Mid Century Modern Marvels & Appraisal Challenges in Denver, w/ Adrian Kinney

Adrian Kinney  0:02  

Then you get into issues of, you know, why is this one 100,000 More when next door was the same and it looks the same on paper? Well, this one has wolf ranges and fancy this and you know, high end everything on it. And so it's, you know, talking to the appraisers when you meet them at the property is, first of all key, make sure as a listing agent, you're meeting the agent or the appraiser there, because you really want to talk to him about the nuances that are there. It's also a fine needle to thread because you're a professional. They're also a professional, you know, if you're telling them, Hey, here's the value. It's like, hey, you know, I have a license, I'm also doing my job to not have to appraise this at the end of the day.

Derek Marlin  0:34  

Welcome to raising the flipping bar. My name is Derrick Marlon, and I've redeveloped over 80 properties in metro Denver. I've bought and sold 115 multifamily doors in Cincinnati, Ohio, and my team has done just under 300 single family rental acquisitions for our clients. On this show. My goal is to help you make more money, save you a bunch of time and create a well oiled flipping machine. Let's dive in. And if you want more information, head to fix and flip dot show.

Derek Marlin  1:03  

Alright guys, welcome back to another episode of raising flipping bar. I've got Adrian Kenny here. Welcome to raising the flipping bar. Adrian,

Adrian Kinney  1:09  

thank you for having me. I really appreciate it. Absolutely. So

Derek Marlin  1:11  

Adrian is with mid mod Colorado. And what I'm really excited about is to have you here to talk about not only the investment space, but how Mid Century Modern really plays a key role in the Denver Metro real estate market. Let's, let's kind of jump into your background. Actually, tell me a little bit first what you were doing before you got into real estate because you've got a really interesting background that I think a lot of our guests of yours would like to learn about.

Adrian Kinney  1:34  

Yeah, absolutely. So we're born and raised here. Went up to CSU for undergrad, go rams. So I'd have to give a nice little plug for him. There you majored in business with focus in real estate, which is a very niche thing that they have up, they're fortunate enough to go through it. And out of there jumped into property management, first of all right out of college. Great Crash Course in real estate. Did you know property management is not fun? Yeah. Dealing with everyone's problems all the time, from all the different angles. It's just a tough one. Yep. From actually moved over to the Denver county assessor's office. So I worked with assessing real property on the single family detached side of things. So I actually had a property background in taxes, and actually got my real, my appraisal license. I didn't know that. So I got that. So it's kind of now today really helps with clients when I have to talk to appraisers that I'm not just an agent, trying to get a value actually understand how the appraisal process works, and can give them kind of the background that I have for it as well. In addition to that tax background, you know, especially as values went up, I had a lot of clients asking me like, hey, is this an actual accurate value? Or should we be looking into this? Yeah, so it's been really nice to be able to kind of have those two backgrounds. And kind of my last thought of it was the state of Colorado picked me up to work for the State assessor's office, our Constitution has a certain amount of industries that are assessed at the state level and at the local level. So it's using a lot of density pro forma backgrounds on, you know, income, our allies and allies to get value for major corporations, airlines, railroads, telecom, we personalise out to the counties and then pass them on. And I also was doing the kind of teaching the classes to the appraisals offices throughout the Denver Metro and Colorado area for the 64 counties. Okay, so the backend team, kind of that appraisal teaching side of stuff 2015, maybe a year or two before really got into the whole midcentury thing about our first cliff, my house in Harvey Park, I fell in love with it started to sell a couple of neighbor's houses. It was just kind of that classic, you know, on the side agent market was going up. So I'll definitely give some credit to that. It was able to market stuff a little bit differently than most agents had before, really talked about what kind of house this was. And you know why it was significant? And who the heck was this cliff and a guy and why was he important? And why are they in Colorado? Yeah, really got that out, started getting crazy values. We started seeing an RV park and each one of these sales, of course brought people out of the woodwork. Sellers came to me and they're like, Hey, you live here, you got a lot of money for that house you want you want to sell it start to realize and then by about October of 2015, which we're coming up on now for my full exit from paid work from somebody else, right, jumped into this full time, have now done five fix and flips and the cliff may worlds have lived in three primary slow flips that we did while we lived in him. Sold 4050 Cliff many houses over the last 10 years. So it's been quite a journey. Definitely a passion side of things. It's not just that it's trendy. I actually love it live in a mid century house. I've done a lot of work on it. I've done all the houses I've done a bit of mid mod flips. So it's, it's a true passion might not just because, you know, somebody says it's trendy right now.

Derek Marlin  4:33  

No and I am we're definitely gonna dive into kind of the nuances of mid century modern but I do want to touch on tell our audience a little bit about you brought up a great point about appraisals and how real estate agents and real estate professionals can definitely give opinions on what we think the property is worth. From an investment side and from a flipping side we've got the ARV which stands for after repair value. We kind of tried to pick that number, but it's all got to be based on does the property appraise so that the person buying it can get a loan maybe just explain to our you know Audience What that entails. And I think that's a great skill set that you've got.

Adrian Kinney  5:03  

No, absolutely. And it's, it's even more nuanced too, as you get into unique properties. MidCentral being one of them, where their price points are, especially in Colorado, and Denver finally appreciated for what they are with their price per square foot is usually considerably higher than most of the classic Ranches are just an average house that's around them. So as I ushered the cliff maze, kind of up this giant price scale, there's a lot of brick ranches with basements around them that were technically twice as valuable because they have twice as much square footage, but they still have maze where the same sales price, making the cliff maze a 2x on the price per square foot. And it was a really tough thing for these appraisers to understand. Like, why is this house with twice the square footage going for the same price as this one that's half with? You know, no brick, it doesn't look as nice. It's got a whole bunch of windows that stick built like what what's the difference? The appraisal side, and this goes for all of them is, you know, it's a very boiled down system when you get to the kind of appraisal world. Fortunately, the appraisers today are checking off boxes for some of these another trend automate a lot of it on the Fannie and Freddie side of you know, does it check this does it fit these metrics, but the one offs are the well done, some things are really tough to do where, you know, there's formulas for fix and flips, you know, they go, you know, there's proper corners to cuts, and there's proper corners not to cut and some fix and flippers do cut zero corners, and some cut all the corners. And on paper, they're all updated and finished, then you get into issues of you know, why is this one 100,000 More when next door was the same, and it looks the same on paper, well, this one has wolf ranges and fancy this and you know, high end everything on it. And so it's, you know, talking to the appraisers when you meet them at the property is, first of all key, make sure as a listing agent, you're meeting the agent or the appraiser there, because you really want to talk to him about the nuances that are there. It's also a fine needle to thread because you're professional, they're also professional, you know, if you're telling them, Hey, here's the value, it's like, hey, you know, I have a license, I'm also doing my job to you know, have to appraise this at the end of the day. So it makes you meet up, I mean, that's really the the main point to get across is talk to them. Know, your comps, that's a big part of it. Make sure the comps are tight around the value of the house in the sense of the price per square foot is close, the square footage itself is close. It's the same style of house, you know, if you've got a four story, you know, stick built townhome, and you've got a ranch, not the same kind of property, even though the value is what you want from it, you have to make sure that they match the same kind of property. Yeah, make sure they're in the last couple of months, as he was probably no now markets been all over the board. I know we peaked in June of 2022, for most of the Denver Metro area, we got back to those values, probably the end of July of 23. But it was kind of a roller coaster through every one of those months that somewhere higher, somewhere lower, you know, but the trend line is we're back to where we were. So it's really talking to them making sure that they understand you know, where the values are at. They can't predict the future, unfortunately, in the appraisal world. So they have to look at historic sales, which is always tough in an appreciating market. And I know a lot of agents hate that part of it that, you know, gosh, what do we do, because everything yesterday just got under contract for 100,000. Until it sold, it doesn't matter. And then once it sells, then you can account for it going forward. As we had enough of a trendline, appraisers were actually starting to account and underwriting was letting them account for this upward projection saying okay, everything is appreciating, you know, what, 3% a month, we have three years of data, we'll let it fly now. Especially the beginning of this year, where you know, November, December of 22, was just a straight Cliff downward. They couldn't use that upward projection. For January and February, I had probably four or five appraisals that just weren't even close. Even with my background and talking to them, they just couldn't use any trendline adjustment on him. And that's a tough one, when you can't use that in a market that is appreciating. But historically, if you look at the data for three months, it's not appreciating Yeah, it was a tough one.

Derek Marlin  8:50  

Yeah. And that's definitely something that we look at. And I want to hear kind of your thoughts on this of people writing an appraisal Gap coverage. And so when we're really trying to teach our audience, okay, what's the best offer to take? I think everybody goes over the highest number, potentially. But one of the big points, especially as it relates to mid century modern that I would love to hear your thoughts on is an appraisal gap. And what that is and why that's really important. If somebody is evaluating which deals do I pick if you're lucky enough to have multiple offers?

Adrian Kinney  9:15  

Oh, absolutely. And those were a, you know, a big part of it. You know, I think it's twofold on that. The first part is, you know, as an agent, you should have a very good idea, at least of you know, what value should look like, obviously, at the appraisal side, that's your whole job is to just strictly do value. You should have a pretty dang good idea of where this would land. That's when you kind of talk to your seller of hey, I can confidently say you know, the highest sale here for this exact square footage was you know, XYZ, this is XYZ plus 100,000. Yeah. Which is essentially funny money because if you can't find a single comp, you know, within the tight mile radius, even if they'd let you go out a mile and a half or two miles from the subject property, and there's nothing out there, you're gonna not have an appraisal that's gonna hit exactly at you know what you listed. Get out because you were gotten sent your job, you know what you did you listen to it that the appraisal gap essentially says that they, the buyer will cover an amount and they can pick anything from one penny to infinite number up to what they're comfortable with that they actually have cash for. And it's in addition to their downpayment, unfortunately, especially for these first time buyers, this is what made the last three years so tough is, you know, they barely had five to 20% down, then maybe they're looking at a gap of 20 3040 $50,000. And that's that difference between the banks appraisal saying, Hey, this is worth, you know, $100,000, your offers for 150, we're only going to lend on the 100,000 plus your down payment. So that 150, you've got to find $50,000 somewhere. And that's where buyers were having to put into their contracts and say, hey, we'll cut we'll cover this money, we've got an extra 50k, maybe there's some parents, there's extra funds, maybe they're splitting up their 20% and doing 10%, down and 10% for that gap coverage. But essentially, in a very competitive market really helps that seller feel like we are going to close it that 150 The Colorado contract default language for appraisals is if it doesn't hit, the buyer gets to submit an objection. Here's the appraisal, the seller and buyer can negotiate a new price, maybe they get a couple extra 1000 bucks out of the buyer, everyone moves on when you've got 20 offers and everyone's going to cover some type of gap. Having no gap coverage makes it unfortunately, a weak offer from the buyer. And the seller will then lean towards somebody that says yes, we're gonna guarantee that we're gonna close at this price, even if the appraisal comes in at $1, we'll close it, you know, a million dollars, we'll cover the difference. It's very tough as a buyer's agent to you know, tell your buyer, yeah, you got 20%. But also you need another 100k to buy this house because it's not going to appraise. And especially if things were going up so quickly in 20, in 2021, you basically had to say, you know, you've got to have that 50k, or we can't bid on this house, it's it's not funny money. And that kind of cheese into that second point that a lot of folks are worried that all this rising and prices was going to collapse, because it was it wasn't real. All of these offers that got accepted had some type of cash backing, unfortunately. So this whole, you know, might be foreclosure wave type thing, I don't know, it's funny money. I had clients that were bringing 10 to I think that biggest gap of about 80k that they were bringing cash to the table above their, their, or their down payment amount. And you know, the bank was like, cool, you know, will appraise at this number and great if you want to close for more, you bring the cash and they brought it. And that's at that time, you know that 80k was eaten up in about six months, and then they had the equity for it. Right. But at the time, that was actual money. It wasn't just like, yeah, sure, well, you know, the Oh, eight years where they're like, Yeah, that's worth you know, 4 million, why not, you know, somebody down the street sold for two. So this is twice the square footage. So we'll give it 4 million. They weren't doing that anymore. So it was really just it was hard cash. It was 20% it was super qualified buyers, especially during COVID When they were checking your job hours before closing some of these lenders were calling and being like, Hey, does Joe Blow have a job here? Because if they don't, we're gonna terminate this whole deal and blow it up. So those you know, as weird as that time it was they were actually very, very solid buyers and a lot of cash put down for making sure these gaps were covered. And we're still seeing them now. Not 100,000 over not 200,000 over most of the thumb seen isn't that kind of three to 7% over rain. Yeah, I agree. And it's still gap though a lot of these houses were at the max and you're seeing it but I'm finally seeing a decent chunk that there's you know, a sale, eight blocks over that you're like, oh, actually, this one's pretty dang close. And it was under what we said so we're not as worried about gap this time. Unfortunately lost an offer this weekend on one was 15k over list price. But listing agent wasn't concerned about Gap coverage, they had us a sale that was pretty close within that 15 range. And they were able to take it and you know, the winning offer didn't have Gap coverage. And we didn't either, but we were both over list price. There was finally a comp to prove that were before every time was the highest sale. So it is it is shifting, there's still some gap coverage. But it does make it tough. And I think that's why we're seeing a lot of these lower average prices is first time buyers are finally getting into the market. And they're able to buy at that 550 range which those of you outside of Denver unfortunately that's very cheap house and others credenza metro area Yeah, but they're actually able to compete this time, which is really nice to see that we get kind of that first timers into this marketplace to start building wealth in real estate.

Derek Marlin  14:21  

Yeah, and I think the good thing is we've jumped into some pretty kind of fun at you know, I'm gonna call them advanced tactics and advanced terms but I do want to back up just a little bit because it's your area of expertise and your sweet spots so maybe give our audience a little bit of a definition of truly what is a mid century modern home. What are some of the tell tale signs that somebody's walking into a mid century modern home and then we'll get into why are these things selling for a premium both that you've got to pay for Super beat up disastrous homes. And then to your point on the cost per square foot basis? You're like how in the hell are we able to sell it for this expensive but it happens all day. So maybe just give our audience a definition of what it is. And then maybe some of your favorite architects and designers too because you've got great experience that that a lot of people in metro Denver don't have

Adrian Kinney  14:59  

will think of it much there, you'll see in an hour it becomes it became such a buzzword in the last you know, 510 years this whole Mid Century Modern you know, the furniture from the era the reproduction of the percolated you know CB two and Crate and Barrel and West element you know, it's everywhere it's this you know, this slim furniture, wood furniture, it's sleek lines, you know, we're heading to the 70s and 80s. Now with furniture it's it's getting pretty bulky. But everyone used to us and they're still are using the, you know, Mid Century Modern their description and you kind of look at it and you're like, sure that might be it's become pretty diluted that Yes, folks are like, alright, Where's, where's the line here for it? Denver Metro area. Specifically, we're about 1950 ish to about 1969. For the date stamps is kind of the first easy marker, there's a couple on both sides that transitioned out of that. But that for the most part is, when I'm doing the search, I'll kind of start with that range, say okay, we'll start here for it. When you get into the house, or even before you get in, it's that low slung roofline, low to the ground. They were built in this modernist style. Modernism, one of the key elements is connection with the land. So thus not a large, something, it's low, it's sleek, you know, it disappears, it's supposed to have kind of an earthy tone to it, it's really supposed to connect indoor and outdoor. So then as you get in, you do have that indoor and outdoor, you have glass walls, floor to ceiling walls, in most parts of the house. Large living spaces, very small bedrooms, again, it was focused on the livability. So if you were entertaining, you could open up the space, the square footage is typically a lot smaller, but the livability is a lot bigger. A lot of the 12 to 1500 square foot homes of the Mid Century Modern that are true MCMC they live like they're 15 to 2500 square feet, because you've got courtyards, and backyards and glass walls and doors and every single room that go outside. Those are really the aspects that make it feel like and truly our mid century modern lives long roofline, typically smaller square footage earthtones a lot of wood stone, those things are in those houses for the most part, if there's still original and intact, glass walls connection outside. And again, those weren't there at the time, they were novel concepts. And now everyone's like house is a great modern house. And truly that's the modernist house because it was this idea and concept from in the 1950s and 1960s. On how to start living the time it was those serious craft homes there were the two story ones that showed up on the ordering from the Sears catalog, shut up on a train you had the brick house, unloaded it and built your little you know two story home that connection outside was zero, you had a front door and you had a back door off the you know really crappy patio that got built on and that was kind of your connection outside where the modernist houses have, like I said, courtyard side yard door out of the kitchen door out of the main room door out of the primary that really connects and makes that square footage that smaller and petite feel like oh my gosh, this thing's twice the size that it actually is. Those tend to be kind of the the hallmarks of you know, Mid Century Modern is and vaulted ceilings to go to that low slung roof, weirdly enough is that there's no attic space. So it's a little weird in Denver for installation, right. But they they function pretty well here. And once you kind of start picking up on those main hallmarks, you'll see quite a few of them around Denver Metro area.

Derek Marlin  18:14  

Yeah, that's something that I think is really interesting is that over the last 10 to 15 years, everybody promotes the open concept. And we have to remove walls, and we have to blow stuff out from either pre 1950 Or from 1980. On that you right modernism had that nailed out of the gate from the 50s 60s. And a little bit of the 70s. It was open from day one, you've got some structural components, but the way they built that with the A frame, it just accommodated for that anyway. So it's a cool kind of transition that people already saw that coming out of the gate. Oh, yeah.

Adrian Kinney  18:39  

No, it's great that they had that and it you know, it's we're kind of seeing some of the rooms closed back up. And most of the time, the only thing you have to touch in these MCs homes is the wall between the kitchen and the main living space. And now I know that's the like, some people want that back. Outside of that, you kind of know so those were half walls anyway, you can put it up, take it down. And otherwise, like you said, they were already open concept. They were already you know, connecting all these rooms together. And then there's usually two main spaces the bedroom wing and then the living room wing. And yeah, the bedrooms are definitely tight. But it's one of those that like, you go to the bedroom, you go to sleep. Yeah, entertaining, you have this much bigger space rather than kind of that 90 is Hallmark where we got the you know, the sitting room, the smoking room, the library all within your primary suite, a known 5000 square foot house and 3000 is in the primary where you're like worthless space. What do I do with it? Yeah. And so, you know, sizes, you were kind of going back to that modern example, where the proportions of the bedrooms are getting appropriate, taken out for sitting rooms, instead of maybe having a small space and putting that space back into actual livability area in the entertaining area, next to the kitchen.

Derek Marlin  19:38  

So kind of thinking about our audience, which is primarily people that are doing fix and flips they're doing rental properties. They're leaning on the investment side, do you have a percentage or or I don't want to call it formula, but maybe let's use the term percentage. If you've got if you've got simple comps, on fixing up a property and selling it. I think we can all say there's a handful of mid century modern prop Pretty easy. It's in a one mile radius. They're selling for 700 grand, you're feeling pretty comfortable, you can sell for 700 or a portion better depending upon your level of finish. What do you do, whether it's for you or for your clients, if you've got that lucky mid century property in an neighborhood that's maybe not predominantly mid century, and the comps are at 700. And you've got this beautiful fixed up house, and it's similar in square footage at similar bedrooms, do you have a percentage that you that you feel like you can advise clients that say we could get X percent more or kind of maybe try to put some math to that if you can? Yeah,

Adrian Kinney  20:31  

no, we don't have I had to do this. We had a really bad appraisal. Customer two years ago. One off house, absolutely stunning, custom tinted green brick inside was somewhat updated, and the parts that were updated, were really well done. Had a basement and basements are very uncommon in mid century modern. So to get this extra square footage one was unheard of. It wasn't too far from Arapaho acres and those that are outside the Denver Metro area. Arapaho acres is one of the most known Mid Century Modern enclaves here in Englewood. This house was within that mile or so range from it. I guess diving even farther into this mid century moderns within enclaves themselves and enclaves meaning every street and every house within that boundary of streets is a true mid century modern house, versus a one off house where every house has a ranch and maybe the fifth house in is this really cool, Mid Century Modern, both have more value than their neighbor, classic house, the Enclave itself has a much higher value percentage as the surrounding homes, the one off has a higher just not as high as within an enclave. Ours was the one off, but close enough to the Enclave. So I did a whole bunch of research because the appraisal came in about 90k Low Oh, wow. It was also on this private park, dead end street. Just a lot of things that again, as an appraiser I knew had value. Really hard to say that oh, yeah, dead end street is worth you know, $5. And private park is worth $16. You knew they're worth more, you just don't know how because you don't have an exact comp that says, Oh, here's these two, we can compare. Take that out, boil it down. So the the value of found and I did you know, Harvey Park and some of these enclaves where they're known for mid centuries, and I took houses that were an MCM houses that were exact ranch without a basement and dollar for dollar compared them and said, Okay, what's the price per square foot on each of them? And wrote this basic dissertation for this appraiser to be like, nice, I understand that you you have a job to do. I have a job to do. But I think you're wrong. And here's why. And I get data. Yeah, I didn't ask for it. Right? Explain it. It came out to be in the Denver Metro area, about 12 to 15%. Oh, no, as a direct comparison of just price per square foot on things. Some enclaves got as high as 18 to 25%, the minimum was around that 10% range. That's great. And again, that's a very boil down as you get into enclaves again, like I mentioned, they get a higher price per square foot difference, but as an average, saying, Hey, here's something that's a mid century modern, here's something that's not differences, somewhere in that 15 ish range, on average, which plays really well. And, again, there's no Mid Century Modern adjustment number, we finally gotten to a point where enough of these have sold comparative to their ranch counterparts that are identical, that appraisers do understand in Denver metro, and surrounding, there is a value held on MCM, where somebody may pay more as a price per square foot. Because they're art pieces, essentially, you know, they're they're one of a kind, there's not many, there's a scarcity factor. So again, kind of jumping way back to your appraisal question. When you're talking to appraiser and you have a unique property, it's making sure that they know the uniqueness of the property and, you know, reminding them that it's, you know, a Victorian with some really cool heritage in it, or to had all original things left in it that, you know, you preserve, somehow that, you know, would work from that era was old growth and handcarved, you know, you preserve that, that has some value in it. Same with mid century, you know, keeping some of those elements, I mean, some of the stuffs got to be updated, you got to get plumbing, electrical, you know, get some of the things in, but preserving it, you're starting to get folks that appreciate that original feel and that value that it comes with that. It's quality materials, it's tough to you can't get today without blowing your investment budget, by all means, you know, if you try to reproduce some of these houses with the tongue and groove ceiling, the wood ceilings and the beams, you know, it's $100,000, to rebuild that today. And you don't have the budget for that for just a ceiling type thing. So that's, it's in that range. It's over. It's not a science of, hey, this is in this area, here's the cross street that's, you know, 20,000 more because XYZ it is more and I think it's really talking with that appraiser, when you meet with them or talking with their seller about hey, here's the true comps of it. Yeah, you know, across the streets less and this is why I'm saying it's worth more. It's a more it's in that 15 inch range. Sometimes even more than that, and again, it goes back to that artfulness of the house It's a masterpiece you know, it's even if it's a cliff May which is technically attract home here in Denver, right and there's Duck built, they are glorified barns the way they're built. But there's some historical aspect to it. You know, it's a well known national architect who actually never was an architect. He just got allowed into it. He was just so good designer include me. He's one of them. He's one of my favorites from the Denver Metro area. He just the way he nailed things down, he spent a lot of time in the board room designing these houses. When they were built on site. They were actually built very, very rapidly. There's some old YouTube videos out there about how quick the foundation was poured and how quick it was done. It's because he didn't make it a scientist that here's exactly where this four by four post goes. They were tip up siding so that the siding went up. There wasn't every 14 or 16 inches, there wasn't a stud it was prebuilt, six by six panels. And they just went up on the outside the roof it perfectly. They were all within you know, half of an inch every house, they were identical. Yep. Because he spent years in the boardroom saying like, Okay, here's what we're gonna do make these for the masses, these masterpiece houses. And they worked out and they were great. So it was done for that reason was my favorite, he kind of made it for the masses of you know, average Joe with 1950s could buy these really cool houses. Fortunately, the whole modernist movement was on the forefront of house movements, right? We found some old documents FHA, and VA didn't really think that their notes that they were giving out to the mortgages, were gonna get repaid on the second purchase, they weren't gonna be able to resold so they were like, I don't think I want to lend on these, you know, modernist houses anymore. We need to go to these ranches or to stores these classical homes instead. And that's in most areas, California is the exception. They kind of petered off after that 1969. Okay, switch to bilevel straight levels, two stories, and the whole monitors thing fell off. A lot of it was driven by the main lender, which was the government at the time, FHA and VA and just kind of kneecapped them. And part of the scarcity comes from the fact that they asked them not to be built because they wouldn't lend on him and right, thus, you get the one offs that are so cool, but to somebody had to custom build it, because at the time, they couldn't do the tract homes like they were, where we have Christiana Park, we have Linwood again to mid century neighborhoods in the Denver Metro area. We've got Arapaho acres and raphoe Hills, there was a couple other ones, but they're pretty scarce as for long cliffs, because at the time, they were like, I don't think these are going to be worth it after a while and nobody's going to want to rebuy these houses, they're there to weird.

Derek Marlin  27:14  

Yeah. And that's the way we try to help our clients and our students and really just the general community of there's the great opportunities with flipping Mid Century Modern properties. And then there's some of those things you got to be careful of, and you brought up a great point, Christina Park, is a nice little pocket or enclave I love that term, definitely gonna keep using that is that you just the cost per square foot is astronomical. And the cool thing is, is normally when we're training people, we're saying, Hey, we're spending between 60 and $75 per square foot to fix up traditional properties. But the cool thing about mid mods is that yes, you need to lean towards that 75 Because it needs to be a beautiful end product. But sometimes, and we always go to Windows, you normally want to replace older single pane windows, but in mid mods we typically don't because of the exact connection that you just described. So it's really knowing and working with experts and working with people that know what to take out, and what to update and which things to leave alone and not touching all those beautiful custom windows with different you know, trapezoid style, you know, shapes and sizes. I mean, it's just it's such a cool thing and the cool end product and you don't want to take those out, we want modern origins, the modern updated kitchens and bathrooms to fit period specific styles and tastes but you just don't have to gut it. So it's nice normally for looking at that house, you're going Oh man, I'm gonna spend, you know, 200 grand to have a million dollar sales price point in mid months sometimes. You know, asterik you don't have to do that. Are you finding that when you're doing your your houses or you're advising your clients?

Adrian Kinney  28:36  

No, absolutely on the you know, the flip side didn't my first got on doing the cliff Mays Harvey Park in just in South West Denver. Never was a great area never was a bad area. It just existed. It was an awesome spot. And it happened to be where all the cliff Mays in Denver majority are there's one outside of it. And they fell into what I call the kind of the big box, Home Depot, Lowe's, where whatever was trendy at those big box stores you put into the house. And this goes to your point of Victorians of style. It's centuries of style. You know, Ranches are a little more agnostic that they can be a little more open to things. But you know, doing them I always big Scrivens is you know, no shaker cabinets in the mid century modern. Yes, very easy. There you go. It doesn't cost you any more. Yes, listen, people please have not had the mid bots. Yeah, and it's, it's an easy it doesn't want to go to the store and you pick out you know, the fixer and flip special. They're the same price or maybe $1 More whatever, but the flat front, that's what you want to go for. And it's no small thing that you kind of want to find for it. And it does repay on the price per square foot. Some of these kind of super modernized or contemporary iced houses that we see that are true mid mods that get you know, all of the wood paneling painted and you know, sure some of the paneling can get put over it might be super dark. But that paneling is old growth. A lot of that was Philippine mahogany that got over forested and now it's extinct and some that's just super rare stuff to have. So it's incorporate and kind of the new and the old and I always say that grandma's house can be trendy and not trendy, but it fits the style of the house. You know, Victorian again, I know farmhouse got super trendy, and again, branches are shoved in there. Victorians stopped putting farmhouse individually like they have a soul and it doesn't seem to fit very well. And that's what we're seeing in the marketplace, whether it's a buyer or a fixin flipper, that you're buying these houses and you want to make a certain style and you buy the house, if you stick to the style of the house, you get returned in spades for it, that again, flat fronts doesn't cost you more, but you do it for a mid century modern house, you have a bunch of wood paneling and Your Tongue Groove ceiling again, that wood ceiling is still exposed. You don't have to paint it white. Yeah, you can keep it you know, there are some ways you can sure maybe paint a paneled wall or two white in that room. But keeping that original ceiling there is worth something because it's so unique. And again, to reproduce today. It's very expensive, thus homes aren't doing it. So there's ways to again kind of thread that needle that says yeah, you know, XYZ, you've got to be updated. But these things should probably stay you know, if you've got a really cool moss rock wall, and there's one of them, it doesn't make it too dark, no need to paint it That's again part of that Earth modernist feeling that really makes it pop and be different. And that's what kind of folks are looking for today is you know, if you completely take the soul out and make it you know, the classic grays of everything. Great has been overplayed, but it's also overplayed in nice homes, again, a few Gray's out a Victorian house I showed on the wash park at 850. That was a steal. It's been sitting for almost two months. Yeah, you're right. And it's because they kind of lost every bit of character. All the brick was painted white. Every inside was dry walled over, there was no brick. And so it just felt like, yeah, you happen to be this old historic home in wash Park, and it just didn't sell it. Yeah. And it was nice. It was great. It had the amenities you don't usually have in those it actually had four bedrooms had a full on suite in the primary. The basement slash cellar was finished out, you could do a lot of storage. So it was checked all the boxes. But my buyers were just like, why would I pay? You know, this 850 Number? Yeah, it's washed Park. But I'd rather have this historic home next to me that might be a little more dilapidated, but it's got the character Yeah, it's got that original wooden and it's got XYZ that just make it feel like it's a true, you know, Victorian house. thing goes for the mid month, it's, you know, do what you can to preserve what you can in those windows being one of them weirdly, I have buyers that look at it that you know, most of the windows of just kind of the square ones can get replaced when you get the full panel floor to ceiling windows. buyers don't necessarily see it as a negative if it's not been replaced. Some of that is the price tag, it's transferred 10 times in 60 years, and nobody's touched it. Yep. Because that window might be $5,000. For a single window. Yes, you're there for 30 years, sure how bad it replace it, make sure you get another point for doing stuff, do a thin bezel and bezels, the part that goes around the outside of the window that has the fins that go into the frame of the house. Luckily, they actually contractor grade for the most part, when you have very thin bezels, you want to have that because it makes the window feel more like it's you know, just this air between inside and outside. When you get the thicker bezels, which is usually the higher end windows, it makes it feel like it's an actual window and you're kind of disconnecting the inside and outside. But again, it's those small little things like that there's old school glazing methods where you just by the window, and they kind of put stoppers around it and glaze it in that you could do that are not as energy efficient as regular windows. But those contents are the right thing to do. And it brings you closer to today's and you get a double pain out of it. So expensive. And so those are Yeah, what you're doing a fix and flip on them. Some of those major windows, especially the upper clerestory windows out of those triangle windows are awesome. No need to touch them. If they're like they are and sure if you've got a huge budget, and you can do it, maybe it's a living homeowner versus a flipper have had it. They don't really add or subtract value. They're just kind of accepted that you've got an old home and you've got some single pane windows here. And they're sure if you've got a standard one, you can go pick up at Lowe's that you have added just get a small bezel put it in that frame. But those Florida ceilings, you know, unless you can do them right there. Finally our most most buyers don't really care. Nice.

Derek Marlin  34:04  

No, I think that's great insight. The good news is we could go for hours and hours and hours. But I've got two final questions for as we kind of wrap up and wind down this one. And thank you so much for joining us. This is definitely an education. I think everybody in our industry talks about the best deals in the home runs and we all made all this money flipping these houses, whatever. give our audience a little bit of a deep dive into a deal that you've done or maybe for your clients where things just did not go right and maybe the main reason why things just kind of went sideways.

Adrian Kinney  34:30  

Yeah, no, absolutely. So all my fixin flip except for one condo, our very first one was a living that we did. We're all mid century moderns. And actually have a very unique model that because flipping isn't my primary business. My primary is the buying and selling and being the broker for the clients. I still get approached or I go to a listing appointment and I say Hey, crap, this is actually a great deal for you and me. Why don't I just give you this cash lump sum you can stay here for 60 days. You don't have to spend a penny to you know, get it up on the market. Don't do this, you don't have a double commission looking at the same price without commission. Because I've reputation that field, I don't buy them cheap per se, I just get them off market, I will still pay market price for them. I also always have the buyer for the houses that I purchase, right, which is again, very odd that usually you're like, Okay, hopefully we can find a buyer. I won't pick them up unless I know I've got a buyer. And then I can do a kind of interior remodel for what they want. The one single house I didn't have a buyer for was the one that went awry. My contractor that I had, it would have been their third one they would have been doing for me. The one prior to that was my biggest success. We had it done in 32 days, it was 75k in profit. It was just it was seamless. It was great. Yeah. So I said, Hey, get another one is a month later have at it. So I kind of let them have their own space. Because at last you were just phenomenal. I checked in, you know, every so often. And towards the end, it just went completely downhill. And this is again, I know everyone's pinch point. Contractors. Yeah. It was solely on the contractor side of things didn't go so well. And they did a really crappy job. And so we had to every corner was cut. And it shouldn't have been, you know, I had the budget for you know, XYZ to be cut, but not every single corner, right. And so by the end product, it was like, Wow, this looks really not great. And it sucks as against my reputations and the cliff Mays, it was a nice one, because it had a small addition to the living space was a lot bigger than most of the cliff Mays. It was a two bed, which says folks know, in a detached house, two beds are a little bit harder to sell, we did out of Bath. And so it was a two two, but it was still doing today a two bed market was hot, but apparently not hot enough to overcome the great work that was done on it. And that was the issue was it was the contractor side. Some of it was my not checking in as much. But I had two previous deals with them that were just phenomenal. And I you know, they're the GC for a reason. I know, I have to be the backup GC and I have the ability but didn't go well. Took a little haircut on that one. You know, in the whole realm of things. I'm still very positive in the six that I've done, of course, but that one was it was a tough one that was like, that's great. And in our personal life. We were you know, buying a new house, we were moving and just a lot of pieces that was like I just got to unload this. So, buyer, that one got a pretty good deal. Yes. Yeah, there was some stuff to probably cosmetically fix up afterwards. But you know, even as that would have been my fourth Cliff made that I did and I'm was very good at them. And it's still just want to ride and so kind of tiered investor clients. Even if you're too professional, I'm sure you come across it. Yeah, every so often, you know, to do this daily, there'll be a bad one. And you just gonna have to roll with the punches and fix what you can and get it back on the market when you can. Sometimes it's a loss. Can't can't win them all. But

Derek Marlin  37:44  

you tried to know and I love that context, because as I said, everybody kind of talks about the rockstars and these amazing deals, but it just, it happens. We all lose money from time to time. You know, it's just part of the part of the business part of the game. Well, Adrian, it's been great having you on raising flipping bar, I would love to have you just kind of end and close out with share with our audience how they can get ahold you where did they contact you? You know, give us a way to track you down.

Adrian Kinney  38:06  

Yeah, thank you. And I really appreciate you having me on here. This has been a great time. And I always love chatting with you. Online, I've got my Instagram is probably my biggest connection point, like to post listings that are around here and my own listings and kind of give some historical context and post which is on Instagram, the handle is at mid mod Colorado. So for an Instagram, you can look that up. And then I've got a lot of historical stuff about the neighborhoods and previous sales I've done in fixing flips I've done on my website, which is www dot CEO mid mod homes.com.

Derek Marlin  38:37  

Okay, awesome. Adrian, thanks for joining us, and we'll catch you on the flip side. Absolutely. Thank

Adrian Kinney  38:41  

you so much. Thanks.

Derek Marlin  38:43  

Thank you so much for listening to raising the flipping bar. My goal is to help you successfully and profitably redevelop properties in competitive markets. And I encourage you to listen to some other episodes on this podcast. If you're a new investor, make sure you subscribe or follow raising flipping bar on your favorite podcast platform. And make sure to share this episode with somebody you know would enjoy it had to fix and flip dot show to stay up to date with future episodes of raising the flipping bar. My name is Derrick Marlin and I'll catch you on the flip side