1st Rehab Pitfalls
Hello. I am closing on my first rehab next week and wanted to know of any major pitfalls that new rehabbers are likely to hit. Any advice on what to watch out for and what to try and avoid is greatly appreciated.
Thanks!
Rob
Potential pitfalls are to some extent based on what you intend to do with the property once you finish rehab (retail, hold and rent, wholesale, etc.)
If you plan to retail it and turn it quick, the goal is to bring the house up to like-new or near-new condition. You don't want to overspend on the repairs but you also don't want to leave things undone that might detract from a quick sale.
My advice is to build a network of reliable contractors that won't rip you off. Expect to pay a fair price (they are in this to make money too). But there are huge differences in contractor pricing and you want to make sure you're dealing with the ones that understand rehabing and wholesale pricing.
Two of the biggest pitfalls to watch out for are...
underestimating the amount of money you will invest into the property and overestimating the amount you can resell it for.
Over rehabbing or under rehabbing are the worst things you can do. Knowing your exact target buyers is the most valuable information you can have. Go out and look at every house in your neighborhood that is for sale while you are rehabbing. This will give you a understanding of what your buyers will be looking at while they are looking at your house. You will know what to do to make sure your house is at worst on par with the competition or at best, just a little bit nicer, but not too nice.
Ah men ReHabinator !!!
you couldnt be anymore spot on.