Posted by Lyal on July 20, 2003 at 10:19:28:
Of all the investing niches, rehabbing is the absolute HARDEST way to make money. You need to do all the stuff you need in the other approaches plus you need to manage the rehab. The prevailing wisdom is that you should not do the work yourself (you’ll find homes that are half rehabbed by a burned out investor, you don’t want to become the motivated seller) so you’re left with:
- defining the scope of work (very tough if you don’t have lots of experience)
- getting quotes - hiring contractors (insured? references?)
- managing the work (kinda like baby-sitting),
- kicking a$$ when the work isn’t done or done right
- firing and hiring replacement contractors (more common than you think)
- getting the last 10% of the work done (excruciating!)
During the rehab and the inevitable delays, you have loan payments and utilities to pay.
The rehab will ALWAYS cost more than you think.
After all that you need to start marketing the property.
Tough scenario but true.
If you insist, Kevin’s materials are very good but consider starting in something less demanding (flipping properties, mobile homes…) to start and after you get some experience and get your business up and running you can do an occasional rehab along the way.
All the best, Lyal
PS: I was an attendee of Kevin’s first rehab workshop in Chicago where we hopped in the buses and trouped through ramshackle, stinking potential rehabs, we had a professional contractor with us to give comments and critique, excellent time!). I’ve done quite a bit of rehab since then and primarily focus on mobile homes now.