Hey Active investors; PROFIT or ROI?

[Ross Mcghie]

I am curious to know what type of ROI are you looking for on a buy and hold.? And how much profit are you looking for on a fix n flip.?

Thanks

[Marcus Auerbach]

@Ross Mcghie - I will try to answer your question, but it will be from a midwest perspective. Most guys who do flips on a professional level and have a pipeline process in place will make about 15% net before taxes on average. Sometimes you have a 20%+ deal and sometimes you fall a bit short. That's a lot of flips at median price points to have a good year!

On a buy and hold you can expect a net cash profit of about $200 per door. This will typically increase as your investment matures. Total ROI on a buy and hold is much greater, because you also deleverage the loan and appreciate over time and with rehab. a combined ROI should be at a minimum of 10% on value (unleveraged) or over 30% cash on cash leveraged.

Now, before I get tomatoes thrown at me, yes you can do better than that, but I think it's better to keep the expectations a bit more conservative and if you land a home run later, that's the cherry on top.