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Subpar Rehabs Create A Losing Situation For Everyone

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Just because you buy real estate, paint a wall, and lay a carpet doesn’t mean you’re a real estate investor.

Maybe. But that is not a guarantee.

For over a year (perhaps over 15 months), an investor near my home has “rehabed” a small home. He actually bought the house for a fair amount of money — to be honest, I think it’s a better deal than he thought. And there was a refurbishment — many times, and then, and.

In the end, they ended up putting a roof on the house. During and after the winter, they started building decks. It wasn’t very honest, so after working for the first couple of weeks they broke everything and started over. It wasn’t that good after that.

Finally, properties have appeared in MLS. She was quite interested in what the property looked like and went looking for it, but in reality she didn’t have any pictures of the house. Not in MLS or elsewhere.

When the property was sold and closed, I met a new family member who had moved. They were a very nice young couple and enjoyed chatting with them. There are no prompts or questions on our part, how much work they do at home, how bad it is, and basically the need to rehabilitate the home. I started sharing.

So let’s think about this:

  • “Investor” buys a house
  • They rehab for over a year
  • They posted it on MLS without photos
  • They sell to new owners for profits close to retail prices
  • New owners will have to start over most of the house

Now, I think some people think this is completely acceptable. Anyway, after all, this kind of transaction is fine for the end user, as the end user decided to buy it.

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fine.

I make money many times Wholesale A transaction is a transaction that does nothing at all. But this wasn’t a big deal. It wasn’t about putting unrehabilitated properties on MLS and selling them as they were.Was so Flip It means a home, a flip house to the end user.

True win-win deal

When we talk about “two-sided” transactions in the real estate business, this means that it must be positive for all parties to the transaction. Just because you can do a silly home remodeling and sell it for profit doesn’t mean you should.

confirm. It upsets me very much. Why do you do a mediocre job?

My very strong opinion is that the real estate investment community has a role to play and a job to play. Our role is to set better expectations about what the remodeling will look like, to improve the neighborhood and to provide a great place for buyers and clients to live. A better home for tenants to live in. And setting the standard for having a really nice home, rental property, flip, or anything else. Not the cheapest crap we can beat to get the best profit.

Now I understand that investors have skill levels. We also understand that new investors have a learning curve. If you don’t know what to do, bring your partner. Ask a friend. Hire a contractor who does a great job. Learn from someone in your business.

Experience and fire trials

It’s not a remote suggestion that my first 10+ refurbishments looked like what’s going on right now. We also do not suggest that you do not miss a problem, find a wall problem, exceed your budget, or have an inspection item to repair. Property remodeling has a big learning curve in terms of what to fix, how to fix it, and what makes a great home. You need to learn how to prepare, members of the team, what to do on your own, and when to take someone to help.

There is no substitute for someone who has both skill and experience. Bring those people and make sure you are surrounded by professionals, even in your first or second refurbishment project. Make a personal commitment to doing a great job. Don’t settle for an “OK” job.

Application to turnkey business

When we meet clients in town, they see our rehab Rental property And you’ll soon find that they’re better than most of the regular retail flip projects out there. Our entire team is obsessed with having the best rental and turnkey properties out there.

Related: 5 very practical tips from the # 1 book to recommend about house flipping

Our approach to real estate in general is that if there is no remaining useful life of at least 10 years, it will be replaced. All plugs, switches, vents and anything on the wall will be replaced. Plumbing, toilets, bathrooms, they will be replaced. New paint everywhere. Refinish hardwoods as much as possible. Our finish is better than some retail flip houses and these properties will soon be occupied by tenants!

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Wallet approach

Another obvious question here is, are you really making more money by doing substandard work? My guess is different. The better we rehabilitate, take professional photos and clean the property, the faster the property will be rented and sold, and the less problems, questions and negotiations we have.

If it’s a great product, someone will want it. In today’s market and style, a few people want to buy a junk house (my favorite), and most want to buy an “HGTV” one. Buy junk and make it HGTV. Do you know the reason? They produce the highest sales and the highest profits, and the issuance is kept to a minimum.

And because of the work done in advance, future tenants and owners will have a safe, functional and healthy home.

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  • Spend a little more money
  • Providing a better home for tenants and owners
  • Make more or at least more
  • Have a better product
  • Sell ​​it or lease it faster for more money

This is how we should operate as a real estate investor. And this is a situation that truly benefits both sides.

Let’s go win.

Investor: How do you ensure high quality products when you turn your house over? Does sub-par rehabilitation bother you too?

Let’s talk in the comments!

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