Rehabbing?
I noticed this mentioned a few times and i tried to look it up in the FAQ's, but they didn't help me understand it much. Could someone help us understand this better and help us decide if this is what we want? thank you much
I'm assuming your talking rehabs. Basically, this is how it works.
An investor will get a property, distressed, foreclosed, etc. They won't get it unless it has profit potential.
Once they have this property, they either work with a rehabber, or sell the house or assign the contract to a rehabber for a profit.
The rehabber will do repairs to the house, carpet, electrical, paint, appliances, roof, what ever the case may be, to make the house sellable and attractive to a buyer who wants to live there, for a larger profit, (usually 25-30k)
Hope this helps
[addsig]
said another way...
are selling for. This is why it is important to buy properties for the right price and have a good idea of what is will cost you to renovate the property and you must know how much you want to make on the property.
rehab is short for "rehabilitate". This is what you do when you renovate the property. You can do this on a cosmetic basis with just painting or light landscaping to make a property look good, kind of like a woman putting on makeup. You can also do structural renovation where you add a floor, change the floor plan, add/subtract rooms, open up rooms to create larger spaces, etc.
You can make a fantastic living doing this if you are determined and have the patience and organizational skills to follow up on many individuals to make sure things are getting done and you have to pay attention to the details. People pay for the details, a.k.a. quality. Anyone can buy junk anywhere. It is your role as a "rehabber" to create value in the work you do. This is where comes the financial side. You pay $100k for a property. It costs you $20K in "renovation" costs. You market the property for $140K. Your value add is $20K. Your total selling price should be in the market for what other comparable properties (a.k.a. "comps"
Respectfully,
Phil
Phillip Herrejon
312.375.7132
Thanks a whole lot for the information. I had suspected that was what it was but not enough to jump to conclusions. I have always known this process as renovation, so i had not thought of it known as another way.
Pherrejon - I am originally from Chicago, how much potential have you seen near the city or the outlying suburbs - such as Elgin?
Thanks a lot for the help from both of you. Is there a general guidleline for how far below market value to go? Or is that something that should be based on how much capital that we have?