What ROI are private investors looking for on a unique flip?

2 Replies

I'm finding off-market houses that are on larger than average lots, where a lot or two can be split off and sold. Whether the original house is kept as a rental or fixed and flipped, what ROI are private investors looking for? I have a partner who is willing to go in 50/50 on profits but I'd rather find a private investor and give them a good return on their money. As I'm evaluating each deal, what ROI can I assume a private investor is looking for? I'd think 10 - 15% ? If so, how do factor in the time? It could take anywhere from a 4 months to 4 years to cash the investor out.

4 months vs 4 years is a wide range. In my experience and observation a 4 month investor is different from a 4 year investor. Someone who thought they'd be in and out in 4 months is not going to be happy when year 2 rolls around. Have you considered taking a loan and just paying points and simple interest? 10-15% should get most people interested.

Agreed - they are two different investors.  I qualify for loans but don't want to use my own money or credit.  I just got the name of a private investor who wants to fund deals and I'd like to present him the opportunity.  If all goes as planned, the deal would be bought, split, and sold/refinanced within a couple months - given our market and demand here in Colorado.  What do you think he'd anticipate me offering for a return if I approach him with a 6-month time frame?