The Rehab Process
When buying distressed/foreclosed property, most are in need of minor to major repairs. One must exerts great effort on the rehab of each property. The rehab process plays a major role in the short and long term successes of your investing business. You want to make quality repairs the first time around. Everyone would like to save money, however investing in value items during the repair might insure longer life span of fixtures. One must always properly control cost. For me, I do my best to avoid underestimating the repair cost, also careful of not paying too much in contracting fees. You must always be aware your capabilities of management and cautious in not going beyond said capacity.
Budgeting for a rehab is important, moreover adhering to the plan and not overrunning cost with earmarks are imperative. The profits and overall growth depend on being acutely aware of our estimates and cost. Try using contractors that have previously done business within the past year or have received strong referrals. Personally for my properties, I do not bid work to the lowest contractor. I believe in value and searching for the best. Rely on fair estimates, reasonably timeline projections, quality work for each deal. The targeted completion time frame for each renovation should be between 30-45 day upon each acquisition.
The Rehab Plan
Divide your scope of work for each property completion as a step by step process: Exterior work, Landscaping, Roofing, Windows, Siding, and Doors. The exterior work is usually completed first in efforts to attract potential tenant base, as well as build neighborhood goodwill. Next, the major systems should be checked and if needed, serviced. Electrical, Plumbing, Heating, and Cooling, these are the heart, brain and veins of most property and must be cared for.
Upon completion, look to complete cosmetic details. In efforts of maximizing equity, replace most fixtures and adds tiles to kitchen and bathroom flooring. Kitchens and bathrooms are two very important rooms in the home. It is important to maintain comfort and functionality as well as aesthetic appeal. When major repairs are completed, next proceed with drywall, paint and cabinet and other fixture installation.
In efforts to sustain low cost, do not contract, what is considered to be “simple labor.” Task which accumulate fees, in which you might be able to complete on your own. All properties must receive the necessary replacement fixtures. Personally I feels the subtle details truly capture the care invested with each renovation. Homes should usually marketed two weeks prior to completion, to begin producing rental leads.
With always keeping low cost as a high propriety, complete all the demolish at one time. Do your best as an investor to be on the job site as often as you can. This may aid in saving you money, as you well see exactly what is going on. Take a proactive approach to investing and do your best to learn everything you can during the process.