Deal Analysis - How far should we rehab?

[Ethan Pankratz]

Alright I'm a new member, so I'll try to be quick and to the point...

Our team bought a flip in Burnsville, MN this past week. It was a hoarder house, and has been vacant for 10 yrs. We are 4 weeks from closing, and we need to decide on how far to take this project. We currently see 3 option :

1 - Bare minimum - Simply make the home fanciable and livable. Includes: Drywall repairs, appliances, some paint, some flooring, roof, furnace ac and water heater, etc. About $275 ARV

2 - Lipstick - Make it decent. All of the above, plus: paint siding, all flooring, all paint, paint kitchen cabinets, fixtures where needed. ARV tbd

3 - Full Renovation - Top of the market. Go all out. All of the above, plus: extensive drywall and texture, total kitchen reno, total bath reno, new siding, windows, all new fixtures. $370 ARV

Let me know your thoughts. Purchase price was $180, so just trying to figure out how to maximize profits/time. Some pics are included.

Thanks in advance!

[Kuba F.]

@Ethan Pankratz

If you have projects at different time horizons then the best way to compare them is using an annualized rate of return. Take the ROI of each scenario and extend it to a year.