When you’re looking at a deal, it’s really easy to get excited about the raw numbers. In fact, if the basic numbers—how much the property will sell for minus how much it will cost to get it ready to sell—aren’t great, run!
In this case, we were looking at a house that would sell for about $375,000. We could buy it for $225,000 and it would take about another $65,000 for renovation, based on our average cost per square foot on a house in this market. That leaves about $85,000 in gross profit. Not bad for six months work. Right?
That gross profit number means that we should take a closer look, not that this is a good deal. It’s really easy to forget about the other costs, which can add up faster than Usain Bolt can run the 100 meters. Continue readingHermann says please like and share!