Hey all, I have a good deal in an awesome neighborhood. Thing is I may have bitten of more than I can chew. I have a nice deal even though the profit margin is slim (24k) but, being a new-ish investor (1 flip, wholesale and J.V project) I'm willing to work it. However, there are homes on the same street and neighboring roads ranging from 290k - 340k. Comps are awesome literally same street, 15 houses down, and a week ago for 320's. Thing is I would have to add square footage on to the property and I've never done this before.
I'm just looking for general advice and guidance. Should I stick to the basic renovation conservative project or explore the alternative. Where would I begin?
@Steven A. - Could the general renovation be done with minimal permits? And how long would that take?
Then how much longer and more expansive would it be to have plans drawn up, get them approved and go through the additional permitting and inspection process. And what does that do to the timeline?
I would just look at each estimate for cost, headache and time, and see what the return would be. As an example, maybe the simpler route makes you a 15% return on your cash, but the route of adding more sq ft gets you a 16-17% return on your cash once you factor in the extra costs and time. If the difference was so low, I would go with the quicker option. Now if you were talking with a really large spread, then that would make me look at the route of adding sq ft.
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