WHICH REPAIRS ARE MOST PROFITABLE? - Posted by Crissie C. Luckey, J.D.

Posted by Chris on February 06, 2000 at 02:33:18:

You could go to the American Society of Home Inspectors website to locate an ASHI inspector in your area.

An investor friend gets so far into “staging” that in the middle of summer he turns on the fireplace while cranking up the air conditioning to compensate for the heat.

Other things to do are to get a nice bathroom towel set and shower curtain that is put up when prospects come by. After they decide to buy this stuff is taken down and used for the next house showing.

Scents are another thing that gets the thought of this being home in their minds. If you have people coming by to look at the house get some ready made refrigerated cookie dough and bake cookies for them. The smell is great.

http://www.ashi.com/

  • Have fun, Chris

WHICH REPAIRS ARE MOST PROFITABLE? - Posted by Crissie C. Luckey, J.D.

Posted by Crissie C. Luckey, J.D. on February 05, 2000 at 19:46:46:

Hi All,

I am just getting started in the rehab/flipping business, and was wondering what repairs and improvements are most profitable?

When I say “profitable”, I mean: What repairs or improvements add the most resale dollar relative to the cost of doing them?

Also, what kinds of needed repairs are definite “red lights” that indicate a NO GO on a rehab project?

Thanx, Crissie

Re: WHICH REPAIRS ARE MOST PROFITABLE? - Posted by JoeB(Atlanta)

Posted by JoeB(Atlanta) on February 05, 2000 at 21:33:15:

Hi Crissie, of course everyone will have a slightly different opinion on this and it depends partly on the price of the home, and rehab budget but here goes:

On rehabs, always paint int/ext and landscape! (you’ve got to draw the eye and the bodies into your house);
do a thorough, sparkling cleaning;
new carpet/flooring;
new/update kitchen–either repaint the wooden cabs (in a lower end home) and new knobs & hinges, or all new cabs;
new light fixtures and/or ceiling fans ($50 white) throughout;
do some ‘staging’: meaning unlit candles in bath and on mantle, rolled towels in bath, rolled napkins & wine bottle & glasses & fake bread & bottles of infused oils in kitchen. If you make the house have a lived-in feeling, people will buy it.

Most rehabbers probably do most of the above, except for the landscaping and staging–but we get them inside and get them hooked with those two items.

‘No go’ items for the average rehabber are bad roofs, and structural repairs. These don’t bother me personally because we mostly do homes from the 1920’s and 1930’s where we always encounter these two and have good subs to handle the repairs. But roofs (especially sagging w/rotten decking) and structural (sagging floors, joists) can hold many unpleasant surprises.

Hope this helps,
Joe Brillante

Re: WHICH REPAIRS ARE MOST PROFITABLE? - Posted by Chris

Posted by Chris on February 05, 2000 at 21:22:18:

Crissie-

Go for paint and cut the grass. Make the exterior presentable. If people are scared by what it looks like outside they will not want to see what you have done inside.

On the inside kitchens and bathrooms first. If it costs 70% to fix something up replace it. Contractors can do some neat tricks such as reglazing a bathtub that looks nasty and that you would think needs replaced.

The general rule is to get $2 out of every $1 in fix up. Avoid such things that cost a lot and take time such as room additions. Try to remember that you are not going to live in the place and not get too attached.

Check out this site (without the space):

http://www.rehab wiz.com/

-Good Luck, Chris

Re: WHICH REPAIRS ARE MOST PROFITABLE? - Posted by Crissie C. Luckey, J.D. (MS)

Posted by Crissie C. Luckey, J.D. (MS) on February 06, 2000 at 01:41:58:

Thanks for the good ideas. It never would have occurred to me to “stage” a home! But it sounds like a wonderful suggestion. The only hitch is that the place may be tenant-occupied when I get ready to re-sell it, so staging may be difficult.

On the “no-go” items, is there a national home inspection service that can alert me to those types of problems beforehand? Or are there general signs the average layperson can look for as “red flags” for further checking before purchase?

Thanks, Crissie

Re: WHICH REPAIRS ARE MOST PROFITABLE? - Posted by JoeB(Atlanta)

Posted by JoeB(Atlanta) on February 06, 2000 at 09:53:45:

Hi Crissie, our rehab houses are always vacant when we start, so I assumed yours would be. It might be tough to do paint/floors/etc with tenants in there, just food for thought.

Yes, the average layperson can observe some of the ‘no-go’ items I referred to (although it’s a good idea to hire a professional home inspector–see Chris’s post–until you’re very experienced).

Roof needs to be replaced whenever you start to see ‘abnormal spacing’ between the shingles or some curling on the edges of the shingles. Bad decking (under the shingles) can sometimes be observed, most often where you see strange dips/sags in the roofline.

Structural problems can be difficult to observe and vary from cheap to expensive to fix…but look for rotten/sagging floor joists and sill plates (the main beam that runs around edge of house/foundation) from underneath the house with a flashlight. Also feel for ‘too much bounce’ in the floors, when you’re walking on them.

Hope this helps,
Joe Brillante