ROI for flips and development

[Amin Mutal]

Hi everyone! Need some advise from the experts acceptable ROI on a flip or real estate development.

I guess in these challenging environment what will you consider as a reasonable return(without being too greedy)in a rehab/development project after you allow for all cost, contingencies. I know everyone risk appetite are not the same. Would appreciate some insights on the subject.

[Dennis Cosgrave]

First rule of business is, the rate of return should reflect the level of risk. When the economy is good and the market is normal or hot, then you can accept a lower ROI. However, in uncertain times (such as now), you need to build in a higher ROI to compensate for the higher risks.