Posted by Joe Kaiser on May 06, 2006 at 05:15:16:
What’s your hourly rate?
You did two things here . . . you bought and you fixed up. Break them
into two separate activities and calculate what you could have made
had you just flipped it as is, and divide that by how long it would likely
have taken. Now, you’ve got your hourly rate for dealmaking.
Do the same thing with the rehab part. Break it out, figure what profit
you’ll likely make as a result of your efforts, divide by your time spend
and calculate that rate. Don’t forget to first subtract out the profit you
would have made flipping, that’s not a part of the rehab profit, you
earned that with your dealmaking abilities.
Now, compare the two and let’s see where your EV (expected value)