#1 Real Estate Deal Analysis & Advice Contributor
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- Lakewood, WA
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Why a “Good” Real Estate Deal Can Still Lose Money
#1 Real Estate Deal Analysis & Advice Contributor
- Lender
- Lakewood, WA
A property can look like a great deal on paper and still turn into a headache.
You buy below market value.
The ARV looks strong.
The rehab budget seems reasonable.
The projected profit looks attractive.
Then the project starts.
Materials cost more than expected. A contractor finds additional work. The timeline stretches. Holding costs increase. Suddenly, that $50K projected profit doesn't look so comfortable anymore.
One thing investors sometimes overlook is that the margin isn't just determined by the purchase price and ARV. It's determined by how realistic the entire deal analysis is.
When you're analyzing a flip, are you building enough room into your numbers for unexpected costs and delays?
What's one expense you've learned to budget more conservatively after experience?
Would love to hear what other investors are seeing in their deals.
- Siahna Im
