Deal or No Deal? Flipping in Longmont

My guest for this episode is Derek Marlin who does fix and flips. This will be the first in a four-part series with Derek talking about deals he’s doing as well as deals he’s not doing. In this case, he chose NOT to do the deal. He ran the opportunity through his spreadsheet, and it did not pass the test. This is more common than not; he analyzes 8-10 properties for every one that passes the test.

A couple of months ago I started doing Deal Analyses on investment properties here in Denver, focusing on rental properties. After talking to friends who were also investing in Denver real estate, I decided to bring some of them on the show to do deal analyses on the deals they were working on.

My guest for this episode is Derek Marlin who does fix and flips. This will be the first in a four-part series with Derek talking about deals he’s doing as well as deals he’s not doing.

This deal analysis examines a wholesale deal in Longmont that involved a significant full house gut, reconfiguration, and rehab. Derek was contacted by a prospective client about a Partnership Flip. In a Partnership Flip scenario, a client brings the deal, and Derek determines the current value or “as-is” price. Elevation funds the rehab, manages the contractors, and handles all details. The client and Elevation do a 50% / 50% revenue split.

Whether it’s a deal or no deal, they are both great learning experiences.

Three Learning Options!
  1. Listen to the podcast “#176: Deal or No Deal? – Flipping in Longmont” on the Denver Real Estate Investing Podcast
  2. Watch the YouTube video (at the bottom.)
  3. Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast or video.

Client Deal Analysis

Derek’s client found this potential property and sent Derek his analysis:

  • KEY STATS
    • $315,000 purchase
    • $95,000 rehab
    • $525,000 ARV
  • Wholesale sourced
    • 10 Day close
    • $5k hard earnest
    • No sewer scope
  • Comps
    • 4 deals $453k-$590k
    • 11 months to 1 month
    • Top two comps:
    • $510k & $590k
    • 4/2  and 3/4 layouts
  • Projected Profit
    • $55,081

The spreadsheet screenshots below are from Derek’s Flip Deal Analyzer spreadsheet (free download.)

Flipping analysis spreadsheet

Elevation Deal Analysis

After Derek received the client’s analysis, he did his own analysis:

  • KEY STATS
    • $315,000 purchase
    • $10k,000 rehab
    • $10,500 contingency
    • $500,000 ARV (Max)
  • Rehab Takeaways
    • 100+ year old home
    • Every major system shot
    • Asbestos
    • Permits needed
  • Sales Analysis
    • November listing date
    • 3/2 layout not likely
    • COVID risk/reward
  • Comps
    • 5 deals $300k-$453k
    • One common property
  • Projected Profit
    • $5k LOSS BEST CASE
Fix and Flip analysis spreadsheet

Outcome: No Deal!

Based on the numbers and the results, this is no-deal! Onto the next one.

Flipping Academy

Elevation is hosting a 2-day Flipping Academy in Denver on July 23 and 24, 2020 and limiting the size to 12-15 participants. Denver Investment Real Estate followers can use the promo code DIRE to get bonus one-on-one flipping consulting hours.

Connect with Derek or get more information on the next 2 day academy in Denver on July 23 and 24, 2020.

If you have a property you would like to run by Derek for a partnership flip, reach out.

YouTube Video: Flip Deal Analysis – Longmont

Analyze Before You Buy
Start Evaluating Properties Today with Our Free Toolkit
In a rapidly changing market, having the tools you need to help you analyze the data is critical. Know what the numbers will look like ahead of time so you don't buy a bad deal. Our toolkit is designed to help you thoroughly analyze any kind of deal so you can invest with confidence.
Start analyzing your Colorado investment properties today
Rental Property Spreadsheet • House Hacking Spreadsheet BRRRR Calculator Spreadsheet • Fix and Flip Deal Analyzer Investing Maps • Rehab Pricing Estimator
Start analyzing your Colorado investment properties today
Rental Property Spreadsheet • House Hacking Spreadsheet BRRRR Calculator Spreadsheet • Fix and Flip Deal Analyzer Investing Maps • Rehab Pricing Estimator
Authors
Chris Lopez
Chris Lopez is a Denver area real estate entrepreneur and investor, as well as the host of Bigger Pockets’ House Hackerz and the Denver Real Estate Investing Podcast.
Similar Post You Might Also Like
Deal Analysis - Denver
How This Investor Still Lives for Free
Jeff White joins us to analyze his 7th house hack—just one away from his ultimate goal of owning 8 properties!
Deal Analysis - Denver
How to Combine House Hack Strategies to Live for Free
One of the great things about house hacking is its versatility—house hackers aren’t locked into just one strategy. In this
Sign Up For Our Newsletter
What do you want to learn today?