A couple questions.
How do you know when to Flip or Rehab a Property???
How do you determine which will produce the greatest return???
Thanks REI people…
Howdy truchoice:
Here is an example I just ran across that may help. A guy has a 5 unit deal under contract for $80,000 that has an appraisal after rehab and lease up of $143,000. He says no more than $5000 to get the units rented. He is trying to wholesale for $100,000 and make a $20,000 profit. If he can make that kind of money why rehab and then try to resell. It is like finding a bird’s nest on the ground. I made an offer of $5000 and he would be a fool to take that offer early in the game as there is too much equity to give away and he could always buy and rehab and keep for cash flow. If he were about to lose his earnest money and had to walk away with no other options he would be better off taking a quick $5000 profit. He has too many other options. With all the hard money costs and other fees the $5000 is about all I could offer. I would pay more if there was owner financing and I could get in with little down and the rehab money.
Timing is important as well as the total potential profit. If you can make half the money without the work then why do any of the work.
Hope this helps some.
Thanks for the info. Tedjr…