Louisville Investors, Check Your ROI

Regardless of whether you are buying investment homes in Louisville, Shepherdsville, Mt Washington, or anywhere else in the metro area, there is still money to be made. I know because I am still flipping homes and doing fine. In fact, I just sold a home in Louisville and purchased another property in Shepherdsville. But, enough about me.

The ultimate measure of success for flipping homes should be ROI (Return on investment). If you can't beat some standard such as the S&P 500, the return on your IRA, or the interest rate at your local bank, then you need to rethink your purchase decision. Determining ROI is a fairly simple and straight forward calculation that you must do BEFORE purchasing.

Here's how,

For flip houses, the calculation is simple (Selling Price - Commissions and Fees) / (Purchase Price + Renovation Costs+Carrying Costs).

Selling Price - Use a conservative estimate based on CMA for that area. Your real estate agent should be able to do this for you quickly.

Commissions and Fees - Again, your real estate agent should be able to figure the commissions, transfer taxes, and additional costs associated with selling your investment.

Renovation and Carrying Costs - If you are investing in properties in the Louisville, I hope that you know how to accurately estimate the costs associated with renovations. But, do not forget to include the carrying costs (mortgage, insurance, taxes) that you have to pay as a result of owning the property.

As I mentioned above, once you complete the calculation, look around and see if you can find a better return elsewhere. If not, consider buying the property.

If you need assistance looking buying or selling investment properties,

I am here to help.