John, I probably sound more like a homeowner than an investor in this particular instance because this Is my primary residence. I DO know the value of my money and also know from experience how a poorly done renovation could hurt a future sale (in some areas). The area I live in, the median home price is around 1.6 million with many houses well beyond that in price. People expect to see higher end finishes when looking for a house here and surely take notice when they are missing. I know this from experience since this is my third home in this immediate area. Now, as I had stated earlier, I plan on staying put in this residence for some time so return on investment for the renovations will not be immediate as mentioned earlier. I am aware of this, as well as the depreciation the renovation will have as it ages. I am not considering renovating my home as my "start in real estate investing". However, it does have a direct effect on my startup capital. That was the purpose for the post in the first place. To get the opinions of experienced investors as to where to allocate the capital. Maybe you misread my original post but the renovation cost was $150K not $250K. I also did not state that the full amount was going into one project nor do I plan on "blowing my whole bankroll" on one project. Actually, my plan is to purchase Long term rentals in the 40-50K range that cash flow. The question was how to allocate the money, both the renovation and a startup in REI will happen with this money. Just how much for each? As far as contractors and renovations I do have experience from a "homeowners" perspective. I have gut renovated my last two homes and did so as to make a nice return when I sold my homes. I believe the quality of the renovations is what made me a nice profit in a tough market. I know some contractors over charge. But I am pretty confident that I know how to weed through most of the guys that try and take you for a ride. I am also realistic that this is their livelihood and they do have to make some profit to feed their families. As you stated, I am one of those folks that "dream" about getting into real estate but I am certainly not one who thinks it is "so easy" My family has been involved with investing in multi family apartment buildings in NYC all my life and I have seen first hand the ups and downs. I am looking to go at it on my own and build my own portfolio, that is what brings me to Bigger Pockets. I do not rush into anything without making educated decisions. I can also recognize the importance of asking for help from people who are actively doing what I strive to do and are willing to share their knowledge. Again, this was my intention of the thread. I am sorry if it strayed off.
