Member of the Colorado Bar Association

Board Member of
the Colorado Collaborative Divorce Professionals


When the Simple Becomes Complex:

Huettner Capital is a residential and commercial real estate lender. We handle all types of financing and specialize in complex transactions.

These situations typically involve self-employment, multiple properties, wealth management, investment property, relocation, and divorce to name a few. However, most people do not realize how frequently their situation is too complex for the typical lender to handle effectively.

Getting these loans done is not the problem. The problem is the people getting most borrower’s their loans. They simply have far too little knowledge and experience to get anything other than the cookie cutter loan done in less than several months. This is the reason why the traditional loan origination process just doesn’t work any more.

Creating a team and new loan process that works with full documentation loans, especially the complex ones, was the whole point in starting Huettner Capital from the very beginning. Welcome to the solution!

The Financial Benefits of Downsizing Your Home

I work with clients young and old to downsize their homes. While most of them are seeking the same financial benefits, some of them identified other reasons to move. Here is a quick rundown of the benefits of downsizing, a new twist to it, as well as a few mistakes to avoid.

The top 5 financial motivators to downsize:
1. Lower mortgage payment
2. Lower property taxes and insurance costs
3. Lower utility expense
4. Lower maintenance fees and effort
5. Use of the equity in the property for other purposes

At the same time, there are many other motivations to move to a smaller home. These include reducing their carbon footprint, simplifying their life, and the desire to pass important possessions onto others. Even though these benefits can be significant, they are different for everyone. One less common, yet increasing twist to downsizing is where people move but keep their prior residence as a rental.

Downsizing to Rent Old Home
Whether they are preparing for retirement or need to move and want to come back to their home later in life, more people are looking to downsize and rent out their current home.

The most common call I receive is from people who don’t really “need to” move, but are looking at it as part of their financial plan to obtain a rental property to generate income during retirement. Rather than buying a new home to rent, they keep their current home as a rental and buy their “retirement home” before retirement. This plan has several benefits over other retirement options and waiting to buy a rental at retirement.

The primary reason of owning a rental property in retirement is for cash flow. Generating income is difficult in a low rate environment with a wave of other retirees all seeking the same investments. More importantly, after saving for retirement for several decades, most retirees prefer to spend cash generated from their investments instead of selling investments to generate cash. Other benefits include long-term property appreciation and asset diversification.

The other call I receive is from younger couples looking to downsize for a few years and rent their current home with the plan to return in several years. Reasons for this vary from job changes to being in a specific school district for their kids. Others simply see downsizing for a few years as an easy way to jump-start their retirement savings by a decade, but they still want to be back in their current home later in life.

No matter the reason, renting out your current home has many advantages. First, you know the house, good and bad, and can better estimate the cost of maintenance. Second, your neighbors become quasi landlords and will call you if something goes wrong. Finally, you already have a loan on your current house and you will get better loan terms when you buy a new residence compared to if you were buying a home as an investment property.

The first question everyone asks is if they can qualify to buy a new home without selling their old home. It is actually easier than you think. Plus, you can use the income from a signed lease to offset the mortgage on the old house.

The Downsizing Mistake to Avoid
The one place where people make a mistake when downsizing is losing sight of their original goal. If you are downsizing to save money, make sure you save money in the end. Be careful of price creep or you could wind up in a smaller house that costs about the same. Also, be careful of fees other than the mortgage like home owner association dues that can sneak up on you.

Be sure to look at costs, benefits and potential pit-falls with an experienced real-estate professional and/or financial advisor for your unique situation. Educated, not emotional, decisions will help you meet the true outcomes you desire.

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