David and I flipped a single family residence in Parker during September of 2020. The property was owned by an elderly seller who wanted to sell “as is” and was a simple and straightforward cosmetic flip.We considered the flip relatively “low risk” given the price point and market conditions at the time, which included strong appreciation and low interest rates.
The objective of the flip was to purchase at $300K, make $25K in repairs and sell at $350K-$360K, for a net profit around $20K-$30K, split equally between David and I.
The two key contingencies were whether we replaced the roof and whether we could save on paying a buyer agent commission by sourcing the buyer ourselves. Ultimately, we sourced the buyer ourselves and, in doing so, agreed to replace the roof with an impact-resistant product. This was a win-win for both buyers and us.
The flip was typical in all respects, except that the margin (i.e. the difference between purchase and sale prices) was slimmer than a typical investor would require because David and I didn’t have to pay commissions on the sale. The scope of work, timeline, and financials were all within “normal” parameters.
With any flip, the key to profitability is delivering a quality product, while investing in cosmetic items (flooring, paint, fixtures, etc), while limiting investment in areas perceived as being having a lower return on investment (windows, siding, mechanical/plumbing/electrical systems, roofs).
Lucky for us, the property already had newer windows and exterior paint/siding. Based upon our inspection of the property, the flip required high ROI-items of new flooring, interior paint, and a main bathroom renovation. We also decided the flip required low-ROI repair items, including a new roof, new baseboard heating, and electrical repairs.
Below is a breakdown of how the financials and timeline looked:
Before & After Pictures
Enjoy the below before and afters…
While we enjoyed flipping, David and I thought it was more fun as a side venture than full-time business. We love our “day jobs” of assisting clients buy, sell, and invest in properties too much!
Over the span of 2 ½ months, David and I learned an incredible amount about sourcing materials, contractors, and the decision-making process of flipping a property – all things that will assist us with advising our buyer, seller, and investor clients.
If you are interested in partnering or learning more about fix and flips, contact us today at firstname.lastname@example.org.
Bryan Zerr is Employing Broker at Greenwood Estates Realty, a boutique brokerage located in the Denver Tech Center. Bryan began investing in real estate as a college freshman at Gonzaga University in 2005 and has remained passionate about all things real estate ever since. Whether it’s a $200K studio apartment or a $1MM+ luxury property, Bryan and Greenwood Estates Realty love providing value through integrity, expertise, and concierge-like service.