Rehabbing is a term commonly used in real estate, which means to renovate or fix-up a piece of real estate. Generally every home or building that is purchased will need some kind of rehabbing, whether small or large. The costs of rehab are an important factor in the profitability of a home, because you’ll ultimately want to make more in selling the property than you spent on your purchase and renovations. Otherwise, you’re going to be in the negative. REI Investment Society will give teach you and give you some tips as to what rehabbing actually entails.
Before you start your rehab project, we have some additional tips for you.
When rehabbing a property, whether your own home or an investment property, it is important to estimate the total costs involved. It is easy to end up over or under investing in rehabbing, so rehabbers will have to find the right balance.
It is important to consider what renovations will be most appealing to a wide audience of potential buyers, and how those renovations will affect the home’s value. When done properly, a house can be bought low, strategically rehabbed and sold to earn a profit.
1.) Make sure you have insurance on the home and you turn on all the utilities.
2.) Thoroughly inspect the property identify all areas that need work. Should include the HVAC, plumbing, electrical system, roof, attic, any visible insulation, walls, ceiling, floors, windows, doors foundation and the basement. If you are not a contractor you can hire a home inspector. The cost of an inspection varies by the size and geographical location of the property.
3.) Take multiple pictures of home before, during and after construction to ensure you are getting what you paid for
4.) Have a meeting with your contractor or line up your sub-contractors and meet with them in order to get bids. Remember to get 3 bids on all work.
5.) Award the bids to the contractor or to the sub-contractors. Get everything in writing including a start and finish date. When paying contractor or sub-contractors make sure you get a lien waiver. (A document from a contractor, subcontractor, supplier or other party holding a mechanics lien stating that they have been paid in full and waiving future lien rights to the disputed property.)
6.) Create a detail Scope Of Work of the interior and exterior of the things that needs to be done and make sure the estimated time of completion date is on that scope of work and stick to that date along with the agreed upon contract price/budget.
7.) Order all new material that will go into the home. Cabinets, countertop, carpet, tile, paint etc. Contractor can do this for you also. If the contractors are doing this please make sure this was already included in your originally agreed price, unless you your contractor quoted you the price for labor only.
8.) Hiring a project manager is always a good idea, if you live out of town, out of the country, have other full-time responsibilities or new to rehabbing.
9.) Order a Security system with cameras to ensure that you can see the rehab process in process and to make sure no one is leaving the property with material you paid for or trespassing.
10.) Be prepared to have some extra money up for reserves in case you go over your budget, due to unforeseen issues that may be brought up during the rehab process.
Rehabbing a property is a tactic that is often times necessary, and can also be very stressful but yet extremely profitable for property owners and investors. If you follow these 10-steps and REI Investment Society courses you will be on your way to successfully flipping rehab properties. Best of luck with your project! http://www.RealEstateInvestmentTraining.Education