projecting, there is plenty of room to do some really nice design and finish elements that will give this property some wow factor.
House needs everything, although it does look like the sewer line was redone given that there are cleanouts in the front yard. There is some cracking in the exterior brick on the back of the house where the garage meets the main house. This is discussed in more detail in the Workscope section.
Closing is scheduled for 10/24/2024.
5 bedrooms, 3 bathrooms, 3,016 sq ft
8668 W 10th Avenue, Lakewood, CO 80215 Zillow
Our first comp is located 2 blocks directly to the north of our subject. The home is a 5 bed, 3 bath with 3,729 total sq ft, but only 3100 finished square feet. It is a 1985-built home, and it looks all of 1985. We're not saying it's ugly, but let's just say that it's got an exceptionally dated 1980s look both inside and outside. It's got a 2 car attached garage and a very large 3,1799 sq ft lot. This isn't an ideal comp, but it helps paint the picture of why our ARV is projected where it is. And the truth is, even going back 12 months, there aren't many comps that land within .5 miles of our subject...so we've got to piece this together using a few parts. From a condition standpoint, this house has a nice yard and a nice kitchen. After that, it's clean but really dated. Our subject will be FAR nicer after a full renovation. The main differences here, other than condition, is that this comp has an extra 700 sq ft of living space, although almost all of that is unfinished. So, that extra space certainly has value, but it's also going to take a bunch of cash to turn it into finished living space. The lot on this comp is big...our subject has a lot that measures .33 acre, and this comp has nearly .70 acres. But what about the price? This comp was listed at $1,100,000, went under contract in 4 days, and sold on July 30, 2024 for $1,100,000. There were no seller concessions paid. We think that reducing our ARV by $200,000 below where this comp sold more than offsets the extra unfinished sq ft and the lot size...and keep in mind, our subject is going to be a whole lot nicer and have a whole lot more curb appeal than this comp. We could even make the case that a 200k adjustment is too much, and that our ARV is closer to 950...but we're trying to stay on the conservative side of the scale.
7960 W 8th Avenue, Lakewood, CO 80214 Zillow
This next comp is similar to the first in that it's got some extra features that our subject does not have, but the house itself provides a useful comparison. This house is actually quite a bit smaller than our subject, measuring 2,657 sq ft with 4 beds and 3 baths. The house itself is nice and clean, with many updates but also lots of dated elements. So, the house is about 400 sq ft smaller than our subject, and it has 1 less bedroom. Now, here is where the differences begin. This comp sits on a 41,556 sq ft lot, so almost an acre. In addition to a normal 1 car attached garage and a 1 car detached garage, it has a very large 5 car heated garage/workshop. It also has a pool, but whether that adds value is up to you to decide. The question becomes this...how much more is the large lot and the extra 5-car garage building worth versus the extra 400 sq ft and an extra bedroom in the house that our subject has? We know that this comp sold on June 25,2024 for $1,146,000. We also know that it went under contract in 4 days and that there was a $19,436 seller concession, bringing the net sale price to roughly $1,127,000. We're projecting our ARV at $227,000 less than this comp sold for, which we think more than offsets the differences in the properties. We could make a logical case that because the actual house on our subject is noticeably bigger, we're adjusting our ARV down too much. There is also the issue of the buyer pool for any property. There are lots of buyers looking for a fully updated brick ranch with a nice 3,000 sq ft layout, 5 beds, 3 baths, a 2 car garage, on a nice lot that has a stream behind it. But how many buyers are looking for a massive extra 5 car garage? If you've got a collection of toys, this comp is like a dream come true, but we think our subject will appeal to a much larger buyer audience.
8800 W 10th Avenue, Lakewood, CO 80215 Zillow
In terms of the condition of the house, this comp is the closest to what you'll have after completing a full renovation of our subject. This comp has had a full redo and it is really nice. It's located about 2 blocks north of our subject. It is right on 10th, and 10th is pretty busy, so that's a strike our subject does not have. Normally, we wouldn't even use this comp because it's so much smaller than our subject...but it gives us really useful information as a beautifully updated finished product. The house is a 4 bed, 3 bath layout with only 2,172 sq ft. It's got a 2 car attached garage and sits on a 12,598 sq ft lot. Like our subject, it is an all-brick ranch. The good news here also is this is the most recent closed sale in the area, with the sale having closed last Friday. Our subject has an extra bed, and extra bath, and about 850 more sq ft of living space. Lot sizes and garage setup are nearly identical, although our subject's lot is about 800 sq ft larger...and we have Lakewood Gulch behind us...and we're not on a busy street. This comp was listed for $825,000, went under contract in 8 days, and closed on September 20, 2024 at $830,000. There was, ouch, a $22,500 concession paid, bringing the net sale price to $807,500. We've got our projected ARV at $900,000. Our subject is roughly 37% larger, with an extra bed, and extra bath, a bigger lot, a stream behind the property and no busy street in front. With those differences, we could probably justify an ARV at least 100 grand higher than this comp sold for, but we're trying to lean towards the conservative side of things.
