I am new to rehabbing - and I have located a property & done initial research on the appraised value & market value of the home. Question is,
Can you put a contract down without having a contractor go out & look at the property to assess the cost to rehab it?
Do you pay for an appraisal before you actually buy the property - or do you add a certain clause in the contract?
Does anyone know the steps to initiate a successful rehab acquisition?
It doesn’t sound to me like you’re ready to put an offer in on anything yet. You have a lot more research and education to do if you want to be successful.
If you’re brand new and don’t know the rehab costs, then I would have a contractor go through the property with you and determine the repair value. Based on this repair value, I would make an offer based on the numbers.
I never get an appraisal before I write the offer, but the bank will require one if you’re getting a loan.
The first step in initiating a successful rehab or any other REI program is to understand your business. The vast majority of newbies fail and going into it not knowing what you’re doing is a recipe for disaster.
Good Luck,
Mike
nic,
Im 23and bought my first flip about 10 months ago, im now on my third and its almost complete with 2 potential buyers. It is true that you need to understand the business, but I learn something new every day, and If I waited till I knew everything, id never buy a house. Do your research, if its a home that should be worth 100k, its for sale for 55k, (theres no structural damage,Make sure of that!)just cosmetics, buy it. As long as you have a little money,and a little common sense, youll figure it out.
You might want to read Rick Villani’s book called “Flip”. I’ve been reading it to see if it was worth buying for beginning flippers and think it can even help experienced investors. You should already be familiar with the price ranges in an area, so research should be minimal on deals. If a property is good, you’ll at least get it under contract asap then further evaluate.
Sounds like you’re doing a ton of research up front, but not even talking to the owner, which can be a waste of time. Rehabbers first find a property, find the owner to see if they’re willing to sell, do a quick evaluation, make an offer contigent upon inspection and/or partner approval, then negotiate the deal. There’s often an option so they can quickly assignment if it has room. That’s not the exact process for every deal, but it’s what we usually do.
there is a fine balance between researching and over reserching. You have to be bale ot run initial numbers in your head as you walk through the property. If it looks good, put it under contract and then get the contractors in for the specifics. Otherwise you may lose he opportunity by overthinking.