All Forum Posts by: Khaled Helmi

Very nice! Your ARV is 82.5? That's pretty slim margins - how much did you buy it at and how much are you in?

Wow beautiful house - wish 106k bought that stuff up here in Maryland! Your affordability down there is outstanding

@Account Closed - Wonderful read and thanks for taking the time to share your experience with us!  If you ever see anything in Maryland that interests you let me know and maybe we can partner together on something!

There is a difference between ROI and Cash on Cash return.

Cash on Cash would be the net cash you earn annually divided by money that you invested (cash-wise).  In this case it would be $19,200 / $110,000 = 17.45%

ROI would be the net cash you earn annually divided by your total investment cost (including debt). I dont think you provided total cost, but if we assume $200k, then the ROI would be:

$19,200 / $200,000 = 9.6%

Personally, I think cash-on-cash is good to judge making personal investment decisions as it provides you your REAL out-of-pocket returns. ROI is much more useful as a barometer for comparing your investment to those of other investors as it eliminates leverage in the calculation (though it still includes interest rates & that may make comparisons different).

Hope that helps!

Hey Skyler welcome to the posting world!

we're doing a massive rehab of an old home and pretty much it's new construction except for we're leaving one wall up so that we don't have to file new permits as new construction. One thing I'll tell you, is that under the 250k Price Point new construction in most areas where the land is in dirt cheap isn't going to be an option because it's too expensive and the profits aren't there.

Maybe you'll get some different advice from Builders, but as a flipper I just don't see it being worth it to build new with all the soft and hard costs, plus the risk in the length of time it takes to be building under 250k in decent areas

 Thanks @jayHinrichs - I was thinking this was more of a higher risk strategy that needed higher returns.  You guys are doing great by just churning them out and i'm sure that just like everything else in the industry, there are builders that aim for the big profits and less sales numbers (more unique high-end properties)

 15% seems low and I figure your profits are probably similar to others in the industry.  Is that a factor of this current market (i.e. did it used to be higher in the "good ole days"), or is that a historically normal number?

 Oh ok great - though I wouldnt be surprised if she contacts you again in a few months.  That's why I like to always leave "failed deals" with a good impression (no rough bridge-burning negotiations) and let them know that if they change their mind here's my card.  People like her tend to call back months later...

If the property with the squatter was a good deal why not buy it as-is with squatter (and an additional discount 🙂) and then get him out?

I think that's an opportunity for you especially considering she's not going to be able to make her cousin leave from a familial point of view while you have no blood ties with the guy - and he knows it.

I'd try cash for keys first with him if you can get a signature with the cash (maybe even include a clause that he gives up any property claims) and go from there. As long as you can get clear title then I wouldn't eliminate it just because of the squatter

@Eric Merhar - Looking forward to seeing this journal as you go through the process!