Posted by Nick on October 05, 2003 at 16:55:16:
I’m planning on flipping houses by acquiring them with hard money at say 25% below FMV and doing this for a few years, then start using my own capital to start commercial flipping and attempt to get a consistent 25% net return per year. The problem is, in trying to achieve 25% per year:
- The larger the asset, the longer it takes to perform each flip within a year. So profit may become split between 2+ years and my yearly return will go down.
- I may not be able to put all my money to re-use fast enough because I probably won’t be able to acquire enough assets to flip each year. (I don’t want to risk all of my capital in one big deal each time).
Is there a solution to this, or a better way to get 25% net(on both cash and equity)?
Thanks a lot