I have my hard money lender in place. Interest-only payments.
Aside from running accurate comps, what are the qualities of a house that will make a good rehab project? I know it’s all about the numbers. What should the finished product look like? If I was going to standardize the procedure? Should I put ceramic tile throughout? Stainless steel appliances? What type of wood should the cabinets be? Should I replace the entire roof no matter what just so it’s brand new? Should I replace the a/c no matter what just so it’s brand new? Should I put expensive outlet covers and light switch covers instead of plain white ones? Expensive-looking ceiling fans? Add a pool as long as it’s legal?
I realize I’m posting a lot, but this forum is my idea of a 12 hour work day at this point. Maybe two months from now, I’ll be spending 12 hours rehabbing a house.
Let's try to reverse engineer the structure first.
Profits. - $ %
Sell finished house realtor fees. - $ 6%
Sell finished house escrow fees. - $ 2.5%
Carrying cost of house. - $
Overhead cost of house. - $
Rehab cost of house. - $
Permit / Architecture / Planning. - $
Purchase house escrow fees. - $ 2%
Cost to purchase house wholesale. - $ 70% of FMV minus your rehab cost or less!
You have to determine accurate comps, value will be in the top 1/3 of area comps as a rehabbed home!
Buy either a 3 bedroom or 4 bedroom home as they are most sought after in any given area!
The finishes inside should be basically builder finish which means functional but not overboard extravagant.
Go into Home Depot and Lowes and ask there design center rep what is most popular with customers for their homes. Ask rep if tile, hardwood, vinyl, carpet what’s most popular? What appliances are most popular, I typically only use stainless in homes over $200k. I use black or white depending on market and cabinets. Ask rep about cabinets? Color / finish / features, etc. Ask rep counter tops? I typically use premade Home Depot / Lowes Formica counter tops in homes to be sold for less than $150k.
No if the roof still has life do not replace it, repair if required! Do not replace the HVAC system unless it’s had catastrophic failure and can not be repaired! Plain white standard switches and plugs when you get over $200k you might go to rocker switches! We use matching $50 to $60 dollar fans.
Do not add a pool it will cost more than you will get for it in the value of the house! Now if your doing a $1m plus home then $40k to $50k for a pool might be a good investment as buyers needs change.
You have a PM system and have been invited to ask direct questions through that system!
You need to look at new homes and home that have been remodeled so you have a good idea of quality and finishes!
Ok so the number 1 thing that sells a home is not how upgraded it is… buy how nice it appears to be… When you sell a home it can have almost everything original and you can still sell for top dollar… I just sold a condo for $40k over the last comp and it was all original, no microwave, no ac and original appliances… But what it did have was really amazing paint that my designer picks, amazing photography, and the home is staged with modern furniture… Its like the difference between my girlfriend when she wakes up in the morning and when she is all dressed up and ready to go out on the town… You can many times see tabloid magazines that show famous people like Brittany Spears with a shaved head and torn sweat pants looking really bad, yet the video of her on MTV makes her look so very hot… Its Called Presentation… same girl only difference is Makeup and Clothes… Makeup and clothes = Paint, Staging, Photography on a house… Lipstick on a pig…
best of luck… all my flips sell in 1 day and for top dollar
There is no reason to capture the paragraph above, we are all typing and replying to the same thread!
Why does this have to be so tough for you? Your making your situation difficult because you keep going in every single direction!
I said to you before you may occasionally find a home that needs almost nothing to sell, but that is the exception and not the rule!
Wholesaling you will run across almost every facet of condition and appeal, fix and flipping means your looking for a home to remodel and fix up.
Wholesale is any house any condition! Fix and flip is finding a home that actually requires remodeling / rehab to restore condition!
In a rare occasion in a specific market with a specific market trend toward a sellers market you could sell ketchup freeze pops to a lady in white gloves! One day you will find that specific property that sells for tens of thousands of dollars with nothing required on your part, until then it’s time to buckle down, pay attention to your specific goal and don’t worry about what someone else is doing?
There are times I have not painted the exterior because it was perfect, neighbors said previous owner just repainted 5 months ago when they were trying to “Short Sale” their home to avoid foreclosure!
I have bought homes with an almost perfect interior paint job which was done 10, 12 or 15 months previous and painting was not required! That doesn’t mean we did not color match and touch up around doors and door jams and walls where wear was showing!
Yes we replace cabinets in a fix and flip if they are older than 7 to 10 years, outdated in appeal and look; or don’t make sense for your updated finishes and design! Selling a property that needs no work is not a fix and flip! A fix and flip requires remodeling / rehab to restore value! I have pulled out almost brand new cabinets because they were installed wrong, were extremely cheap or did not go with the market I want to sell the home in! (Remember brand new purple cabinets do not sell a home when 99.99% of buyers want wood grain cabinets with stain finishes.)
Yes, we replace floors unless they are pristine, perfect and can be preserved during a remodel! I bought a house once that had travertine floors and we protected the floors during construction to retain the travertine floor value! If you go into a home with pink and purple floors you don’t save them even if they are perfect because they have no value or appeal to your end buyer!
In this particular case this seller did nothing to this condo other than sell it! That is not a fix and flip as a fix and flip requires remodeling / rehab to restore value!
Hgronwald Redstar has a hard time with statements so be careful with what you say as Redstar will assume the gospel of real estate even though selling a decent working home as is, is not the same goal that Redstar has to fix and flip a property!
Redstar intends to do demo, make dust, create a mess, redesign / reconfigure a house and remodel / replace / rehab to replace 1650 design with 2017 design. Redstar gets carried away because he confuses different real estate investment methods like in this case buy wholesale and sell retail which is not a fix and flip requiring power tools, a tape measure and some really cool new materials from home depot!
Calm down Redstar this is not a fix and flip so don’t worry as it’s an entirely different method of real estate investment!
And don’t highlight my quote for your next posting in the same thread! :banghead