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Baltimore, Maryland 21202

Baltimore, Maryland 21202

test, Alaska

Financial Forecast:

Price: $ 35.00

Estimated Repairs: $ 2,000.00

Resale Price: $ 40,000.00

Net Profit: $ 3,000.00

Home» Rehab 101
If you find yourself reading this page your best bet is just to pick up the phone and call us. However, if you just have to flip a house without having an experienced mentor in your back pocket, follow these basic rules to limit the risk of a huge loss on your first deal.
 
  1. Focus on a specific area and then study it like crazy BEFORE YOU BUY! You have to find out what the price point of the neighborhood is in order to know what to offer. The old rule was 'Buy the worst home in the best neighborhoods'. No more. Buy the nicest short sale with the least amount of work so you can sell it fast at a big discount over other houses' is now the new rule. Why buy a fixer upper if you dont have to?
  2. Do not overpay for somebody else’s problem! You arent the reason the owner went into foreclosure or the bank is on the verge of bankruptcy. It is their problem so do not get emotional about it. Know what the number is and stick to it. If they say no go down the street to the next house in pre-foreclosure.
  3. Dont be cheap. It could cost you $10,000 or more! Hire an inspector before you buy a property and buy only cosmetic problems. Focus on homes that only need painted, landscaped, smell bad, stains on their carpet, etc.
  4. Avoid homes that have major structural problems such as roofs needing replaced, foundation work needing done or major plumbing or electrical work needing done unless the home can be purchased at steep discounts. This kind of work always leads to unseen issues. If you are new you do not have to take on that kin dof risk when there are plenty of houses that need very little work to resell.
  5. Rehab the property quickly and with professionals. It will save you money in the long run. Cousin Joe will only cost you money in permit fines, week long delays, and screw ups. If you cant afford to pay a professional, you cant afford to be rehabbing. Research the contractors like your life depended on it and NEVER pay them upfront for 'materials'. Get the list and go buy it yourself so they dont go to Hawaii with your money. If it will take you longer than 30 days to turn the house around....RUN!
  6. Do not over improve the house. Don't start ripping out walls because you'd like it better. Will it add value to the house? Focus on the kitchen, master bed and bath, and make sure everything else is neat and clean. Leave the major rehabs to the guys who have been doing it for years. Thats not for you if you are reading this page!
  7. Market the House. Do not make the mistake of putting your standard Home Depot sign in the yard and hope it sells. Wont happen. If you dont want to hire a Realtor, you better get the house up on every real estate website you can. Plan on spending 1-2% of the sale price advertising it to find a buyer. For less than $250, this is the best FSBO System on the market.
  8. Use Disclosures. This is the law in every state. Just because you are not a Realtor will not protect you. If you lie about the issues facing the house or do not disclose the fact that the basement floods you better have a great lawyer on speed dial.
  9. Dont spend all your profits. Stash some money away for a rainy day. You never know when the real estate market might crash!