An example of a real deal with numbers
Entrepreneur of the Week Noam Segal # Post 6
In my previous post I talked about conditions for getting a loan for entrepreneurs who do not have an SSN.
So as most of you know house prices have risen significantly and so have wood and various building materials.
Finding real improvement deals is not at all simple and within that also construction deals.
Today I will show you a real deal I made right at the beginning of Corona April 2020 and used a loan from an American private lender to carry out the construction.
The house is on a basement two stories above. House size 2634 SQ (without basement). There are 5 bedrooms and 3 bathrooms.
The price of the plot includes closing expenses - $ 61000
Construction price - $ 281500
Selling price - $ 420000
Brokerage expenses - $ 21000
Closing expenses (Tachles goes to the buyer's mortgage) - 3500
Total profit - $ 53000
If we did not take a loan our yield in 6 months of construction would have been - 15%.
Not bad…
We will now add the numbers of the loan:
Our equity in the deal was - $ 111000
The cost of the loan is $ 9250
Profit per transaction - $ 43750
Total return - 39% for six months !!!
And besides the insane percentages came out a beautiful house as you can see in the pictures.
So of course the loan has greatly increased the percentages, however when you take out a loan for new construction you need to be super sure that your contractor knows and can meet the schedules.
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