Which profit level do you prefer: $3M, $30M, $300k, or $30k?
We made a $3M profit on this deal.
Which profit level do you prefer: $3M, $30M, $300k, or $30k?
I believe we all have a choice in the level we play at, whether we realize it or not.
Our self-esteem and skill set, play a significant role in the level we end up playing at.
Personally, I started my career doing house flips that earned around $30k per deal.
At that level, all I could see was the next level up, where people were doing lots of $30k deals or larger custom home projects that made $300k per deal.
Once we started playing at the $300k level, we realized that we were within reach of doing projects that could earn us $3M per deal, and that became a possibility in our minds.
While we haven't yet reached the $30M level, I'm confident we'll get there eventually, even if it takes a few years, given the current economic situation.
In this game, there are rules and levels that you need to learn, and once you do, it becomes a high-stakes game to be played. I believe it's your job to prepare yourself to play at each level. Everyone has the want to play at the highest level, but most people don't have the will to spend YEARS getting themselves ready to play at the highest level.
I'm attaching our costs on this roughly $3m profit deal. We built it all in at $10M and sold it for $13M.
It was structured as a 50/50 split deal with no fees for our development and construction work.
I would not do a deal with this structure again.
If we scaled up this deal by 10x and built a 260-unit complex instead of a 26-unit one, we'd be at the $30M profit level. On the other hand, if we scaled down and built a house for $1M and sold it for $1.3M, we'd make roughly $300k (not including closing costs for simplicity's sake).
We've also done houses in Compton and made $30k.
Your life, your levels, your choice.
And if you think, "These opportunities aren't available in my city." Move.
I'm not from LA; I moved here in 2009 with a -$400k net worth, knowing 1 person.
“Your playing small does not serve the world." -Marianne Williamson