Denver still works... if you're patient... and lucky.

[Andy Palmer]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $347,000
Cash invested: $49,000
Sale price: $484,000

This was my favorite project of the flips I've done. Largely, that's because I love the style of the house and it was fun to bring back to life. But it didn't hurt that it was also my biggest win to date in the flipping world. I shoot for a profit of 10% of ARV. I usually hit that but my previous flip was my only flop, as it hit the market last October when the local market cooled quickly. I had to sell at a loss to access my capital. It hurt but I was determined to redeem myself. And I did!

What made you interested in investing in this type of deal?

I've been flipping for about five years. I only do about two a year, as I prefer buy and holds of multi-family. But flipping is a great way to build capital for those purchases, and that's been my MO. My wife's salary supports us, my income goes toward creating passive income for future beach days! But finding MFs that make sense right now is difficult in Denver. If any wholesalers are reading this, please PM me. I'd love to be on your buyers list. I'm actively seeking my next project right now.

How did you find this deal and how did you negotiate it?

Wholesaler. Denver is so competitive, I actually offered $15k over what the wholesaler wanted. When I started flipping a few years ago, bidding wars when acquiring from wholesalers wasn't a thing. Now, most do it. I find it incredibly annoying, but I have no control over their approaches and I understand why they do it. I have never offered this much more than asking, but I loved the character of the house and I place a premium on uniqueness in this market. It paid off.

How did you finance this deal?

Cash. I refinanced two of my MFs last summer to get cash to purchase another MF. I'm not finding those at the moment, so am putting that cash to work on flips until this elusive economic slowdown occurs. Obviously paying cash helped a lot with my bottom line. And working without a lender sure took the bite out of any delays.

How did you add value to the deal?

Can't take much credit here. The value was there. I just finessed it.

What was the outcome?

Almost a 70k upside! One more like that this year, and I'm done... plus my rentals... I'm not greedy.

Lessons learned? Challenges?

As much as we flippers need to create homes that appeal to the masses, my personal opinion is that a house also needs flavor. I prefer working on those houses and feel more confident when they hit the market. I don't always find those properties, but it's definitely an element I look for in an existing structure or do my damn-dest to create if absent. I don't have a rigid materials list and a set 'look'. I let the house decide. Waste of time? Maybe. But it's not all about the $ for me.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I would recommend a great agent. While I've negotiated a lower fee with my agent, as I'm a repeat customer, I'd be lying if I said I haven't considered the even lower fee options that are cropping up. In this case, though, my agent was instrumental in getting the appraisal where it needed to be for the buyer's lender. Comps weren't really there (and I mean they were much lower), but my agent worked some magic. Carly and Chris Mayer at https://www.mayerteamcolorado.com