Figuring Out The Profits Possible
I am looking to invest in a fixer property, but I am new to the field. Is there any method or theory as far as figuring how much you should invest in order to maximize your profit after you sell and modernize the home?
There are many good books out there on this topic.. One I read recently is "Buy It, Fix It, Flip It". $18
The golden rule is figure your profit in UP-FRONT as part of your Maximum offer calculation.
Your profit is determined when you buy, not when you sell.
example,
Max Retail Price (After Rehab) = 200,000
Rehab Costs = -20,000
Other (closing, tax,ins,finance) = -20,000
Your Profit = -20,000
Sum equals Max offer price of 140,000
This is just a simple example, you want to have specifics on the Other costs and don't forget a miscellaneous for the inevitable surprises.
BL