profit percentage

Hello, Forgive if this has been discussed before but I have just recently found this forum. I have been involved in a few rehab homes we have done and sold ourselves. We currently own an appraisal company in our area so we have a good feel for the renovated market values of the homes we rehab. My question to the experts here is do you look for or have a minimum profit percentage that you look to make from the homes you rehab?

Comments(5)

  • sisayako7th March, 2003

    That's a really good question, I've been thinking about that exact same thing myself. I'm looking to do a rehab and after all is said and done, with me having spent hours of my time and months of work, I should make about 20k. Seems like a pretty good deal to me but I talked to an investor friend of mine and he said he generally needs about a 50k profit for it to be worth his while. I'd be really interested in seeing what you experienced rehabers expect to make for it to be worth your while.

  • MikeT10137th March, 2003

    Really depends on how aggressive and greedy your are. Would you pass up a deal because you can "only make $15,000"? If you would, then that's great for everyone else.

    I personally try to walk away with no less then $10-15K, minimum.

    To your success,
    [addsig]

  • kellygreen7th March, 2003

    Whether right or wrong I don't know. But I have been trying to keep a 12 to 15% margin. I guess I am greedy because I would take all the 10,000 and 15,000 deals I could handle. My problem is finding the money for the deals that are available. I guess this is a something that everyone must decide for themselves.

  • JohnMichael7th March, 2003

    This is just an example of profit margins I prefer on each deal.

    50,000 or less = 5k or more
    75,000 to 99,000 = 10k profit or more
    100,000 to 165,000 = 15k profit or more
    166,000 to 200,000 = 20k profit or more
    [addsig]

  • pserber12th March, 2003

    Kelly,

    Do you find many deals in your part of Florida? Have you considered a hard money lender? Or are your deals no a fit for that type of financing (65-70% LTV)?

    I am in So Cal where deals are few and slim. So I am considering doing rehabs in other parts of the US which would require a partner to, for example, locate the deals.

    If you would like, email me at dieselcatt@yahoo.com. Perhaps we can work something out.

    P. Serber

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