REI - Rehab - Posted by Scott Pearson

Real Estate Investing Real Estate Gurus
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Posted by Dwayne Bray on February 22, 2004 at 11:32:05:

One thing to remember when using hard money, you always want your bids at 60-65% ARV.

This includes buying and rehabbing the property!
This leaves you 35% for your profit and payout for hard money.

Good Luck, Dwayne

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REI - Rehab - Posted by Scott Pearson

Posted by Scott Pearson on May 20, 2000 at 08:18:11:

Thanks to all who have taken the time to answer my questions about REI. I greatly appreciate your suggestions and recommendations. This site does offer a wealth of valuable information.

My wife and I think the one branch of REI we would like to consider is home rehab. Is there a specific formula for how much one should spend in order to fix up the place? Assuming we find a place that is priced below the market, how much money does one put into new carpeting, paint, bathroom fixtures, land scaping, etc.

Also, can anyone please recommend a good book or videotape on the subject that is written with the beginner in mind.

Thanks for your reponse,
Scott

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Re: REI - Rehab-Calc a wholesale price. - Posted by Jim

Posted by Jim on May 26, 2000 at 03:32:28:

Every rehab deal is differant. But if you calculate buying cost, holding cost, selling cost, hedge factor and PROFIT you come to about 67% to 70% of retail price. Then you MUST subtract repair cost. This give you a wholesale price for the property (I NEVER pay wholesale price - that’s what I sell it for). Then subtract a profit margin for the middle man (you). That’s what you offer the seller. If I do the rehab myself, it’s added to PROFIT.

GO get’em!

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Rehab’d value = 65% to 80% FMV - Posted by Rolfe Kurtyka

Posted by Rolfe Kurtyka on May 24, 2000 at 24:40:31:

Scott;

My rule of thumb; The purchase plus the rehab must equal less than 80% of the fixed-up fair market value of the property. Many investors will say that is way to low, they’d like to see a purchase plus rehab at no more than 65% of FMV. Remember, $10,000 over 3 or 4 months is not worth the risk - a JOB would pay that much. You must make enough to make it all worthwhile. Chose what you do carefully. Only spend money on those items where you will see a 100% return.

Good Luck! Rolfe

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Re: REI - Rehab - Posted by Rob FL

Posted by Rob FL on May 22, 2000 at 11:31:50:

You may want to head over to your local Home Depot. They have lots of info available there including pamphlets, books, and classes.