Are there deals in Centennial

[Brent Lenderman]

I want to implement the BRRRR strategy in Centennial/South Denver/Littleton and buy properties from distressed sellers at 30% below retail less repair costs. Is this a realistic expectation in our current Denver market? I want to send mailers to a certain neighborhood near where I live in Centennial but I am wondering if it will be an exercise in futility. I am planning to offer cash and a quick close, but it seems like anyone with some allowance for time can get a better deal. Are there any distressed sellers in this market? Should I shoot for 20% below retail?

[Bill S.]

@Brent Lenderman properties at 30% below retail less repair costs are few and far between (read non-existent) in our current market. What is the price point that the average home sells for in your "certain neighborhood"? Think of it this way. The average SFR sale price in the Denver metro is about $450,000. 70% of value is about $300,000 less repairs. Thinking in terms of a complete redo, you would need to buy it for around $250,000. Not likely to happen. Could it happen? Possibly.

In the cookie cutter burbs, I have seen lots of deals around 90% of value. Value is predictable and construction methods were standardized so there are lots fewer gotchas than in the old parts of town. Another thing to keep in mind, the big volume flippers have money, systems and people in place to execute the repairs at about 50% of the cost and time that the average guy off the street could do it for.

I found the response rate for direct mail to be abysmal in the burbs. Less than 1% and wasn't even able to do one deal after mailing about 5,000 pieces over the span of about 6 months. Perhaps it was operator error but I have been able to do deals in other areas using similar tactics. 

Let us know what you decide and how it goes for you.