When it comes to flipping houses, Denver is a top destination. With its old Victorian homes, vibrant culture, and a steadily growing market, Denver has become a hotbed for house flipping. But flipping a house is no easy task. It requires knowledge, dedication, and the right tools.
You're likely feeling overwhelmed with all the details you need to know. But the truth is, the most important thing you can do is start. Every house-flipping journey is unique, and there's no one-size-fits-all formula. Don't let fear of the unknown stop you from reaching your goals. We're here to help you every step of the way!
The housing market in Denver sees consistent year-over-year growth despite external factors like interest rates or Covid shutdowns. If you're part of a young couple like me, getting the opportunity to flip a house is one of the best ways to create wealth and set a foundation for your future. And if you're located in Colorado, the Denver area market is the hottest one for home flippers. In the first quarter of 2023, Denver had an impressive 9% of all real estate transactions in the US, consisting of 72,960 single-family homes and condominiums being sold. In today's current market, you're looking to make good returns, but how do you even get started flipping houses?
Consider the Neighborhood
The first crucial step when flipping a house in Denver is gaining a deep understanding of the local real estate market. To navigate this complex landscape effectively, it's highly advisable to enlist the expertise of a knowledgeable real estate agent. They bring invaluable insights into Denver's neighborhoods, average home prices, and market dynamics.
By collaborating with an experienced agent, you can pinpoint the right neighborhoods for your investment and gain a realistic perspective on property values. They can help you identify the type of property that aligns with your goals and budget. Additionally, an agent can offer guidance on the current market conditions, helping you make informed decisions for a successful house-flipping venture in Denver.
Think about it like this. If you are trying to sell a multiple-bedroom, two-story, single-family home, your target customer is going to be a family. What do families want? Good neighborhoods, safety, schools, access to food and groceries, parks, and recreation. So it's an absolute must for you to carefully consider the neighborhood you want to invest in. Some of the best up-and-coming neighborhoods in the Denver Area include Athmar Park, Barnum, and Chaffee Park.
Keep in mind though, that expensive neighborhoods come with expensive price tags. If you're looking to start your house investment journey with a lower-priced investment, search for houses in up-and-coming neighborhoods that you can put a dynamite renovation into.
Consider Renovation Costs
Alright, you've now found the perfect house. It has a great lot size, is in your target neighborhood, and has plenty of room for potential. Now you have to consider the scope and impact (to your pocketbooks) of the renovation process. You'll hear things like "You make your money on the buy side". Which can often be somewhat true. And you can lose your shirt on the remodel.
HGTV is great for some popcorn - but it is not great and gives you an idea of the price and effort remodels are. Oftentimes, I know a few, of the contractors you see are bidding to the lowest bidder and they get TV time to promote the business. HGTV costs will NOT be your costs.
You'll need to get the right team in place. I love a good DIY home flipper, but there are things that you should get good at before you do it for profit. Demo is something you can likely do, but if you haven't done tile before you might have a finished product that doesn't help you. Find a reliable contractor who can help you with the renovation process and an experienced real estate agent who can help you find the right property. If you need Contractor recommendations we have a few. Additionally, you may need to hire an attorney and an accountant to help you with the legal and financial aspects of the project.
Some Things to Look out for During Your Assessment?
A Solid Housing Foundation
Any Structural Repairs Needed - roofs, HVAC systems, plumbing, electrical, pools, etc.
Design Elements – house style, unique character elements, natural lighting, room sizes.
Room-by-room Costs – Use the 70% rule when calculating repair costs with your builder (paying a maximum of 70% of the after-repair value, minus the price of repairs).
Consider Your Target Buyer
Finally, you need to be prepared to make a profit. Once you've purchased the property and completed the renovations, it's time to put it on the market. Partner with a seasoned agent to guarantee a profitable return on your investment.
In thinking about the customer you want to market your house for, you should always consider their wants and needs for buying a home. Buying a home is a tremendous investment, and whether it’s their house for a lifetime or for a season, you want to present a house that will both delight and satisfy.
Research shows that amongst home buyers, the most wanted needs for a potential property are hardwood floors, updated kitchen appliances, and modern bathrooms. If you’re looking to target a Millennial home buyer, smart home features and open floor plans are a must. Considering the pandemic and so many working remotely, also having a dedicated workspace or home office is a feature that will absolutely make your property stand out. And if you’re selling to a family, incorporating a laundry room and storage space solutions will really go a long way.
Bottomline
Flipping a house in Denver can be incredibly rewarding and profitable. With the right knowledge and a great team, you can turn a tired, outdated house into a sought-after investment property. But it’s not for the faint of heart. It takes dedication, hard work, and patience. I know because I’ve been there.
Hopefully, these tips can help start your journey to flip your first house in the Denver, Colorado area. Make your house flipping dreams come true today! Good luck and happy flipping!
