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Buying a house that needs rehabilitation is a tricky process. In spite of the flipping house strategy is very common among real estate investors – if you don’t know how to rehab the property, it might be a bad investment. Other than that, if you follow some steps, you will be able to achieve the desired result.
Knowing what, when and how to do will be crucial for both successfully rehabilitating and also staying on budget. Keep in mind that this is business and you do not repair houses for charity, you want to make a profit.
Rehab Your Flipped House: 7-Step Guide
This article is a 7-step guide on what to do so that your investment is successful and profitable. Let’s get straight to it.
Step 1: Examine The Touse
Ladies and gentleman, before you buy you have to take a closer look at things, don’t you agree? Inspecting the house prior to buying is absolutely crucial. Therefore, I recommend using a qualified inspector. Check out the American Society of Home Inspectors, where you can find certified pros and receive more info. What should you be looking at when examining the property?
- Inspect the condition of the heating system, plumbing, walls, roofs, ceilings, basements, insulation, electrical system, floors, doors, windows and basically everything that is inside.
- If the condition of some of them is not good, always bring someone with you to give you an approximate idea as to how much the repair will actually cost.
- Record everything; take photos of everything you inspect in the house
- After that, create a plan with different segments which need improving or repairing
- Don’t do that alone, you will not have a good idea of what the overall costs will be
- Use the report provided by the inspector to include some ideas in the plan.
Step 2: Arrange Meetings
After the proper examination, you have created a plan with detailed information on what the condition of all the items is. Now you are ready to start, but not before you find people to work with. It’s very important to know the contractors and subcontractors, who will be working on your property.
Arrange a meeting with them, hear their opinion or advice, discuss with them details.
In addition, let them meet and arrange a certain schedule – who does what and when. This is how they will work as a whole mechanism, not just separate units.
Step 3: Set a Schedule, Set Goals
This step is related to step 2 and happens at the same time. During the meeting with the contractor and subcontractors (if there are any), you have to set a working schedule – when and what everyone does. Make sure all the people that are going to work with you know each other. Make them exchange some contact details, phones, emails, anything that will keep them in touch so that they can follow the schedule.
This will also provide them with the latest information regarding the rehab as well as any changes or delays. Make it clear you are the person who makes the decisions and everything should be approved by you. Time is money, you know that. The more time you spend on rehabbing your house, the more expensive it will be for you and the less you will benefit from selling it afterward.
For this reason, all the people working on the property need to know when and what do so that they will be responsible for their work if something goes wrong. It’s your responsibility, however, to make the process run smoothly and fast. You are the boss and supervisor, it’s all up to you.
Again, the more you prolong the rehab, the more costs it will accumulate. One of the most important investing tips related to flipping a house is to repair it as quickly as you can so that you can sell it as quickly as you can. Especially, if this is your main business. This will put off the process of flipping another house and making more money.
How much time should you invest in rehabbing?
The short answer is less than 3 months, but of course sometimes it might take a little less and sometimes longer depending on the size of the property, its condition, the contractor and subcontractors, etc. It also depends on how well-organized you are and how much time you spend supervising or doing work yourself on the property.
Step 4: Remove The Trash
Once you have met your team members, have set the goals and have prepared the working schedule, you are ready to start working on the property. The first thing to do before the team can start working is to remove all the trash in the house as well as all unnecessary items.
Look around and determine what you don’t need at all and just throw it away.
For example, inside the house you might find old appliances and furniture – get rid of them. Then, check out the exterior – are there any dead trees in the garden? Or maybe some old ramshackle buildings? Bring them
down, remove the trash and move on to the next step.
Step 5: Work on The Property
Always start rehabbing the interior of the house since this is the area which will “swallow” lots of money. You have to know how many interior doors and windows you have to change or repair as well as exterior doors. Carefully measure all the doors and windows since these measurements will be used for the new ones. These are quite costly, as you know. How to stay on budget?
Why don’t you do some of the things yourself? Some of these activities do not require any special skills and you can participate in the process too. It could be fun, entertaining and money saving at the same time.
After that, the real work can start. Before you do anything else, you have to take a look at two main things: the condition of the roof of the house and the foundation. If there is a serious roof problem, fix it before you start working on the interior. Also, fix any foundation issues prior to the other repairs.
Look for uneven or sagging floors, cracked and bowed walls, crooked doors – these all are signs of problems with the foundation. Have a team fix those issues before you move on.
Then, you can start the repairs on the heating system as well as the plumbing and air-conditioning systems. You might have to build entirely new ones, especially plumbing if there are damaged and old pipes. You also have to work on the bathrooms, installing showers, tub, toilets and other things. If you consider installing an outdoor air-conditioner, be careful – someone might steal it since the house will be unoccupied.
When you are ready with the “big” things, it’s time for the walls. First deal with the plasterboard. If you repair it, it will cost cheaper than replacing the sheetrock with a new one. If everything is fine, you can start painting the walls and ceilings. When the paint has dried and everything is fine, you can install the flooring. After that, make sure to install light fixtures and all the appliances in the house. They will give a finished look to the property.
Step 6: Landscape The Touse
A house without a landscape and a beautiful garden doesn’t look very attractive, does it? I recommend you start repairing first the front fences and sidewalks. Then, look at the porches, verandas, and the driveway too. If you have done this, then you have to try to plant some flowers and vegetation by adding soil and fertilizer if needed. Take care of the garden after the other things.
What should you do?
- First of all, try to determine what kinds of flowers and plants you want to have. Is there enough sun? Is the soil suitable for them?
- Find out a gardener or a professional in the field who might discuss with you those ideas and give you sound advice.
- Before you do anything, calculate the costs. Believe me, it can be quite costly, not only to buy them but also maintenance costs. If you are on budget, choose a low-cost option.
Step 7: Final Stages
You have made it so far! Good job, but you haven’t crossed the finish line yet. Don’t let the contractor(s) go unless you have checked all the work they have done. Is it what was initially planned? Does it look finished? Is there more work to do? Hold them accountable for any mistakes or unfinished work.
I recommend you use professional assistance to help you confirm that all the contractors have made all the renovations as part of his job. If the rehab is over, you can freely start selling the house.