When is a $15,000 profit not good enough?

October 30, 2024 • Estimated Reading Time: 3 minutes

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When is a $15,000 Profit NOT a Good Thing in Real Estate?

It really comes down to this memorable question: "Is the juice worth the squeeze?" Making a $15,000 profit on a real estate deal might sound like a win, but there are several reasons why it might not be enough. Here are some bullet points. It you want a bit more explanation for each point, click here.

  1. What does it cost to get in?

  2. What does it cost to stay in?

  3. What will it cost to make market ready?

  4. Can the margin handle market flucuations?

  5. What else COULD you be doing? - Opportunity Cost

  6. Is it Worth the Effort?

  7. Is the Reward Worth the Risk?

Conclusion

While a $15,000 profit might initially seem appealing, it's crucial to consider the broader financial picture. Evaluating acquisition costs, renovation expenses, holding costs, market conditions, opportunity costs, tax implications, and the risk-reward balance can provide a clearer understanding of whether such a profit is truly beneficial. Always conduct thorough due diligence and financial analysis before making investment decisions.