Selecting The Right Investment Property To Rehab

Real Estate Investing
1

I am an investor, I have done 3 properties and I am still learning as I go. Basically I am trying to break out of the traditional handyman specials where you have to gut everything and try to renovate properties that are in pretty good condition and just need some minor repairs and updated cosmetics.It has been kind of hard to distinguish the difference between the decent fixer uppers vs the homes already in move-in condition.

Thus, how do I avoid properties that are already in move-in condition and have been priced to reflect that value?
VS
How do I choose the right property that is priced below value and may be (dated or need some repairs and cosmetic fix up) rehabbed in order to get a good resell profit?

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Pick properties that are usually in a strategic area making it accessible for basic needs education, health, food, etc… And those which only requires minimal fixes…

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First and foremost, understand the potential profit centers here. That’s called “expected value” or EV for short.

There’s an EV for buying, and a completely separate EV for rehabbing. Many beginning investors make money on the buying side by negotiating good deals, and then hope to break even after rehabbing it, having lost money on the rehab side.

I’d focus on getting great deals where my EV takes little more than a shiny blue pen to bank, and let someone with a hammer and a lot of free time on his hands take care of the rehab side.

While he’s rehabbing and maybe making money months down the road, you’re off pocketing real dough from your negotiating skills alone by signing up every bargain property in town.

And you can let your rehabbers know you’ll have plenty of houses for them whenever they’re ready for the next one.

Joe

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4

Select homes that need cosmetic upgrade, a new kitchen etc. near job centers. You want an area which has shortage in housing and high income.

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5

Thanks for sharing an informative post.

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6

Thanks for sharing some useful information.

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7

Hi,

I am a local florida real estate agent that works with investors providing off market properties. If you are interested in receiveing my inventory please send me your criteria to AgentSheilaScott@gmail.com

8

Target neighborhoods that have older home owners (baby boomers+), The kids are grown and moved out, and the house is too big at this point. In those neighborhoods look for the ones that are showing need of upkeep (chipped paint, old gutters, older windows, etc.). This is an indicator that the owner either doesn’t have the money to keep it up, or the time, or both. If its lived in, its not going to be a gut rehab. Chances are it will be updates in kitchen, baths, flooring, etc. plus replacement of parts (windows, doors, etc.) Good luck, Rob