Q. What are some advantages to rehabs?
Ans. There are many benefits! Rehabs are an excellent way to make quick cash, get investors to call you, get the experience and get larger more profitable projects, raise value in neighborhoods, have an out if you get stuck with the property, easy to find, and it can be very fun and rewarding.
Q. What are some disadvantages to doing rehabs?
Ans. There are a few disadvantages. First of all, you need cash! You need to have it on hand or have access to it. Also, there is no passive income coming in, but the profits made can be used to acquire passive income producing properties that generate positive monthly cash flow. Finally, rehabbing can be very frustrating and stressful when problems arise. Expect the unexpected challenges and learn to handle the stress or rehabbing will be difficult for you.
Q.
Why are investors interested in rehabs?
Ans. There a many investors who are willing to wholesale you properties under market value and ready to rehab. If the wholesaling fee is reasonable, these deals can be great!
Q. How will purchasing more than one rehab raise the value in neighborhoods?
Ans.
You can buy two or three houses in a row, or in the same nieghborhood, rehab them, and raise property values, thus benefiting your profits year after year.
Q. Is it true that rehabs can be very time intensive?
Ans. That is not exactly true. If you are organized, there is no need to be a slave to the rehab.
Q. What signs should I look for when deciding if a rehab deal is good or bad?
Ans. It is a good sign when you can get in easily, spend a minimal amount of money, do as little work as possible, spend the least amount of time, and make a large profit. It is a bad sign when you are spending lots of money and time, doing lots of work, and the profit barely covers your costs.
Q. What types of things should consider when purchasing a rehab property?
Ans. The house should have a good location, have trash inside or out, bad carpet, have the ability to add square footage easily, animal smells, closed off kitchen that can be opened up, overgrown yard or bushes, and really good or bad items (i.e. roof, carpets, windows).
Q. What are the sizzle factors that will make my rehab worth more money?
Ans. A few things that will make your rehab a profitable venture are; shutters, crown molding (white), fences, shower heads, faux paint, landscaping, garage door, and make sure that everything within 8 feet of the entryway is clean and appealing. Remember, first impressions are always the most important!
Q. How do I find the good deals?
Ans.
There are numerous ways to find good deals. Here are few;
1. Buy Wholesale - Investors will already have wholesale properties to sale you. They make a fee, and you obtain a property from which to profit. Use wholesalers if the price is right and the numbers work.
2. Driving for Dollars - Driving, jogging, biking, walking, or rollerblading. Whatever it is that you do, carry a notebook with you and jot down addresses of possible rehab properties. When you get home, look them up in public records and find a way to contact the owners. They may just be motivated sellers!
3. Bird Dogs - These are scouts who find properties for you. Setup a tipping program for them ranging from $10 for every property photo they bring you with an address and contact information, to $500 to $2000 for deals that close.
4. Real Estate Brokers - There are many on the MLS (Multiple Listing Service). Real estate brokers have access to deals that may work for you.
Q. I found a rehab property, now what do I do?
Ans. You should walk through the property and roughly calculate what the rehab will cost, you will be in a better position to present the offer when the time comes. These rough calculations can be done within minutes. A few things to calculate would be; flooring, bathrooms, kitchen and appliances, exterior landscaping, doors and windows, painting, closing costs, taxes, insurance, and holding costs.
Q. What are some tips for making good offers to the seller?
Ans. Make more than one offer. Make at least three offers to the owner so they fell they have choices. If you get them thinking about a few choices they are more likely to choose at least one of the offers. If you only restrict them to one offer, they will most likely either reject or counter-offer.
Q. What are some tips for making good offers to the bank?
Ans. Banks want to know what the price is right off the bat. When you submit an offer they either accept or reject it. If the property is bank owned (REO), the bank will ask for your best and highest offer, then choose between the two submitted.
Q. How should I make an offer when a real estate broker is involved?
Ans. Control the deal. Even when brokers are involved, you can speak with the sellers.
