Identifying Hot Areas of the Denver Metro

[Spencer Rafii]

Hello Bp Community and the Denver Investor Network,

The market has been very strong and finding the next hot area is always on everyones mind. I have come across a ton of resources for choosing a neighborhood within a city for investing in a rental property, but what are some good resources and criteria that flippers look for when having a 4-6 month exit strategy. What else about the area do you all consider when flipping a property?

Below is always an interesting question I like to ask my investors when getting to know their criteria and what motives them to purchase there next project: "Which local areas of the Denver Metro would suite themselves best for their strategy and why?"

Some folks will look for low days on market, low active inventory and comps that are closing above ask.

What are the areas that you all like to flip in? For flips any recent success stories? Any of my Data folks have any good insight?

Thanks in advance,

Spencer

[Chris Montgomery]

@Spencer Rafii Thanks for the shoutout to our OZ fund at Four Points.  I appreciate it.

I thought I'd chime in on your flipping discussion. Prior to setting up four points we flipped hundreds of properties on the Western Slope.  There are multiple ways to analyze a deal, and we would change to numbers based on our evaluation of risk and timing, but the short answer is that we looked to net 15% on each flip, counting all rehab and transaction costs (but not counting financing costs)  Ideally we'd go start to finish in 6 months which allowed us to turn the money twice in one year.  Most of our distressed purchases were courthouse steps purchases for cash. In many cases that meant we could not see inside, and we were never doing full inspections.  Terrible way to buy one house but it can work out well at scale if you factor in risk appropriately. If we couldn't see inside, we'd increase our rehab guestimate.  If the house was older or we felt like it would take longer (occupied for instance) then we would increase our profit target.  Ultimately in our case that came down to being disciplined about only buying it at or below our max number at auction.

Chris