wholesaling

[Mike McFadden]

Hello everybody, I need some advice here.  I been trying to wholesale for 1 year and got 3 deals done in my 1st year. But in the last 5 months I haven't seen any action at all I don't know why.  I have been doing the same amount of direct mail and marketing.  We are located in the Denver/northern colorado market.  The problem I've had absolutely 0 productive calls ("3 don't ever contact me again") since November.  I am not sure where to turn.  Would like to talk some people that have been in the same predicament before or now currently and how you got out of the funk. 

This is not fun for sure!

[Dee M.]

Originally posted by @Micki M.:

@Mike McFadden

Don't feel too bad about your marketing and listen to the locals on this one. Denver's retail market is so insane, even the guys I know who flipped 20 houses last year aren't seeing deals with any room in them.  

Micki is correct, the margins have thinned in Denver significantly, we have found that at least for us, the profits reside in "pop-tops", not the basic "flip".  Denver is landlocked and (there are not any new sub-divisions coming into metro Denver) going "up" and adding square footage and value in that area makes sense, the drawback, it is expensive with us paying upwards of $500,000 for some properties and the scope of work is both costly and time consuming with planning and zoning taking up to 3 months or longer.  The upside; it's not for everyone and therefore the profits can be substantial.

I started with 65K townhomes in Aurora and grew from there, those days seem to be long gone in Denver and surrounding areas.  As an example, we listed a home for sale at 185K, it had 53 showings in one day alone and sold for 208K with contracts arriving almost every few minutes that day. It also amazingly appraised for the 208K.  A similar scenario happened when we listed a property for 450K, it went for 45K over list price the same day, multiple offers, quick close.  Another we listed for 199K, sold instantly for cash and he (the buyer) rented it within a few days of closing, he waived inspection and closed in three days. I've bid on properties that obtain 18-25 offers the same day and these are for the most part, all cash, no inspection, close in 10 days, if you want it fine, if not they move to the next offer, no leeway or room to budge whatsoever. These are homes that need complete makeovers, (Wash Park, Bonnie Brae, Barnum, Aurora, Thornton, Broomfield, Villa Park, Sloan's Lake), it does not matter the area  As such, it's a wonderful time to be a seller in Denver! 

Therefore, people who have lived in their homes for 20 plus years all over Denver are reading these same stories and listing their property to extract the maximum value possible and therefore cutting margins to razor thin proportions for flippers. And many who have lived in these storied areas for decades in Denver are moving to the suburbs, new builds, bigger lots, gorgeous floor plans and a better value per sq ft. 

That's what is currently happening in the Denver market.