Profit Question
I would be interested to know what type of profit you are making on rehabs. What's the smallest profit (loss) and the largest profit you've ever made. What's your average profit per rehab. How many do you do a year?
Thanks for the info.
David
it all depends on the property and the market...
the least people want to make is 40% profit usually...
well i can only give you numbers from what i've read....
anywhere from 30-60 percent is the norm...
that 30-60% of the ARV
~Andrew
Re: "30-60% of the ARV "
I'd like to see those numbers.
Profit on a rehab depends a lot on the value of the property you are rehabbing. You arent going to make as much on a 50k property as you will on a 250k property even though you may put in just as much labor.
It really boils down to two parts. The "time" value of the money you invest and the hourly rate of return you want/need for your labor.
Let's assume you are a part-time rehabber with a reasonable amout of capital at your disposal.
Say a project takes a 4mos to rehab and 4 mos to sell. Say your total out of pocket is 50k (acquisition, rehab and disposition costs). The risk free rate of return on that is about 2k so that is the time value of your invested capital.
Say you invest 400 hours of labor and you require $50/hr to make it worthwhile. That's 20k.
So regardless of the type or cost of the property, if you invest 50k and 400hrs of labor over an 8mo period, you shoud gross 22k.