love those TV rehabbing same upgrades are done but maybe
shows like Flip That House. skipping the granite countertops
On the show people buy a and some other high end upgrades.
house needing to be seriously In any market you are going to
updated and repaired. Usually the repaint and redo the floors. The
kitchen is heavily upgraded with areas to spend the most money to
new cabinets, cutting edge upgrade are the kitchen and the
appliances, new countertops and bathrooms. A great value add that
more. The bathrooms are sometimes adds tremendously to
completely redone with new tile, the value of the home is if you
tubs, showers, sinks and more. can add a 2nd bathroom to a home
The living rooms and other areas with only one bathroom. While
usually have walls taken out to this will probably cost in the
open up the floor plan and $10,000 range to do, it could
usually carpet is replaced with increase the value of the home by
some type of hardwood flooring. $20,000-40,000 and significantly
It's realistic to do what they add to your profit potential.
show in a high dollar housing
market like California to make To do deals like this you need to
the huge profits they usually get go through several steps. First
on that show. In a lower priced of all you have to get set up
market like Memphis, TN rehabbers with a hard money lender as you
are looking to make $20-30,000 cannot get a normal mortgage on a
per house minimum. In California house in disrepair. You need to
and on that show they are looking see what homes are listed for in
for $50,000-150,000 per house. your area and figure that when
That's because homes are so much you fix it up you want it to be
more expensive in California nicer and cheaper than all other
where the show is produced. In a equivalent homes on the market
market like Memphis many of the for that neighborhood. Working
backwards from the price you about these types of deals is
could sell at to undercut the that they aren't super quick
market, take out the repair costs money. Typically the work will
and pad it by at least 50% for take a couple of months and then
unforeseen costs(always there) it will usually take a month or
and then subtract your expected two to find a buyer. Hard money
profit and holding lenders typically loan money for
costs(interest), realtor fees(if 6 months as this time frame
you use), advertising and more. usually is sufficient to sell the
If you can still make at least fixed up home.
$20k it should be worth doing.
Homes like these may be homes the
Managing your contractors is a sellers can't afford to fix up or
very important part of this whole simply don't want to fix. In real
process. Ask other investors who estate listings these may say
they know and trust to come in things like handyman special.
and do your work. Require the Foreclosure homes and bank real
work to be done on time and put estate owned(REO) listings are
penalties in the contract for generally good candidates.
late completion. Don't pay for Mailing to out of state landlords
the work up front, but agree to can produce some homes that are
pay them a part like 25% as each good as rental homes typically
25% of the work is completed. need updating as they aren't set
up to sell retail.
One thing important to understand
About the Author:
David Neese is a real estate investing author who offers a free course for real estate investors delivered by email, audio and teleseminar which you can get for free at: http://www.FreeRealEstateInvestingCourses.com
You can find more information about David at http://www.DigitalSuccessCoach.com
Source: www.isnare.com
