subject: Things To Ponder List When House Rehabbing [print this page] House rehabbing, as you know, isnt as simple as house wholesaling. It is a test of knowledge, skill, and understanding for a real estate investor. It can be use to gauge an investors maturity in real estate investing.
It is important to do your homework first before you engage yourself to the great task of rehabbing homes. You have a lot of consideration to make to avoid costly mistakes. Remember, house rehabbing entails huge amounts of time, effort, and money. You cant afford to lose in this game.
Here is a list of things you should ponder on before you initiate the rehabbing project.
Do I have the right house? It will all begin with finding the right rehabbing house. This is the most crucial part, the beginning.
Just remember that in real estate investing, you make profit when buying and not when youre selling. The secret is to always buy properties at below market cost. Rehabbing properties are usually cheap because of their distressed condition. The only thing you must be careful of is the extent of repairs needed to improve the houses state. If the repair costs to shoulder are too high, most likely, youre not making a good deal from it. You might not withstand the demands in time, effort, and money.
However, do not parry from ugly, beaten houses. If you think you can handle the house rehabbing well, do it. The outcome is rewarding. Huge profits await you, and the fulfillment is awesome once you transform an eyesore into a real beauty.
Am I financially capable? Rehabbing homes is financially challenging. It starts with purchasing the house. You dont do arrangement of contracts her the way you do with wholesaling. You need to hire people. You need contractor and appraiser. You need to buy the materials you need for repairs. You cant start without money.
This is when hard money loans enter the scene. These loans can cover the 100% expenses needed when rehabbing properties. They are fast and easy to process. Private money lenders are everywhere and they are easy to find whenever an investor needs hard money loans for real estate deals.
What is my exit strategy? You need to determine this as early as possible. This process is creating a timeline of your house rehabbing project. Will it take you 4 months or five months to finish house renovation? When can you sell the property after rehabbing it? This will help you get things done accordingly. Your exit strategy also involves the time as to when youre going to pay back the money you borrowed.
Think about these considerations carefully before you start your project. Plan ahead so you wouldnt get lost in the middle of your rehab project. Prevention is better than cure.
