Partnering for Profitable Flipping

Jesse  0:02  

That's where the academy was in November 2020. This deal came across our inbox December 2020. So a couple of weeks, a couple of weeks after, and yeah, we reached back out. And it was an excellent opportunity to partner with somebody like you and learn. And we, we were still working full time, we had a project that we were working on, we just didn't have the resources or the time to do this one on our own. And it was just the perfect, perfect opportunity to partner with you. And it was a massive project. It was Yeah. 5000 square feet, seven bed, four bath pool. I mean, yeah,

Rachel  0:36  

we basically Jessie could not stop thinking about this product, this house came into the email via a wholesaler. And he did not sleep for like two days. He was like, we have to do this Rachel. And I was like, Jesse, this project is massive. We don't have the time. We don't have the resources. I don't know how we're going to do this. And he was like, we have to figure it out.

Derek Marlin  1:01  

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. Hey guys, welcome back to the show. We're super excited for another episode of raising a flipping bar. We've got our friends and guests, Jesse and Rachel from Jane, our homes. Welcome. Thank you. Absolutely. So definitely stick with us on this episode, we're going to talk about our most successful partnership flip to date, where we made just almost 180 grand total. And we don't say that to brag, but we just will talk about the good old days of 2021 and how the market has shifted. But stay tuned for how we're partnering together so we can both make as much money as possible. Have fun in the meantime, and we're going to jump right in. So again, guys, thanks for joining us.

Jesse  2:03  

Thanks for having me. Absolutely.

Derek Marlin  2:04  

So we're gonna dive into our million dollar flip that we did together with you guys in Littleton, which is super, super exciting. Wanted to kind of give the audience a little bit of background about you guys, husband and wife team, which is super, super exciting. So we'd love for you guys to tell us a little bit more about your background. Maybe before you got into flipping what you guys were doing. And then we'll talk about what you're doing right now. But tell us your backstory.

Jesse  2:29  

Absolutely. We. So we started off being civil engineers, we went to college. down in Texas Tech, Lubbock, Texas, we studied to both be civil engineers moved out here after college. And we both started working at the same company. We were civil engineers for three years, a couple of months. And we realized, you know, this might not be the best thing for us. There was a kind of job where it was very, you read a computer desk all day. So we were on our computers, sometimes 1213 hours a day. And it just wasn't sustainable for us. It wasn't the life that we wanted to live. So we started kind of digging into some things a couple months in. And we came upon real estate flipping houses. Rachel is a really creative person. She loves design. I love numbers. I love business. I was kind of raised in a household of little bit of entrepreneurialship my parents owned restaurants, right? So I kind of just grew up with that kind of thing in the back of my mind. And we stumbled upon, you know, real estate and we dove in, we learned as much as we could probably for about a year listening to all the podcasts reading all the books we get our hands on

Rachel  3:39  

familiar with the market in Denver, and yeah,

Jesse  3:43  

yeah. And then we jumped into our first deal with a partner, one of my friends from high school him and his dad flipped houses in town, and we jumped into a deal with them. We learned so much on that deal. And then from there, we you know, took off, did a couple of deals on our own while we were working full time, and then manage to quit our full time jobs and do this full time. So now it's been a little bit over a year. So I quit my job while you quit yours in January of 2022. Yes. And then I quit March 2022. So it's been just a little over a year. Right? For me in rage. So yes.

Rachel  4:21  

And we also at the time that we did this partnership flip with you, Derek, we were very pregnant with our first child. That's right. And we were super excited and working on you know, working full time and then working on this house with you and growing a human being. You were female. Exactly. And we just knew that once we had this baby, we wanted to spend time with her and we really wanted to raise her ourselves and watch her grow and have a big family one day and all the things and so we knew that we needed to kind of get Out of our engineering desk jobs and kind of pursue something that maybe we were more passionate about, and also would provide us a lifestyle that we wanted to be able to raise a family and be with our kids more often. And now we're pregnant with the second route to about to pop at any week.

Derek Marlin  5:17  

We were looking fantastic for being you know, a couple of weeks out. Yeah, yeah, absolutely. Okay, so now tell me a little bit about give me the numbers on remind me how many flips Have you guys done and then you're getting into looking into some rentals. Tell me a little bit about kind of your current numbers of where you guys are at.

Jesse  5:34  

That's right. To date. We've done six flips. We are working on our first new development project. So a house we bought, we completely demoed, it's demoed right now. And we're planning to build a big single family house on in Edgewater.

Rachel  5:49  

That's project number seven or seven. We have six flips under our belt, one flip turned rental.

Derek Marlin  5:55  

Yes. Okay, we're gonna talk about that, too. I really love how you guys pivoted to kind of, you know, we were all pivoting and figuring out what was Yeah, market coming out of 2022. So, yeah. Okay, so six into seven flips, rental. And, you know, the cool thing about it is that we met at the first account. No, it wasn't my first it was our third Academy in November, I want to say, yeah, and then you guys took that. And then the way we got into this partnership flip was that you took that Academy, and it was maybe only two months later, I think that you guys were calling us, I think we've got a pretty good deal, like, helped me remind myself. Yeah, timeline of how we got to know each other, and then we'll fast forward.

Jesse  6:35  

Yeah, so that's where the academy was November 2020. This deal came across our inbox December 2020. So a couple of weeks, a couple of weeks after, and yeah, we reached back out, and it was an excellent opportunity to partner with somebody like you and learn. And, you know, we, we were still working full time, we had a project that we were working on, we just didn't have the resources or the time to do this one on our own. And it was just the perfect, you know, perfect opportunity to partner with you. And it was a massive project. It was yeah, 5000 square feet, seven bed, four bath, pool pool. I mean, yeah, this,

Rachel  7:11  

basically, Jesse could not stop thinking about this project, this house came into the email, via a wholesaler. And he did not sleep for like two days. He was like, we have to do this Rachel. And I was like, Jesse, this project is massive. We don't have the time. We don't have the resources. I don't know how we're going to do this. And he was like, we have to figure it out. And I was like, Okay, well, let's figure it out. And he was, you know, brainstorming, and this was shortly after he attended the academy, and was like, Well, I'm gonna reach out to Derek, and I'm gonna see what he thinks about this. And then we had you over to the house. And the rest is history.

Derek Marlin  7:52  

I know. And that's something that I want to frame for our audience to have kind of how this partnership clip thing works. And I think a lot of people, the thing that I love having you guys here talking about is that people who say, Well, what are you doing, you're training your competition. So if we think back is you sat through nine hours of intensive training, and Rachel we will have you sit through nine hours, you want to come back to one soon of teaching like every step of our system. And then the you guys are the poster children for people that we want to work with, of you're out then finding a deal. And then we partnered on a deal. And now we've done a handful of deals together and we'll talk more about it towards the end the episode racial, you got your license. Like that's to me like the growth mindset that we'll talk about the next episode as well. But to kind of help frame and, and contextualize what partnership flip means. It's what you guys just did. It's the client, either a real estate agent, a seller, or a fellow investor goes out and find a deal that I wouldn't otherwise find. So for you guys that was working with another wholesaler that we didn't have a relationship, and then you guys ended up purchasing the property and buying the property. If it's like a seller, they're going to continue to own it, or a real estate agent is going to say, hey, great, my clients going to own the house, they'll sell on the back end, but they're going to bring it to us, we then bring in our expertise, we bring in our money, we fund the deal. And then we split the extra profits 5050. And so again, if it's an experienced agent, they're going to sell it on our behalf. Or if they're inexperienced, they're going to partner up with our team, and we're going to sell it so truly that partnership mentality is something that we loved walking through with you guys. Definitely kind of maybe give me your mindset of to your point. That was a big project, like what were some of the things you were worried about, and then we'll kind of dive into the numbers of this project. But tell me a little bit about sounds like you were excited. Didn't sleep for two days. But what were you guys worried about too?

Jesse  9:36  

It was our first one of this size period, it was 5000 square feet. We had never done anything that big. It was 3540 minutes away from where we live so super far. And to you know, we were still working full time. We just didn't have any time to go over there. If we were to have done it ourselves. We apart from that it was you know the size of the house. It was just such a massive investment in terms of rehab. I've that, you know, we were already doing one on our own. So those and one of the other things was the pool. The pool. We never done a pool. Yep.

Rachel  10:10  

It was in Colorado. Yeah.

Jesse  10:12  

So that was one of the things that we, you know, those are I think the biggest things that we were nervous about. Definitely, yeah.

Derek Marlin  10:20  

Okay. Was there anything in the back of your mind? Rachel, we were like, Oh, my gosh, I think we think we have all our bases covered. Was there something else that was just like in the back of mind going, Oh, my gosh, why are we doing this? This is crazy.

Rachel  10:29  

I don't think so. I I feel like Jesse and I are on pretty good wavelengths most of the time, where if he gets excited about something, and he's super passionate, I'm quick to follow. And he felt like this was a home run, which it obviously was, at the end of the day. I think I just think a little bit more like logistically day to day, how is this going to work out? And again, that's what we were concerned about was, this is 40 minutes away from where we live, we're working full time. We have a baby on the way. We had another project going that we were completely finding ourselves, like, how are we logistically going to make this work, even though it is a slam dunk of a deal. But Jesse was super passionate about getting this keeping this making it work. And, you know, we just put our heads together figured it out. And it just was perfect timing that Jesse had just attended the Academy. And we got in touch with you and that you even offer, you know, partnerships like this in the first place. Open to that

Jesse  11:26  

it was a win win all around. Yes,

Derek Marlin  11:29  

yeah, I remember being really excited. This was definitely one of those ones where we have clients that bring us deals, and then we kind of politely tell them, either A, you should pass or B, we're going to pass because it's just not a good deal. And I remember you FaceTiming me from this house, and I'm like, I was actually kind of pissed at myself. I'm like, How the hell did I miss this house? This is a good deal. I live really close to Littleton. So it was kind of in my backyard. Yeah. But yeah, when you guys showed me and FaceTime me and we looked at the numbers, I'm like, whatever it takes, like say, Yes, I was equally as excited, even though there's some hurdles we'll talk about here in a minute. But yeah, it was definitely a good deal. And you can quickly tell when it's a good deal. And the cool thing about it is we've both worked with this same wholesaler since then, and it also goes to show if you work with good wholesalers, then it is truly a win win. I mean, they made a nice chunk of change. I remember him afterwards saying I think he's a little sad that he did wholesale it because nobody saw where the market was yet to be that big. But it was a win win. I mean, they made again, a nice chunk of change, and that's fine. I always say, Okay, if somebody brings me a house, and they buy at a tax lien auction or their parents and you know, inherited to them, who cares how much somebody is making, as long as they leave us meat on the bone as investors, we're all going to make a bunch of money. Yeah, totally. Yeah. So that I mean, that's kind of our thought.

Rachel  12:35  

And I think this wholesaler he said the main reason he wasn't keeping it for himself was it was just too far for them. Yes, they are based in Arvada area. And but yeah, I'm sure he's not giving this. Yep.

Derek Marlin  12:50  

This one was definitely good. So actually, that's a perfect segue into I'm going to set the stage for our audience to kind of dive into the numbers. Okay, so and also was a little while ago, too. So we bought this one for 490,000 bucks. We kept a $5,000 security deposit. Do you guys want to talk about why we kept the security deposit and what happened with the nice sweet grandma that we thought we were buying this house from? Yeah, has she?

Jesse  13:16  

So we, we closed on it? December 17. I believe it was and we had a read back till the end of January. So it was beginning of February. We're going to kick off start hit the ground running with this with the construction on this one.

Rachel  13:32  

Obviously, this house was occupied by one one grandma, grandma, and it was 5000 square feet, seven bedrooms, four bathrooms. It was massive. And it was one single grandma. I think she had probably 20 to 25 couches in this crammed in this house. And yeah, I mean, it was it was Christmas time but she also had like several Christmas trees

Jesse  13:56  

up and was like your Christmas.

Rachel  13:59  

Yeah, it was quite the interesting walk through that is for sure. Yeah.

Jesse  14:03  

Yeah. So we so in this month that we have this rent back. We had every right to kind of give her a couple of days notice Hey, we're gonna go in there. We're gonna walk with our contractor get our numbers, you know, firmed up, get a plan going so when we close on this then we can hit the ground running with construction. She did not let us in. She did not let us there right. We emailed her a couple of times. nicest can be

Rachel  14:29  

well, we met already closed. She's just as

Jesse  14:33  

we would tell her like hey, we're going to come by with our contractor on Tuesday. This was like the Tuesday before so you know it was a whole week in advance. Hey, you know we're where our masks will be super safe. You know we'll keep our distance and she just replied with like she cuz she called her a couple of times because we just needed to get into this thing we needed to get a plane going, you know, time is money, especially when you're letting somebody rent it out for free for a month and a half. But she was not gonna let us in. And you know, it was what it was we had to roll with the punches and at the end of the day we we went in there I think the first week into February after she moved out, by the way, she moved out and she gave us no notice that she moved out. She just kind of left. Yeah, literally doors unlocked the front doors unlocked. So no keys

Rachel  15:31  

to be found. We had to like run down depot and replace the car because we were trying to call her and say hey, where did you leave the kids and she was just now she was gone. Obviously he

Jesse  15:41  

was she was wherever she went to. But she left so much stuff in the house maybe was at least like a dumpster right of like a 40 yard or full full 40 yard dumpster. And something I think and yeah, she took the rails off the stairs, I mean, all kinds of stuff so she can move her 20 couches up. Yep, rip the rails off. Yeah, it was just, it was so much money just to get it to the place where we could start that we had to keep the security deposit that she left, right. And that's why we kept that five grand. Yeah. And

Derek Marlin  16:15  

as investors we're always what we tell clients is, hey, just either a take your stuff or be if you know and let us know we kind of budget that and we're going to remove your stuff. You never have to clean. It's not like a normal rental move out. Just don't trash it and you're right. Graham's just trashed it ripped off the railings, getting one of her 27 couches out of the basement. I mean helped us because it was demo. So that Baptists down to a 45 purchase price. Then we had 225,000 bucks budgeted for rehab. And as you guys, you know, outlined for our audience, just over 5000 square feet, seven bedrooms, four bathrooms, a bunch of square footage. Weirdly, though, it was kind of cosmetic because we weren't moving tons of walls. We weren't taking like the kitchen from one side of the house to the other side. I mean, it was a hefty lift, but was 225 grand. We ended up finishing the project at $241,000 in rehab. So we'll talk about why we did that in a minute. And then we did an $850,000 ARV. I remember walking through that. And I remember I think maybe Rachel, you and I are on the same page of being a little conservative on the ARV, and Jesse's like, we can sell it for more. Yes, like, I hope so man, but I it makes me nervous. You're right. We listed it for 925 at a bunch of offers. And then also again, this is June of 2021. So it was truly kind of like the heyday of the market being insane. Yeah,

Rachel  17:36  

I think we had over 40 showings in one weekend. Yes, yes. House.

Derek Marlin  17:40  

Yeah. And for a high priced home to this is not you know, like a $500,000 home in Highlands Ranch. I mean, this truly was a high, close to $1 million listing. So we did that, then we went our contract ended up selling it for a million dollars. So we always kind of nerd out on our metrics. And so the metrics were $108 per day in net profit 172,000 total dollars of net profit and a 21%. Roi. $801 Yeah, yeah, per day in net profit. So $801 in net profit. And we defined that a couple episodes back. But as you guys know, that's the amount of profit divided by the number of days. And that's something that I was so happy to work with you guys on to is that mean for that big of a house to crank through it? And five months was pretty great. Actually, that is a testament to you guys helping to having a great contractor. We always do say like, Yeah, this is one of the best deals we've ever done. But it wasn't like a true anomaly. It was we got you know, an extra $75,000 of going over asking price. But we still would have had a healthy six figure profit, even if we were totally wrong. And it was super conservative. Yeah. So that kind of sets the stage for, you know, the deal itself. I want to I don't want to but we're going to anyways, the pool. So one of the crazy things that we were really thinking about is you were the one that took the one for the team and you were trying to find pool vendors to fix this thing up talk about how hard it was to find a good pool company. And then maybe just where we were all put our heads together to think how much more can we sell this thing for having a pool,

Jesse  19:13  

right? It was insane. I called probably like 20 or 30 Pool companies in town, maybe even some in the springs and everybody was booked up until like August, September and we had this thing ready to sell in like May. Yep. So it was extremely difficult to find somebody to come take a look at it. Thankfully, we did find somebody. But yeah, to your point about the pool. Not many houses here have pools and like you said, some people might not want one because it's such a pain in the butt to winterize and you know, cover it for half the year. But this was a time when you know, coming out of COVID kind of where a lot of people from California from Texas were moving out moving to places like Denver. And so I remember we always kind of had in the back of our mind, maybe some Be from there. Yep, we'll come by, you know, come see it and see that it has a pool and it'll just add a lot of value to that particular buyer.

Rachel  20:08  

And that's kind of it. I think the answer is we weren't sure, yeah, weren't sure if this was going to add value or not. And the fact that this pool was not in like, excellent condition, true, was hurting us more than it was helping us at the end of the day when it came to showings and things like that. We made it through. And I think, like, to your point that the market was in such a hot place, that it didn't hurt us as much as it might have hurt us. In a more stable or typical market. People were willing to look past the pool because the market was so hot. But it was very challenging to figure out if this pool was going to help us or hurt us. Yeah,

Derek Marlin  20:48  

yeah, it really was. And that's something that when we worked with our agent, on this one, we disclosed that it we didn't know and that we had put out as many you know, bids as possible, we were prepared to do a concession, we were prepared to fix it. Hey, investors, thank you so much for listening to today's episode of raising the flipping bar. I'm Derrick Marlin, your host, and today's sponsor is the elevation academy. The academy is an intensive one day training session where we teach you every single step of our system to increase your profits, find great properties, save you time, avoid costly mistakes. Essentially, it is your roadmap, and it's 105 step system to your fix and flip success blueprint. So sign up today, we've got an academy coming up in a couple of weeks, we only are taking 20 guests, and we've actually got a money back guarantee. So if you try our system, you put in the old college try and you don't find it right benefit, we'll refund every penny of your money, but we'd love to have you join us for the elevation Academy. We've got info in our show notes, and we'd love to have you join us. I mean, that kind of dovetails perfectly into my next point, which is we always shoot to have a double or a 200% return on investment for when we're spending extra money to fix stuff up. So when we thought about our budget going from 225 to 241, the nice thing is within that price point, or that rehab amount, I should say that's still your 10% contingency. So we didn't really blow the budget, but we strategically saw the ARV going up and up and up. So we made some of those decisions to say, Okay, let's maybe put more into the wet bar into the basement or let's you ready to have a concession or we were willing to, you know, our perfect scenario, I think was, hey, let's have the pool running Memorial Day weekend. It's open. So we're making those concessions, but it's always like, we want to double that return on investment, which on that house without going overboard to because we probably could have spent an extra 50,000 bucks. Yeah, you know, I think that was kind of crazy. And then I think just you brought up a good point earlier, which was put in context to the timing of this thing. So it was late 2020. We were kind of in the middle of COVID. Still, we were early into 2021. And we were listing it at the peak time, which is the very end of the spring, early summer. Talk a little bit about, you know where you guys. Again, were there any reservations of where we were going to price that property, other concerns as we were coming down the homestretch of figuring this thing out, because we were still spending a lot of money on this rehab.

Jesse  23:11  

Right. And it's funny that you say that because when we did list it, there was true. There was no true comps that match this house because it was so it was massive. No, really no other house in that neighborhood was that big. seven bedrooms, I think the biggest one in that neighborhood itself had like five bedrooms. I mean, obviously had a pool. So you know, we kind of had to look, I think it was Wadsworth was the big street, kind of like dividing, you know, over the next neighborhood, we kind of had to dig into some comps on the other side of Wadsworth to see like, what is this thing truly worth? But I think as far as any challenges, I think we were personally just most worried about the pool and not having it up and running and concerned about what buyers would think about it.

Rachel  23:56  

Yeah, and listing wise Jesse and I are both still fairly new. I mean, I still would almost consider us new to real estate. But we were both fairly new to the real estate world in general. So we were really relying on Derek and your team to help us list this and get it at a listing price that was going to make sense and be as competitive, competitive and the most profitable that it can be.

Derek Marlin  24:21  

Yeah, and I think that you know, just you mentioned before, Rachel, you have great design taste, which we very much appreciate it. And I think on this one, it was kind of this great blending and marriage because we were able to create what is now our sixth the fixture and finished package the Million Dollar Listing package because of this property. So we did nicer cabinets. We did nicer countertops, we did more high end appliances, but we didn't break the bank. And that's something we're always trying to tell our clients and fellow investors like, yeah, we probably could have dropped an extra 50 to 100 grand to blow it out and go over the top but again, in that part of Littleton, you know, which is a southern suburb of Metro Denver, like we're not in Cherry Hills. We're not in Cherry Creek. We're not in the highlands, like there's only a threshold of what People will pay. And the project still ran up 75 grand. And then to also kind of put it in context. I know this is always hard for us to see too. But to your point, we sold it to a family from Texas. They were used to having pools. There was a challenging and very kind of discerning buyer. I'll use that term. Some people would say picky. I'll call it discerning. But that buyer was was kind of our person that we thought all along. And then if you guys don't have it, I have got my cheat sheet in front of me. But do you remember what happened when they lived there for a whopping nine months and what they did and what they sold it for? You got I'll give you guys a chance to take the answer if you don't know we sold was a junior dry July closed in July.

Jesse  25:43  

That's right. Then we closed on your birthday. My birthday

Rachel  25:45  

July.

Derek Marlin  25:47  

birthday present. Yeah,

Jesse  25:48  

that's right. They live there. Until February. Yeah. 2022. Right. I think for 115. I think so. Yes. $50,000. Over what they paid? Yep. Not even a year ago.

Derek Marlin  26:00  

They closed a couple months later for like, what was it one three or something that was just under one pre? Yeah. And all they did and we were wondering why they were trying to beat us up after the fact to get our kitchen cabinet designers info and all these other people's info, which we kind of have a hard time with as investors of you know, we get negotiated against that your house is trashed, even though we had it super fixed. And then it's oh, by the way, we want your vendors while they did some smart strategic renovations where they converted. And this is something you and I went back and forth on is do. It's great because no one has seven bedrooms. But really who needs seven bedrooms at that size. So they converted one of the bedrooms to a beautiful ensuite huge, like beautiful dream closet. I know my wife was really wanting that house that was one of the first houses where my kids were like, we want to move here. We can't afford to move here to sell it. But they did that strategic improvement and they put another egress window in the basement. So maybe they put in 20 grand and they got a monster return. So it is making smart strategic improvements. And that's where the market peaked. It's funny because just before we recorded this podcast I checked. So obviously if we think of 2022 things were crazy through June, it's now come down when things corrected. And I think it's back down to roughly about that 1.1 million. If you look on Redfin and Zillow, and you read pull comps, it's probably gone up a bit since when we sold it but not crazy was just that perfect tsunami of I think the family wanting something fancier and I think the guy owns a car dealership or something and so they just no good place to park your money for nine months. And yeah, he could call

Rachel  27:31  

the hot market on their side. Yeah. And we did two or we thought we did we do and we did, but they they made more than we did. Yeah, no, they did.

Derek Marlin  27:42  

Yeah, they really? Probably did. Yeah, yeah, you're definitely less headache. You're right, they had a lot easier rehab to make probably the same amount of money. But you know, and it can be conversed, where we would have sold it at the exact same time. And they tried to do that seven months later. And you know, that thing comes down another 300 grand. So it's the pros and cons of the risk of real estate. It is it is totally spot on the risk of real estate. So as we kind of wind down this episode, I want to hear a little bit more about what you guys are doing now with Jane our homes. Tell us a little bit about kind of what's your current model. It's been so fun to kind of see you guys grow from super smart engineers. And what most people would say, you did a great job, you got a degree you got engineering jobs, and then you quit your parents probably freaked out, and a mind would have, but you're living your dream and tell us what you're doing now and then we'll kind of wrap up the episode.

Jesse  28:29  

Absolutely were is in terms of our business, we are still buying and flipping in Denver, we've kind of found a nice little niche, doing a couple of higher end flips. We've just kind of seen, at least in terms of where we're at today. In terms of the market, there's a lot of people who are still buying cash in, you know, the million plus dollar range. And you know, with interest rates so high, we find that those people aren't as affected. Obviously, it's a lot smaller pool of buyers. But if you have something that's turnkey, that's in that price range, those things go quick right now. And we've kind of found our niche there. We have one currently in Denver proper, Off Broadway, awesome, awesome spot. Perfect house to turn into a rental. So when we bought it, we were first thinking lip all the way. And you know, we've kind of

Rachel  29:19  

we bought it last summer. So Jan 2022 with intentions of flipping it and selling it, you know, five to six months later. And then the last half of 2022 just really sunk like the market sunk down. And we had to strongly pivot on this project. We knew that we were probably maybe not going to get our return back or we were not going to get like a good profit like we had first anticipated and we pivoted and we said, hey, this is a great property to rent out. So maybe we can hold on to it. We'll still fix and flip it up and we'll rent it For a little while, which is what we're currently doing. So right now we're in like the furnishing stages. We have one renter down in the basement. And then we're going to do a little short term up top for a little while and see how it goes and wait for the market to kind of get hot again and see what we're getting. We're just we're pivoting Yeah, we're working with what the market is giving us but 2022 was no fun for any investor, or the end of yeah, a lot of time trying to is no fun for any investor. And we just had to pivot so that's one of our projects right now. And then just should tell about the other one we have

Jesse  30:33  

the other one we bought, we bought intended as a flip in, and then we bought this thing in August of 2022. In Edgewater, Colorado, and it was we yeah, we bought it to, we bought it to flip the basement, I think was like six foot three or something like that. Yeah, very, very small. But it was a substantial part of the square footage of the house. We communicated with the city of Edgewater said, Hey, this is how we're buying it. And can we go ahead and finish the basement? Just leave it as is? And they said no. Yep, has to be seven feet tall to be seven feet. So we got a couple of bids to see what it would be to, you know, dig it out and right to bring it to code. And it was like pretty much all of our profit of what it would have been if we flipped so we pivoted, it was the perfect purchase price to demo and do build a new house ice. So we're partnering with a builder that's built a lot and in Edgewater, he's done one like on almost every single street in Edgewater.

Rachel  31:32  

Yeah, it's a really cool neighborhood where Edgewater is like a very small area of town. And there's a lot of houses getting torn down and rebuilt. And Jesse using his creativity was like, Hey, let's go look at these houses and see if we can just build a new one on this house. And basically stalked down this builder that had a couple of houses that looked similar in the neighborhood. And now we're working with him to make a new construction. And we got very lucky. This is another pretty big lot that we have on here.

Jesse  32:06  

It's a big lot. It's in Edgewater. So you know right now in Denver, a new construction permit is taking anywhere I've heard between like 12 and 18 months crazy Edgewater. It's a couple of months three to four. Yeah. So it's, it's been the perfect spot to kind of, you know, we I feel like we've always thought that we would get into the development game just coming from his civil engineering background. That's, you know, those are the projects that we worked on. And it's come a little bit quicker than we thought, but it was just the perfect opportunity to, you know, pivot to that. Yeah. So we're super excited.

Rachel  32:37  

Yeah. And on that note, it's super exciting for us to as engineers, because we did used to be on the opposite side. Alright. Well, where developers I mean, we worked mostly in like multifamily and commercial development development. Yeah, yeah. And this is residential, obviously. But we were on the engineering side, you know, making these plans, submitting these plans in touch with the city, that kind of stuff, working for other developers. And now we are the developers. And we are the ones reviewing plans and hiring, you know, the engineer and the surveyor and doing all that stuff. So we have a we have a lot more background than maybe most people do. And like Jesse said, we've always wanted to get into the new development game, did not think we would do it this soon, by any means. But like you said, we pivoted with what 2022 brought us, and we're super excited, were probably going to break ground within a month. Yeah, yeah, we have all of our plans approved, and they just kind of gone with the city can getting the rest of our ducks in a row, and we shouldn't have something built by the end of the year.

Derek Marlin  33:37  

No, I think that's so awesome. That's something that what we really love is having that collaboration between investors. And so you guys are the perfect example of one, you're able to pivot and do it as well as you can be expected in kind of crazy market circumstances. But then again, it's almost we're gonna have my business consultant on here. And then another couple of episodes talking about working within a growth mindset. So with you guys now doing development, that's not our sweet spot. So for all out finding deals, great. If there's a development deal, it's not one that we're going to take down. So we would love to sell it to you guys. And then if you're working on three big projects, and it's kind of a simple condo flip, maybe it's not what is your bread and butter or your capital is tied up? Great, call us. And then we buy it. And now Rachel has her license. And so she gets to sell these properties. So there's really just cool, exciting things that it's been really fun to see you guys grow and be cool. And we're doing a podcast, hopefully in five or 10 years down the road of what everybody's doing. But to me, that's the exciting thing about real estate is everybody thinks like, Oh, I got to hold on to a deal or hold on to a wholesaler or hold on to a contact or a contractor. It's like we use some of the same contractors. We use the same systems on regular flips. It's like it should be a win win win. I don't think a lot of people think of it that way. But it's been fun to work with you guys in that manner. Yeah,

Rachel  34:45  

and I think a lot of I think real estate may get a bad rap sometimes of it can be very cutthroat and things like that. And I'm sure it can be in certain markets and certain people and stuff like that, but I felt like the people that we have networked with like you Derek, like We have all grown and shared and like helped each other out in so many ways that it is really fun to like, yeah, like you said, now I'm an agent and working on your team. Right? And, you know, we're we just have this whole circle going of networking. And it's been really amazing to meet so many mentors and friends like that along the way.

Derek Marlin  35:21  

Yeah. Awesome. Yeah. So as we kind of close out this episode, the last thing I want to ask you guys is, maybe if you each, Rachel, you want to pick maybe something that was the easiest part about the partnership flip process on our project on West friend, and maybe Jesse, if you want to tell us something that maybe was a little more challenging that you thought so, Rachel, if you want to start us off?

Rachel  35:41  

Yeah. So I think the easiest part was just like working with you in the team, like it was seamless. And we had mentioned earlier that we this is our technically second partnership, flip. I mean, we didn't call it that the first time around. But the very first project we ever did, we partnered with somebody as well, who you know, renovate homes and flips homes in the area, too. And these were significantly different in terms of like, the organization, the time spent. And don't get me wrong, the first one was great, and it was very, it was successful. And we learned so much, it was our very first time ever. But we were busting up cabinets ourselves. And we were we were doing a lot of sweat equity into that house. And the organization was just not really there. But going with you and your partnership flip. There was so much organization there. You know, we really showed up for maybe one to two times a week met with you and the team and we kind of went through the process got a lot of education and experience got to put in our two cents where you know, necessary and stuff. And it was received and it was it was seamless, seamless experience. I would say

Derek Marlin  36:52  

awesome. Well, thank you. It was a pleasure. Yeah, what was the maybe something was kind of a little more, I left a little more challenging.

Jesse  36:58  

I think the most challenging part was just trying to work with the grandma lived there to try and get in there before. You know, that was just so so challenging. Everything after that, you know, like Ray said was super seamless. And anybody that wants to do the same thing with you, we you know, it's just so it's so easy to learn from you. If you want to learn or if you just want to, you know, not be a part of it and you know, have be have a partnership flip. It's just super seamless. Yeah.

Derek Marlin  37:26  

Awesome. Well, thank you guys. It was a pleasure work with you guys as well. Thanks, Derek. Thanks. Thank you. Thank you so much for listening to raising the flipping bar. My goal is to help you successfully and profitably redevelop properties and 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 a 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 Derek Marlin and I'll catch you on the flip side