Posted by Mark R in KCMO on January 29, 1999 at 14:55:13:
One of the factors is the time that it takes to do the whole job. Replacing floor joists, and raising the building to level and eliminating sagging floors, or replacing wooden beams with steel beams can often be done in matters of days not weeks. I the situation arises that I can buy a property, and do 3-5K in work pull out another 15-25K leave the rest of the 10-12K in rehab costs off, and leave 10K-15K profit in the deal, I would much rather be out in a week to a another rehabber, and let them earn thier money over the next month to 6 months or whatever it takes.
Remember, Many times rehabbers are taught to never take on structural problems, and avoid fire damaged properties. When those properties come on the market, there is little if any competition.
As I said before, that isn’t my target, but I can see that there will be times where my resources are better invested in other properties, than to incure more holding costs, and risk, for a profit that actually “yields” less 10K 7 days Vs 40K 180 days…
Those numbers are just plucked from air, they do illustrate the power just doing the Nasty stuff and leave the clean stuff to someone else.
Hope this Helps
Mark R in KCMO