Posted by Joe C. (AR) on June 16, 2006 at 23:51:32:
I would rather make my 30k with less effort, in less time. So no rehab is preferable from that standpoint. But if my choice is to make 30% with no rehab or 50% with rehab, it’s a toss-up for me. You should get paid more for your time, effort and length of commitment.
Just my $.02
Joe C. (AR)
Question for everyone - Posted by Greg
Posted by Greg on June 16, 2006 at 18:49:04:
Would you rather do a rehab for a 30K profit or…
Buy a house with 30K in equity and sell.
Opinions welcomed.
Re: Question for everyone - Posted by michaela-FL
Posted by michaela-FL on June 18, 2006 at 08:36:20:
Greg,
I think you’ve gotten some very good answers. In general people say, that it’s better to make the 30k without work than with.
Now, I would suggest that you also look at the big picture: What about the neighborhood. Sometimes getting a deal in one neighborhood gets you in contact with the neighbors. Are there a lot of fixer-uppers in that neighborhood? If so, maybe it wouldn’t be such a bad idea doing a rehab and being visible to others. Let others around you see what you’re doing, how you’re helping th eneighborhood. They may start talking to you about buying their house and so on.
I personally love to design and am chomping at the bit to do another rehab, but in the meantime I’m doing the ‘easy money’ with flipping lots.
Just something to consider.
Michaela
Re: Question for everyone - Posted by Rob Ricker
Posted by Rob Ricker on June 18, 2006 at 24:30:49:
Would you prefer a paycheck for working Monday through Friday this week (rehab) or just 1/2 day on Friday(equity)?
Therein lies your answer.
Re: Question for everyone - Posted by Brian Profits
Posted by Brian Profits on June 17, 2006 at 23:14:36:
Greg,
Remember equity is the difference between what you buy it for and what you sell it for. A house only has $30K equity if you can sell it for $30K more than you bought it for. Of course if you can sell a pretty house with no repairs for $30K more than what you bought is for quickly that would be preferred. Wouldn’t you agree?
Re: Question for everyone - Posted by David Krulac
Posted by David Krulac on June 17, 2006 at 20:35:43:
30k is 30k. if you can get 30k by flipping without doing any rehab, obviously that would be the way to go.
Re: Question for everyone - Posted by John Behle
Posted by John Behle on June 17, 2006 at 17:55:33:
I’d rather buy a note with 30K equity and entice them to pay off early. Quick profit and no hammers and nails or tenants and toilets.
Re: Question for everyone - Posted by Natalie-VA
Posted by Natalie-VA on June 17, 2006 at 08:33:08:
Greg,
It depends what price range that house with the 30k equity is in. If you’re talking about a 300k house with 30k in equity, I would walk…there’s no room to make a profit. If you were talking about a 100k house with 30k in equity, I might consider it.
So, without knowing the price range, I’d go for the 30k rehab, assign it to another investor and keep 5 to 10k for myself (depending on the amount of rehab).
–Natalie
Re: Question for everyone - Posted by LK
Posted by LK on June 17, 2006 at 06:59:10:
As Joe C said it is all about calculating time and effort vs return. I would always choose the house that can be sold or rented in a shorter amount of time with less work and risk on my part.
But given the above scenario, I would buy both.