Understanding the numbers

[Account Closed]

Hello everyone, Im puzzled at the moment as the answer doesn't seem immediately clear to me however while researching how much value individual renovations bring, for the most part they all bring a below 100% ROI , thus for example a minor kitchen renovation was bringing in 75% ROI, therefore if I spent 20k on renovating a kitchen then I will receive only 15k in added value to the overall resale value of the house. How does it make sense for flippers to be flipping houses if renovations have a negative return and then also how does it make sense when trying to get an appraisal for a house that would result in getting a cash out refinance that will break even or even profit when going the BRRRR method route?

Thanks in advanced!  

[Chris Seveney]

@Collin Atchison

This is why fix and flippers need to buy assets at a discount.