RIVER RUN COLORADO - FREQUENTLY ASKED QUESTIONS
IMPORTANT NOTE: This FAQ replaces earlier FAQs on this website. There have been substantive changes to the FAQ. Earlier versions should not be relied upon. This FAQ is provided as a convenience to persons interested in acquiring a home at River Run. It is not intended as a substitute for full and careful review of all documents related to such purchase, including the Purchase and Sale Agreement for a home and the Parcel Ground Lease for a parcel of land. Information contained in this FAQ is non-binding and subject to the terms of the actual documents governing the purchase. This information is subject to change without notice.
Revised August 12, 2020
River Run Colorado’s Innovative Financial Model
Our goal is to make River Run Colorado the most affordable and highest quality residential community on Colorado’s Western Slope. To achieve affordability and quality, the developer/landlord, River Run Colorado QOZB, LLC, will:
Sell the homes at its cost – currently $130,000 — eliminating the usual new home-builder profit mark-up and providing a significant up-front financial saving to the River Run Colorado home buyer.
Lease the land on which the home is located, instead of subdividing the property and requiring the home buyer to buy the land with the house.
The benefits of this financial model are the following:
- The model allows the developer/landlord to absorb all the usual expenses of development -design, infrastructure, roads, fees, landscaping, brokerage, marketing, construction interest and multiple profit mark-ups– AND, rather than taking the profit on the sale of the home with the land, to recover its investment over time by leasing the land to the home buyer.
- If the developer subdivided the land and sold the individual parcels to a home buyer, those costs and multiple profit mark-ups would be added to the land cost to be paid by the home buyer, very likely resulting in an added cost for the land that could amount to as much as $110,000, bringing the cost of the home with the land to $240,000.
- By keeping the home buyer’s upfront investment to $130,000 instead of $240,000, monthly payments will be much lower. Under current market conditions, it is expected that home buyers will be able to finance 70% of the home cost over 30 years at an annual interest rate of approximately 3%. That translates to a monthly payment of approximately $384 per month. Add the land lease of $650, which includes property management and maintenance – no additional HOA fees — and the monthly cost is a very affordable $1,034 per month for an incredibly stylish, high-quality home.
- Under the long-term lease model, the developer/landlord has an obvious incentive to make River Run Colorado a high-quality income producing property, allowing it to forego profit on the sale of the home.
- We expect that this financial model will disprove the myth that homes subject to a long-term land lease will not increase in value. Since the homes are true, site-built homes on a foundation, incorporating materials, construction and features not normally found in homes of this size and price, the value of a well-maintained home in River Run Colorado should keep pace with the appreciation of larger homes in the area. Importantly, the homes at River Run Colorado are designed and built to stand the test of time far better than similarly sized modular, manufactured, or park model homes to which they are frequently compared. Finally, once the community is fully developed, a waiting list of buyers seeking to become part of the community can be anticipated.
- If you assume that you are “saving” the $110,000 land cost and further assume that you invest that amount at an average return of 4.5% over the 60-year term of the lease, you would get a return of $4,950 per annum. If you add that amount to the annual HOA dues of about $2,760 that you would pay if you owned the land, the amount you would pay over 60 years would be very close to the total rent you would pay over the life of the lease.
- Although a long term-land lease is not common in Colorado, it is used widely in California, Arizona and Hawaii.
What is the initial cost of a home at River Run Colorado?
The first homes are available for purchase at a promotional price of $130,000 — an incomparable value in light of the quality, style, location and community services available to purchasers. Each home will be located on its own parcel of land that will be leased to the home buyer by the developer.
How much is the monthly parcel ground lease and what are its advantages?
The 60-year parcel ground lease is at an initial promotional rate of $650 per month. The land lease allows affordable access to a home without the need to finance the expensive land and land development costs, dramatically reducing the down payment requirement and monthly mortgage payment.
What does the monthly parcel ground lease cover?
River Run Colorado is a full-service residential community, and the lease payment covers community management, as well as maintenance of grass, plants, trees and shrubs on common areas and on individual home parcels, to include irrigation, fertilization, mowing, pruning, leaf collection, snow removal, and the like. River Run Colorado provides a dog park, and residents have access to the Colorado River through the adjacent KOA and its boat ramp.
What recurring expenses will home owners incur?
In addition to the initial $650 per month parcel ground lease, River Run Colorado home owners are responsible for annual home insurance charges (approximately $50 per month) and real estate taxes on the assessed value of the home (approximately $60 per month). Additionally, homeowners are responsible for monthly water, sewer and electricity charges that will be separately assessed and billed to homeowners. Given the small size, excellent insulation and efficient heating/cooling systems of the homes at River Run Colorado, home owners who practice reasonable conservation methods can estimate their average monthly water, sewer and electric costs at approximately $100/month, based on two-person occupancy.
Home owners will be required to contract with the Town of Silt for curbside trash pickup – currently $25 per month — and RRC will provide trash container screening enclosures at no cost. Conduit will be available at each home parcel for cable TV, internet and landline phone service from Comcast at the homeowner’s option and additional cost.
Who is the developer of River Run Colorado?
River Run Colorado QOZB LLC (RRC), a Qualified Opportunity Zone company, is the developer of the River Run Colorado residential community adjacent to the associated “Glenwood Springs West/Colorado River KOA Holiday”, in the Town of Silt, Garfield County, Colorado.
What is RRC’s vision for River Run?
- When fully built-out, River Run Colorado will consist of:
- 70 fully-landscaped home parcels of approximately 2,770 square feet each, available for long-term lease in a full-service community (parcel landscaping is included in the price of the home)
- 70 for-sale, 670 square foot, two-bedroom homes, built on the 70 home parcels using conventional construction methods
- Generously sized parcels with homes spaced 20-24 apart and fully landscaped, with a fire-pit and parking for two cars in tandem, offered on a 60-year lease
- All this on approximately seven beautifully landscaped and well-maintained acres with access through the adjacent KOA to the KOA boat ramp and 3,000 feet of frontage along the Colorado River.
What are the homes like?
- They are no longer factory-built “tiny homes”, legally considered a recreational vehicle, delivered to Silt on a wheeled chassis and limited to 400 square feet of living space with a 120 square foot half-height loft
- They are now traditionally constructed homes, built on-site, on a foundation, to the International Residential Building Code
- The homes have 670 square feet of living space – almost 30% more space than the “tiny homes”
- They have front and rear covered patios at ground level (no more steps to a deck)
- Other improvements over the original model home:
- A bigger refrigerator
- A stack washer-dryer
- A bigger bathroom
- Additional windows
- Beam and rafter vaulting throughout, including the upstairs bedroom
- Walk-in closet/storage in upper bedroom
- 125-amp electrical service
- Three air conditioning units
- High-density spray foam insulated roof and walls
- Easy to negotiate spiral stair
- Real wood beams and trusses
- 35% more tongue and groove wood panel interiors
What are the dimensions and features of the homes that are now available for purchase at River Run Colorado?
- The homes are 12 feet wide and 40 feet long, with vaulted ceilings throughout
- They have 670 square feet of living space and include a living/dining area, kitchen, full bathroom and bedroom on the first floor and a fully-enclosed second bedroom on the upper floor, accessed by a circular stairway
- Both bedrooms can accommodate queen size beds
- There are 96 square foot covered patios at the front and back of the home and a 198 square foot fire-ring area
- The homes are “green-built” and energy efficient, and will include features not typically found in homes of this size, including a stone fireplace, wood clad interior, in-floor radiant heat, mini-split air conditioning and solid-surface countertops
- The homes come with a refrigerator/freezer, range with oven, microwave oven, dishwasher, stack washer/dryer, surface lighting and ceiling fans
Phase-One Parcel and Home Development
Phase-one development encompasses the first 13 parcels at the south end of the River Run Colorado property, closest to and with temporary access through the KOA. Five homes have been built. The first home is being used as a model home and the remaining four homes are for sale.
Does RRC have plans to deal with the likely need of River Run Colorado residents for additional storage space?
RRC has plans to develop multi-story buildings on additional acreage along the north and west boundaries of River Run Colorado to provide space that can be rented by River Run Colorado residents and others, at rates that will be competitive with similar self-storage space in the region, for indoor parking and self-storage of personal goods. The buildings will also provide frontage road screening and highway noise attenuation for River Run Colorado residents.
May the landlord terminate the Ground Lease without cause?
The ground lease will be a sixty-year lease that will contain provisions adequately protecting any lessee who is in compliance with its terms. This is in sharp contrast to a mobile home community where the typical short-term lease creates significant risk for the homeowner.
What public transportation is available to and from River Run Colorado?
The Roaring Fork Transportation Authority provides service from the Fire House in Silt west to Rifle and east to West Glenwood and then south to Carbondale and Aspen.