During the month of November, Robin Spiers with Robin Spiers & Associates, and I were in search for an investment property. I’ve had a few people ask about how this all works so I thought it was perfect timing to let you all in on how it works.
Investment Property
The Search
The entire process begins with a search. For this particular property, it was all Robin’s hard work in coming up with some potential options. When Robin sent me the listing I immediately knew this was a contender. Just take a look at the gorgeous windows in this home!
Viewing the Home
When looking at an investment property, there are things on my list that I look at:
- What is the overall state of the home?
- The overall state of the kitchen.
- What is the overall state of the bathrooms?
- And large ticket items:
- roofing
- windows
- doors
- flooring
Adding Up the Numbers
After Robin and I look at the home, I come up with a very rough budget to renovate based off of what Robin believes he can sell the home for. For this particular home, it is going to be listed for over one million dollars so I know that the design and products that I choose have to jive with that number. For example, the appliances that I am going to use will be all Smart Appliances (in a sexy black stainless steel).
Presenting this to Investors
When Robin and I look at our numbers, and if the margins are a good investment, we commit to investing in the property. For this particular investment property, Robin and I let our group of capital investors know about this great property. Although Robin and I were willing to do this one on our own, we had a lot of interest.
Robin put together four scenarios for this property. In the scenarios listed below, the numbers include renovation costs and carrying costs based off holding the property for a total of 6 months. I would have 3 months to renovate, and Robin would have 3 months to sell. Here is what we presented based on scenarios.
- A ‘worst case’ scenario where after the renovation, investors would receive a 0.89% ROI.
- A ‘good case’ scenario where after the renovations, investors would receive a 17.38% ROI.
- A ‘better case’ scenario where after the renovations, investors would receive a 29.21% ROI.
- A ‘great case’ scenario where after the renovations
, , investors would receive a 41.03% ROI.
Investment Property
For this particular property, we had to turn away investors! The home itself is such a great home, the location is in a very desirable neighbourhood, and the design plan (if I do say so myself), is beautiful. I did a little Facebook Live from my office to talk a little about my plans.
Stay Tuned
I look forward to sharing the journey with you on this investment property. I will be doing many Facebook Live videos as well as videos on Instagram. I hope you’ll join me!
SO exciting to get to follow along on this journey, Sheri! Looking forward to seeing more!
Interesting to hear about how you are approaching an investment property…and I be back to read more and learn how the journey unfolds
Definitely interested in how this works. I want to do at least on investment property this year.
What an amazing home! Wow. Those windows. I know you’ll rock this out. I dabbled in a few investment properties as an investor. Ready to get back into it.
This is a totally amazing review. I love it. Thanks.
Hello, I’m interested in hearing more about future investment property opportunities.
Regards,
Autumn
Sheri:
I really appreciate how you are approaching the value of remodeling and interior design as delivering a financial return on investment. That is a part that so many people often don’t realize.
Investing in remodeling and/or interior design will almost always yield a higher sales price…whether the home is flipped right away like this one will be or lived in for the next 5- 20 years.
Buyers are very saavy these days, and will definitely pay more for a beautifully remodeled, coordinated and designed home, that is above *builders grade* options.
I look forward to watching the progress!
can’t wait to see the outcome! I am loving the cathedral ceiling and windows!
Thanks Julie! We’re excited to get our hands on this one!
What a great project. I’m going to live vicariously here.
I could move into this home in a heart beat!
Sheri I loved reading your post on finding this project. Having purchased, renovated and sold over a dozen properties, I know that process all to well. Your post brings back the excitement of finding the elusive diamond-in-the-rough! Wishing you the best!
Thank you Amy!