Value-Add Deals - What Are They & How Do You Make A Profit On Them? | Business of Real Estate
Manage episode 291491709 series 2837972
Today's topic is value-add deals. Hosts Glenn and Amber Schworm walk through a property they have under contract and discuss renovations. For these two expert investors, when they choose a property to purchase, there are multiple factors that need to be considered. The two most important are ARV (After Repair Value) and renovation costs. If the renovation costs go beyond a set budget, this can mean they won't hit the desired ARV and the property is not worth the investment. However, if they can keep renovation costs below or on budget, they can afford to put $10,000 worth of work into a property while expecting to make $30,000 or more when they sell it.
Tip: One of the best things you can do as a new investor is to listen and learn from the experts. This episode is a master class in how to estimate renovations, stay on budget, and make a decision on whether buying a value-add property is the correct strategy for you.
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