All in rehab or pursuing next deal with 80k?

[Remi Nguyen]

I'm weighing several options on whether to go all in the rehab. Would love to pick your brain on my plan:

Location: Silver Spring MD, single house, > 2200 sqt

1. - The house can be set up to rent out the front half (1 living room + 1 bedroom on main level + 1 bed & 1 full bath in basement). I’ll live in the back half/ upstair (3 bedrooms + 2 baths + kitchen)
2. - I plan to live in the house 1-2 years, then rent out both parts (probably separately).
3. - The purchase price is at least 50K lower than most houses on market in the area now.
4. - The house is move-in acceptable. Everything is functional (new HVAC, ok roof, good appliances), just a bit out-of-date bathroom, kitchen, floor, very old kitchen cabinet.
5. -Currently having > 80 k saving

Questions:

1. Should I put all 80 K into the rehab now to update the house as much as I can (I.e redo bathrooms, kitchen, refinish flooring). Then I’ll need 1 year to save up that amount again for the next deal.
2. OR: spend as little as possible to put a tenant in soon (just refinish the floors, add kitchenette). Then use the rest of my savings to pursue the next deal?

Strategically thinking, which option makes more sense to you? Any advice is much appreciated! Thank you.

[Jack Seiden]

Quote from @Remi Nguyen:

I'm weighing several options on whether to go all in the rehab. Would love to pick your brain on my plan:

Location: Silver Spring MD, single house, > 2200 sqt

1. - The house can be set up to rent out the front half (1 living room + 1 bedroom on main level + 1 bed & 1 full bath in basement). I’ll live in the back half/ upstair (3 bedrooms + 2 baths + kitchen)
2. - I plan to live in the house 1-2 years, then rent out both parts (probably separately).
3. - The purchase price is at least 50K lower than most houses on market in the area now.
4. - The house is move-in acceptable. Everything is functional (new HVAC, ok roof, good appliances), just a bit out-of-date bathroom, kitchen, floor, very old kitchen cabinet.
5. -Currently having > 80 k saving

Questions:

1. Should I put all 80 K into the rehab now to update the house as much as I can (I.e redo bathrooms, kitchen, refinish flooring). Then I’ll need 1 year to save up that amount again for the next deal.
2. OR: spend as little as possible to put a tenant in soon (just refinish the floors, add kitchenette). Then use the rest of my savings to pursue the next deal?

Strategically thinking, which option makes more sense to you? Any advice is much appreciated! Thank you.

 Assuming the house is livable and has no large upcoming capex, it’s really a rate of return question for example if an 80k reno would net your 8k more in rent than it would be a 10% return at therefore worth it, if it netted you an extra 2k for example it wouldn’t really be a good rate of return. Knowing nothing about the property in general major Reno’s tend not to have a great roi in Montgomery County vs D.C. for example.