How Can You Make A Good Living Rehabbing?
Over the last couple of years I've been done some rehabbing primarily as a hobby. Purchased 3 houses since I started. Flipped the first one for about $15k profit, renting the second and currently working on and planning to flip the 3rd. I've gotten to the point I can do the basics pretty well, plumbing, drywall, windows, painting, roofing, and some electric.
The question I have is that I am currently considering a career change and would be interested in hearing from people that do this full time and are making a going living at this. In particuliar some things I should consider if I want to do more than just flip a few houses a year.
Thanks
isn't
'flipping" where you assign the contract to ANOTHER rehabber for a fee (without ever doing work yourself?)
No, that's wholesaling.
OK, thanks
I am in a similar situation. I am currently looking for my 3 house to buy, fix, and sell. My first proved to be very profitable, over $100K. Likewise with number 2. I have established a plan with certain criteria and will not deviate unless am forced to because of changes within the real estate market in my area. We do not use a broker to sell, my wife handles that task. The right house, for the right price in the right location. Taxes are our biggest problem for now. Good luck with your career change, I may be right behind you!
KSchevis, $100k per house - Wow!
You mind giving some details behind what your doing (how you find them, who's doing repairs, etc.) .
I think part of what I need to do is go into more upscale homes and contract more of the work out.
Part of what I've been dealing with so far is repo'd Hud homes that I do most of the work myself.
That's your key...HUD.
Who's going to pay big dollars for a HUD dud?
If you want big profits, you need big sales.
Progm94.... This is how it has been working for me. House 1 was owned by friends who had inherieted it over 10 yrs ago. A two story colonial w/ garage and basement. It was really tired and needed updating. It was in a great neighborhood. The brother and sister who owned it wanted out. We made them a fair price offer without a broker. they accepted.
I do most of my own work. I have my contractors license in this state but, I do not work in the trades. I have a full time job with lots of vacation time. My wife and I flipped this house in 4 months. The only things I contracted out were the granite kitchen counter and the re-finishing of the hardwood floors. My father did most of my painting. The house was vacant so it looked brand new when my wife ran the open house. (no broker).
House 2. 3 bedroom ranch in a great neighborhood. Built in 1960, same kitchen, pink and green! I gutted the kitchen and broke down the wall to the 1 car garage. That garage became the family room. Insulation, windows, and slider to the yard. Painted all rooms (dad) . Updated the 1.5 baths. new windows, new roof shingles, new vinyl siding. I used the same maple cabinets, same black appliances, and same granite counter.
My key is stay very residential and off the main streets. Find old tired low end houses for young couples and bring them up to today's standards. I offer a great house at a competative rate for our area.
Thanks KSchevis
Sounds like we have similiar approaches but profit margin is a lot higher on the properties your doing. thanks
The profit margin could have to do with the region of the country. I do not know what homes go for in your area. Something you said seems puzzling. If you are going to do flipping full time, you would have more time to do the work yourself. If you contract out more work you are spending sweat equity that could be in your pocket. I know that if I could do it full time I could turn the house over faster. Allowing for more houses per year. 2 or 3.
I neglected to answer one of your questions... I found house number 2 thru a listing on the local real estate search page. Basically it said "as is" I knew it needed work so it would be perfect. I don't want the house that's been updated already, that's where the money is. I went that afternoon. The surprise I got was a bonus. The realtor told me that the house had faild a home inspection and the young couple backed out because they could not afford to fix it. The owner dropped the price $20K that afternoon I walked in. Timing!
One other quick note. When I wrote the proposal I put in writing that we would wave the home inspection. I had looked the property over myself and knew why it failed the previous inspection. I also said that I would remove the remainder of personal items that were left. The owner went for my offer because of those 2 stipulations. The personal items went right into the dumpster that I rented or to Goodwill for an extra tax write off. Save those receipts!
Do any of you participate in wholesaling? What are the advantages and disadvantages of this as compared to retailing? Is it more difficult?
Clueless, I am a newbie looking to get into REI in about a year.