Business Opportunities - Short Term
Purchasing a property below market value with the intention of upgrading the property and selling it at top market value, thus maximizing your profit in a short period of time by taking the lowest risk.
Purchasing a property below market value is possible in cases of foreclosure or a property in a bad condition.
There are two ways to purchase a short term investment:
1. Buy it all cash.
2. Down payment of 20% +closing cost + renovation.
Short term model:
1 family house in Queens, NY
Purchase price of $240,000 (as a fully renovated house, its estimated value is $400,000)
| All Cash | Partly finance | |
|---|---|---|
| Sell Price | $380,000 | $380,000 |
| Purchase price | ($240,000) | ($240,000) |
| Renovation | ($30,000) | ($30,000) |
| Closing Cost | ($10,000) | ($20,000) |
| Real Estate Fee | ($20,000) | ($20,000) |
| Interest Rate | ($16,800) | |
| Net Profit | $80,000 | $51,200 |
Total investment of $280,000 Semi Annual yield of 28.5% Annual yield of 57% |
Total investment of $78,000 Semi Annual yield of 65.6% Annual yield of 131.2% |