Would you be happy with a 25% ROI?

6 Replies

Hello everyone, So here's the scoop. I have a home in Tulsa, OK near downtown. Cool area. My estimate is that it needs about 25k in renovations. New roof, new floor, new layout altogether. There's a house just a few doors up that's for sale for 87k. And that house is not as big as mine or as updated as mine will be. I have the 25k but that's all I have at the moment. So my concern is putting all my money into the project and not having any left over for living expenses in the mean time. So my question is, if I were to seek an investor for the 25k do you think a 25% return on investment would get someone interested assuming the project could be completed in about 2 months? Thanks in advance!

If it were me, and I put up all the money, then I would want 50% of profits. 

What has sold recently in that neighborhood?

@Ron Drake , thanks for the reply.

The area is kind of a hot spot for investors and end buyers right now so you'll find houses that have recently sold for as low as 6k and as high as 200k. The zip code is 74106 feel free to check out the area on Zillow or something. I don't think I'd be interested in splitting the profit, though. But, I'd consider more of a return if the investor were there with me everyday working on it. I do own the home outright with no debt on it of any kind. I don't know if that makes any difference or not.

@Travis Thornton  I misunderstood. I didn't realize you owned the home already. Sorry

Your percentages may work.

No worries, Ron. I didn't make that clear at all in my initial comment.

So you own the home outright and Renovation will cost   $25,000.  

Do you want to RRR (Renovate, Rent,  it Refinance it)   OR  do you want to sell it after it is renovated? 

Can you finance the property in its present condition and pull  money out for the renovation.

If you sold it right now without renovating it what could you sell it for?  If you could sell it in this condition for $75,000 it would be like selling it for $100,000 renovated.  Or would it be worth more then $100,000 once you renovated.  How much could it sell for renovated and how much can it rent for renovated.  

How long do you estimate your renovation will take and what would the holding costs be for the holding period?   Are you living in it right now? 

Just because the house next to you  is on the market for $87,000 doesn't mean that is the price it well sell for.  What are comps in the area selling for?  Is Zillow helpful for an estimate?

You talk about living expenses.  Do you have a monthly income to support yourself?

Once you know all these answers then you can make a judgement on how to proceed

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