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Author Topic: Want to purchase my first Rehab Home  (Read 5709 times)

Offline younginvestor

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Want to purchase my first Rehab Home
« on: December 15, 2006, 07:28:33 pm »
I found a house in Warren Ohio for 20k, needs appx 10k in renovations, I found the home on foreclosures.com, and would like to pick it up, fix it and either rent it out for a year or flip it a.s.a.p, can anyone please tell me of anything that I should be aware of before going foreward?? The homes title is clear
Any help or suggestions would be greatley appreciated,
thanks for your time
 :)

Offline DannyTheGreat

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Re:Want to purchase my first Rehab Home
« Reply #1 on: December 15, 2006, 07:57:56 pm »
Couple things to consider...

How about an ARV?
How fast will it sell when your done renovations?
Are you financing this or using all cash?
How about cash for 2 closings, realtor commissions, misc. costs and carrying it?
"I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."- Isoroku Yamamoto, Japanese Admiral- After the attack on Pearl Harbor

Offline Brandon Lambert

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Re:Want to purchase my first Rehab Home
« Reply #2 on: December 15, 2006, 10:08:02 pm »
Absolutely get a home inspection done.
Eliminate your competition!!
www.probaterealestatedeals.com

Offline younginvestor

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Re:Want to purchase my first Rehab Home
« Reply #3 on: December 16, 2006, 02:32:01 pm »
A home inspection will basically tell us if there are any structural problems or health hazards right? Or is there more to it.

Offline DannyTheGreat

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Re:Want to purchase my first Rehab Home
« Reply #4 on: December 16, 2006, 04:30:42 pm »
A home inspection covers everything that affect the use, health and safety of a property along with some helpful tips and recommendations for beginners. Structural and health hazards will be addresses along with the HVAC, electrical, plumbing, appliances, roof, porches, decks, balconies, garages, grading, basements, stairs, chimneys, fireplaces, etc, etc.

Just remember, they are non-obtrusive, visual inspections. Don't expect them to see through walls and predict the future. Consider a home inspector in medical terms. HI's are the general practitioners, you go to them, they tell you what's wrong, and send you to a specialist to have it fixed or examined in more detail (contractors).
"I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."- Isoroku Yamamoto, Japanese Admiral- After the attack on Pearl Harbor

Offline brucekwb

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Re:Want to purchase my first Rehab Home
« Reply #5 on: December 16, 2006, 05:29:43 pm »
might offer less keep in mind. banks in bussiness to make money not land lord. might talk to contractors, in what it might cost to fix it up for resale. you will get a fairly good inpection done free. and you will have information to use making  the deal. check and see what the avergage price in the area going for that dont need fix up. think to make it worth while you would have to get it at least a 40% to 50%discount. you sould look for many way of income on one place if renting. you could offer a 40% discount close in 60 days. rigths to repaires and entres. get placefix, find you a lender that give noless 75% of apraises some goto 100% . when you have the place fix up your get better apr value. better the deal you get more you make. make your money buying. 20 k fix 10 k w 100k 75% 75k profit 35  k

Offline RBCONDO

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Re:Want to purchase my first Rehab Home
« Reply #6 on: December 26, 2006, 08:49:34 am »
How much are nice homes in the neighborhood going for and how fast are they selling. Also what are local rental amounts? Will they be enough to cover your mortgage payments? How hard is it to find good renters in your area?

My biggest lesson learned the hard way is not to over do the home. Make it nice but not too nice for the neighborhood.

If you can stick to paint, carpet and updating the fixtures you stand to make a good deal of money. If you have to re-model bathrooms, kitchens, put a new roof on etc... you may get in over your head.

Offline JMarc85

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Re:Want to purchase my first Rehab Home
« Reply #7 on: December 26, 2006, 10:08:55 am »
Young investor, that's awesome that you are ready to go! Just make sure you remember 3 things on all investments that you do: IF THE NUMBERS DON'T WORK, DON'T WASTE YOUR TIME!! Make sure you have great comps on the property/area before you begin. Make sure you are gonna be pocketing a nice piece of change at closing. Personally, I don't touch a property unless it's getting me at least 20k, but for your very first property, the education that you will gain will be most important I think. Get some good estimates on repairs from contractors you know and trust while you have the property under contract, as you still will be within your option period to back out if needed. Last but not least, I think that preparing your holding cost according to your local economy is very important. Even though it usually takes about 3 months for me to flip a property, I like to plan in my budget 6 - 8 months depending on the property. (Flips this long better give you a HELL of a profit!! :))

I hope that that was helpful...oh BTW, I can relate to you young investor very well considering I just turned 21 and after my first year of investing have made almost 70k profit. ;)

Offline younginvestor

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Re:Want to purchase my first Rehab Home
« Reply #8 on: December 27, 2006, 08:56:22 am »
Thanks alot, and yes the replies do help out alot.

Offline TARealty

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Re:Want to purchase my first Rehab Home
« Reply #9 on: January 01, 2007, 03:06:01 pm »
Jmac85, What did you do to get money back at closing?

Offline JMarc85

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Re:Want to purchase my first Rehab Home
« Reply #10 on: January 02, 2007, 07:48:49 pm »
If you mean when I said, "...get a nice piece of change at closing," I mean that when you do let's say a rehab deal and you finally sell and close on your property the title company will cut you a check for the difference of your selling price and your payout to your mortgage/lenders (which is your profit).  This works just a little differently but pretty much the same prinicipal when it comes to wholesaling.

Offline deal maker

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Re:Want to purchase my first Rehab Home
« Reply #11 on: January 03, 2007, 02:25:59 pm »
younginvestor

   Are you from the northeast Ohio area? Just wondering because thats were I grew up. Now I live in VA. Have you looked at ARV yet for this property? Kinda a slow market there. I'm not saying it wont work, just take a good look at the numbers and how fast houses are selling for. Let me know how it gos for you! and good luck.

DM  

Offline younginvestor

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Re:Want to purchase my first Rehab Home
« Reply #12 on: January 03, 2007, 03:35:05 pm »
 No, I live in Toronto. Ohio and Michigan are the closest areas to me, that I can drive to, or train, or fly that will be low on costs, and ideal for investment purposes, (i think).
Ohio legislators have said to be cleaning up the cities and neighborhoods, so this is why I figured that investing in Ohio would be ideal, since majour places such as Cleveland, Cincin. etc are working on making the city a better place.
The house that I was after is gone actually, so I couldnt do anything about, because I had the toughest time finding someone to loan me the money. HML, Private lenders etc. alot of them want a track record (2 years) before they will give out the money, others want like 650 or better fico score, which I do not know how I can get, I have Good Credit, however we do not use the 700 point fico system in Ontario, like the U.S, therefore, I cant just pick a number and say thats my fico score.
Anyway the arv was around 50-75k, depending on how nice it was finished.

 




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