MARKET SPOTLIGHT: Investors Still Finding Success in the Middle
DENVER, COLORADO
Denver is still one of the best markets in the country. It’s very pro-landlord and we’re seeing such low vacancy rates.”
WILLIAM BRONCHICK
The number of total distressed sales as a percentage of total home sales in the first quarter were down 7.6 percent on an annual basis. Properties with foreclo- sure filings were down 16.37 percent from the previous quarter, down little more than one percent on a yearly basis as of the first quarter. Bronchick said that local investors working with either a buy-and-hold or flipping business model are finding deals. However, they are also facing competi- tion from investors coming in from other states, and other countries such as Canada. “Buy-and-hold is definitely a good game still. Rents have no end in sight,” he said. “On the flipping side, it’s tougher to move homes on the high end as fast. It’s a matter of buying right and selling at the right price.” Inventory levels, which fell with the market crash, are now back to around half of their norm, Bronchick estimated. From an investor’s perspective, he looks for properties needing some work. “Usually the ones we’re looking at are not in salable shape. We’re not competing with retail buyers because they’re looking for properties that are fixed up. It’s also taking longer to flip because finding contractors is tough,” he said. For the fourth quarter of 2018, ATTOM reported that total flips in the Denver metro area accounted for 6.2 percent of all home sales, a 19 percent increase from the previous quarter but down three percent from the same quarter in 2017. KANSAS CITY: ADJUSTING TO THE MARKET Both continued population growth and low unem- ployment in Kansas City has been a draw for investor John Wiley, a principal at TheNotePartners.com., over the last 15 years. Even so, he believes now is time to change his investment strategy. Wiley, who considers himself first and foremost a buy-
and-hold investor, has also done flips. But as in many other markets around the country, inventory is tight. So, what worked for him three years ago will not work today. “You have to keep making adjustments,” he said. “It’s a little tough to be flipping right now. There’s very little inventory left on the MLS. As for buying at trustee sales on the courthouse steps, I’ve watched the market tight- en where trustees are raising the minimum bid.” As a result Wiley has decided to stop flipping proper- ties at least for the remainder of 2019. “There’s a lack of good inventory. In order to be suc- cessful you have to start adding little artisan touches that make the house unique. If I’m going to flip, I will do a good quality flip,” he said. “Investors are overbuy- ing right now. Margins are too thin for me. You can’t get discount pricing.”
28 think realty housing news report
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