What has the greater value on a project: Time or return?

Question

If you had to choose which is more important to you, the time and resources put in on a project or having the largest return possible?

Brett Deas · Answer

Largest return, within reason. Obviously if the project was taking years and I could make more money other ways then time, but if it takes years for millions of dollars in return I would take that.

John Mathew · Answer

It really depends on the individual's goals and objectives. If you are looking for a quick return, then having the largest return possible in real estate is likely the most important factor. However, if you are looking for a long-term investment and are willing to put in the time and resources to build and maintain your investment, then the time and resources put into the project may be more important. Ultimately, you should consider both factors and decide which is more important to you based on your individual goals.

William Harvey · Answer

@Faith Importico 100% time and resources. There are multiple deals where we did not do very well (break-even or slight profit) but the effort expended was not a ton. We recently flipped a condo and made a whopping $400. Total dud.

However, a couple years ago we flipped a rural property and it was a complete nightmare. We ended up making about $20k on it, but it was a huge drain of our time and energy. I would 100% rather do the $400 condo deal versus that one. Even if we lost $10-20k on a deal where the effort is minimal, I'd choose that over the nightmare property that makes money but ruins your life.

If you gave me the choice between making $1,000,000 on a deal that is going to take a long time, will require tons of effort and time, and will not allow me to pursue many other additional ventures VS. A deal I'd make $75-100k on that is a routine house flip with nothing out of the ordinary, I would choose the 2nd option in a heartbeat.

You can always make more money, time is invaluable!

V.G Jason · Answer

Largest return possible. That's the reason we put time and resources into a project.

V.G Jason · Answer

I'm talking relative value, not absolute. If I put a bet on 10 hours @ 10k, I'd go deeper with 100 hours @ 100k. If we're talking two different ratios, that's different.

Jared Trindade · Answer

I'd say it probably boils down more to how you are funding a lot of the projects.

If you are working a BRRRR deal, return is important, but time is super important due to the frequent use of HMLs for BRRRRs. Stuck holding the bag too long, and you are throwing away your ROI into interest.

If you are a cash buyer then you aren't worrying about interest, so in theory holding the bag is less risky, but you are all in on that property. Time is of the essence to move it, because depending on capital reserves, someone may only have enough cash to do one deal at a time.

So to realize missed opportunities, having a quick turn around on properties in a timely manner will yield a higher ROI over the long term, because the investor is moving more deals.

I'd rather have three deals where I make $20,000 each, in the same time it takes me to find one property that will get me a $50k return. I've seen a lot of investors chop their arms off to save hands, and a lot investors who never had that arm to begin with. It's easy to get locked into "I need to make exactly X% or $X from a deal", rather than I can make that same return from two or three properties, instead of hoping I come across the right deal with the meat and having to competitively offer to get it. If the investor doesn't get the property they waited two months to come across their desk, then there they are waiting again until another one does. Not efficient in my opinion.

Obviously every investor approaches this differently, and has their own mentality on that. I just see it so often, it's worth mentioning. It also worth mentioning that a deal that doesn't have the exact amount of meat on it left doesn't mean it's a bad a deal, or a good deal, but there is potential there to make money. Lots of investors are very tight on the numbers, which is apropos. However I don't think it serves someone though if their rigidity on return forces them to sideline themselves for months or years at a time.

Just my thought process on it, would love feedback.

Caleb Brown · Answer

I know it's cliché but it depends. For me if the project was close to me, straight forward and a cookie cutter deal I'd say quicker time. If more things go into a deal then I'd say the return. But everyone is different and this was a very broad question. It'll depend on your goals, age, time you can spend on REI, asset class, location, how much capital you have, etc. There are so many factors that goes into a deal. I'd highly recommend sitting down and going over everything, have a plan and find deals that fits those goals

What has the greater value on a project: Time or return?

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