What are the biggest challenges in rehabbing today?
I think some of the biggest challenges in rehabbing are:
Underestimating how much work needs to be done
Underestimating how much the necessary work will cost.
Over-improving a property where the additional improvements don’t add additional value above their cost, or worse, below their cost.
Carrying costs while it’s vacant
Getting new financing in this market to pay for it.
Finding inventory to purchase at the right price in relation to remodel costs!
Finding and keeping qualified sub-contractors who can perform ontime and under budget!
…AND, underestimating how long it will take. You need to estimate how long you think it will take and then double it.
Also, If you have people working on your property, you should always try and be there. Otherwise, they can end up doing things all wrong or not the way you want and redo’s are very costly.
This is why like to try and do all the work myself or with a few guys I have had working for me for a while. They pretty much know how I like things done after yelling at them a few hundred times…lol
The big challenge now is finding a qualified buyer.
If you can find a buyer that has down payment money and a job, then you have trouble finding a bank to write a mortgage for anything more than below foreclosure price.
There are lots of buyers out there with no income, no down payment, and lousy credit. I don’t find them of much value to me.
For me operating in a small town the biggest issue is finding good reliable contractors that will do quality work in a timely manner.
First and worst – putting too many bells and whistles into a rental, making it much nicer and higher-end than its neighboring houses. You don’t get higher rents.
Finding quality, honest, dependable sub-contractors. I do what I can on my own, to save money, and hire out only what is necessary.
Being realistic about what the rehab will cost.
my biggest challenge is my contractors schedule,he is great at what he does, dependable, works at a fair price,the problem is he is so good that he is booked up,I try to set closing dates based on his schedule
I don’t want to sound like a paid endorsement here but … for those folks trying to find good contractors have you tried Angie’s List (angieslist.com)?
If you have tried it and still had problems, could you describe what happened? So far my experience has been that the site has been very useful in identifying quality people.
So, are you?