3. Notes And Pictures Tell The Story
Take tons of notes and lots of pictures as you walk through a property. Don't count on your memory.
Let the first-hand account help you formulate your plan and questions for the contractor.
Notice details so they can help when you prepare your cost figures.
For example, say you drove up to a property and on quick view it appeared as if it needed a new roof. However after checking the paperwork and on closer inspection, it turned out to be an 8-yr old roof with a lot of life left but it looked worse than it actually was.
In this scenario, instead of thousands of dollars needed for a roof replacement, you could instead spend only several hundred for a good cleaning and it would take care of the issue.
AC units are very important so when you check out those, see if you can locate the model info or a HVAC contractor's sticker on the unit somewhere.
Take a picture of the sticker so you can later call the contractor. In this way, you may be able to learn when it was last serviced and other details which can help determine if it is in good working order.
Locate and check out the electrical breaker boxes. Do they look updated? Again, take pictures and ask an electrician. Follow this same procedure for all of the home's equipment and units.
This can save you time and possibly the cost of providers having to make appointments and trips to give their estimates.
4. Let The Neighborhood Determine Your Materials
When it comes to choosing which materials to purchase, neighborhoods matter. It just makes sense that if you are rehabbing a home in a mid price range neighborhood, you'd make material choices in the mid price range.
And if you have a property in a high end sub-division, you'd need to use higher quality materials, supplies and design pieces.
Everything needs to fit, in order to avoid over-spending and over-compensating. Once you know the goal, you can select the nicest materials available in the specific price range and you'll be able to achieve a great outcome.
5. Home Exteriors - Will Buyers Love It Or Leave It?
Be perceptive and evaluate if the exterior can remain the way it is? Observe the landscaping and determine what level of attention is absolutely necessary.
Sometimes a property looks bad and a thorough cleaning can take care of the problem in a less costly way. Is there water damage or evidence of termites such as wood touching the ground?
Some things you find can be handled at minimal cost, while others may require a bigger time and financial outlay.
The better you do at assessing the property's issues, the better chance you'll have of creating a more accurate cost estimate.
From an appraiser's perspective, certain things affect value and certain things affect marketability.
You will need as many factors of each in your favor as possible in order to get the property sold faster or easier.
For example, waterfront property adds value so they are given a price bump. In such a case, you may even want to consider what can be done inside to enhance the view such as adding more windows if possible.
On the other hand, sometimes yards can reduce the marketability depending on size and condition, so decisions to improve or expand the exterior property are equally key.
In the end, your thorough due diligence can help you create a better and realistic rehab cost estimate so you'll be able to make an offer that gives you the best chance of earning a profit on the property.
When you combine this with good common sense, you'll be well on your way to real estate investing success.
For help navigating your funding options, contact Mike & Mike @ the LM2 Investment Group.
- How to Get Started as a Real Estate Investor - July 16, 2021
- Local Phoenix Real Estate Investor Wins “Best on Tour” - July 16, 2021
- Real Estate Investing Question: Should I Flip or Hold the Property? - July 16, 2021