Steamboat Springs Jan Levy was pitching The Cottonwoods townhomes as an investment opportunity to clients when she asked herself, "Why not?"
Why not pull three longtime acquaintances together into a sweat equity partnership and remodel the townhomes themselves?
Levy formed JML LLC with Jill Wehrli, Scott Bradley and Derek Ready. Seven months later, the partners are putting the finishing touches on a major interior remodeling of six townhomes tucked into Mariah Court near the Willowbrook neighborhood on Walton Creek.
"We basically bought ourselves a job," Levy said with a laugh. One major distinction between The Cottonwoods remodel and most jobs is that no one gets a paycheck until the last of the six townhomes sells (two are under contract and one has closed).
Adonna Allen at Alpine Bank helped arrange a loan for the partners that allowed them to use the units as collateral.
The Cottonwoods is not an aging townhome project - it was built in 2001 by Carlos Palomino. He held the first six units in the project (the six purchased by JML) for long-term rental, and sold the last three. He put the six up for sale in February and simultaneously undertook an exterior remodel which added color and texture to the brown townhomes. The new materials include board and batten siding, wood shingles and stone.
The exterior remodel has brought visible improvement to The Cottonwoods. However, when Levy toured the sale units, she quickly reached the conclusion that they needed interior upgrades to reach their potential in today's market. The original finishes were in the economy price point, and they were showing five years of wear from renters.
"The units are spacious and nice enough that I thought if it was brought up (in quality) it would be desirable," Levy said.
She is the proprietor of Lynx Realty, which has listed the townhomes. Levy chose partners whom she knew could add value through their experience in the building trades.
Ready owns True Blue Construction. Bradley was a painter for years and has been a carpenter for the past decade. Wehrli has been a tile setter since 1983.
"We just want to do a good job," Wehrli said. "We're in the same (income) bracket as the buyers. We pretty much gutted the units. We replaced everything but the kitchen cabinets and the drywall."
Where bathroom tubs had vinyl shower surrounds, Wehrli put in travertine or slate. All of the kitchen countertops gleam with marble tile.
The dining rooms and living rooms have new bamboo flooring, there's new carpet upstairs and wherever there were hollow doors, there are now six-panel pine doors. The trim was replaced with overlapping pine. All of the kitchens have new stainless steel appliances.
The units at the Cottonwoods are all three bedrooms and 3.5 baths and have garages. The living space measures 1,537 square feet. They have small covered front porches and rear decks. The upstairs bedrooms offer surprising views of the surrounding mountains.
The development has a small playground for toddlers and a hot tub.
Palomino listed them at $385,000. Levy and her partners have offered three of their remodeled units at $443,000 and three others, either corner units or those with more privacy in the back yard, at $459,000. Their investments in hard cash are materials and the cost of financing.
The association fees are $250 a month, but Levy said she's working to see if they can be brought down to $200.
The partners in The Cottonwoods remodel have been putting in sweat equity all summer and watching their carrying costs closely.
"No one gets paid until the last one sells," Wehrli said.