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How to Budget a Rehab on a Hoarder Property

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If you’re following my video on BiggerPockets, you’ll remember that my company recently bought a former marijuana grower. It was illegal to be attacked by the police. I bought it from the seller, I explained it in a previous post, And dumped it all in the trash. Now we are working on turning it over.

This house Filled With a growth device. It was a home of vigorous growth when we bought it.

One of the main tips we mentioned earlier is to avoid being distracted by all the trash and all the crap when you get a property like this. Let’s see how it’s all done and how easy it is to expand your reach and get your contractors up and running.

How to quickly evaluate a property full of junk

If you Watched the last video, This starts at the same place where the last one ended. At this level of the house, things were piled up everywhere, such as growth equipment and aluminum foil. But one of the biggest lessons we told you to get rid of from it is not to be distracted by such things.

Getting everything from such a property makes it a normal project. This is an old house built around 1910. We knew there was a lot to do with it, so we gave ourselves a big budget.

One of the main things we knew we had to deal with was electricity. We already budgeted a lot of brand new electricity because we knew they had hacked what existed to drive a growth business.

What we saw when we first walked through the house was that it wasn’t coded at many levels. And once you’ve done some rehab here in Seattle, you’ll have to bring a lot of stuff into your code.

For example, there are not enough outlets. It has a 2-pole outlet and is not grounded. And as it is the whole house, we knew we had to do a lot of electricity. It was not necessary to carefully inspect every corner of the property to conclude this.

Another thing we knew we had to do was a lot of gypsum board. Today, almost every wall has lath and plaster, and if you cut or remove some of it, a spider web will pop out. Repairs are not easy. It just cracks and begins to crumble.

So we made the big decision to get rid of it and put new gypsum board almost everywhere. Again, to understand this, you only need to look at some of the properties.

Related: Video Walkthrough: How to Analyze Investment Real Estate

Also, I didn’t like the floor plan when I walked. Tap the kitchen in the middle of the house. Nobody likes it these days, so you need to get your kitchen up and running. Especially considering the value you are looking for in a property.

I know it will take a considerable amount of time before moving the kitchen. Requires framing, electricity and plumbing. Again, we knew that we would need a big budget to get the highest amount and make it a little better for future buyers.

We decided to leave the bathroom on this floor as it was and knock down a lot of walls to move the kitchen to another location. Recently I like open spaces. That’s a great factor.

Related: How to find great deals just by changing your mind

Benefits of junk properties

So, with all this in mind, you didn’t have to look at all the space blocked by all the junk to calculate your budget. No matter what else you discover, you can assume that framing, electricity, gypsum board, and plumbing all require a large budget.

In addition, the best part to settle on the fact that a property requires a large budget in advance is to be able to negotiate with the seller.

“Look, I can’t see everything. I’m planning to do it until everything comes out, so I need to budget. This is our suggestion.”

The same logic applies to hoarding homes and the like. And what to guess, those people get it. They know what they live in and what they are trying to market you to.

There is one more bonus I would like to show you before you go. It’s outside the garage.

Remember, did we have these big hydroponic cans and planters everywhere in the house? Well, we have done some research, and we can sell those babies! After all, they are worth something.

When we were collecting all these things, one of our neighbors actually came and offered us a thousand dollars for all of these! We might sell it to them because I think they were sluggish.

The point of the problem is that sometimes you can sell junk and get some of your money back if you buy real estate with lots of it in it. Keep in mind!

Watch the video above to learn more about this property. Also, please like, comment and subscribe. Bigger Pockets YouTube Channel Catch the next episode. I would like to show you the whole process of this property as the flip unfolds.

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