So you want to rehab houses, but don’t know where to begin? I mean, how hard can it be to buy a house, rehab it, and sell it, right? On TV, it all happens in thirty or sixty minutes and they make it look so seamless.
Before you start Real Estate Rehabbing, it is imperative to have your own financial house in order. Jumping into a Real Estate Rehab without a solid foundation will make it very difficult, if not impossible, to succeed as a Real Estate Rehab Investor.
Real Estate Rehabs usually fall into three basic categories:
Fix and Flip
Each type of category carries different levels of risk. As seasoned Real Estate Investing experts, we recommend for most people to start by rehabbing a house for their own personal use. This usually carries the least amount of risk since you will not have the added carrying cost of a second property. If you live in the house while you’re renovating it, then you’ll just have your regular monthly living expenses.
Furthermore, there are other great advantages to living is a home while rehabbing it. For starters, you don’t have the same time pressure. When you are rehabbing a property with the idea of flipping it, you’re losing a little piece of your profit everyday. Holding costs are always on a ticking clock. When you experience a delay, you lose money. If the market makes a quick sale difficult, you lose money. The risks associated with flipping are catastrophic.
Make It Your Own
When you’re modernizing a house with the intention of flipping it, you need to keep the end user in mind. This typically means making conservative decisions that will appeal to a broad number of potential home buyers.
On the other hand, If the rehab is going to be your residence you now have the ability to incorporate your own personal taste and style. If you want yellow walls and are looking to use the ceiling as an art canvas, then go for it. Rehabbing a house for your own use gives you the opportunity to create a home that fits the way you live.
You still need to keep resale in the back of your mind if you have any intention of selling in the near future. Determine what you resale timeframe might be and work with that in mind. If it is going to be a long-term hold you should do whatever makes you happy and fits your home lifestyle.
Learn As You Go
No matter how much you study and prepare, first time real estate rehabbers will make a tremendous amount of mistakes. It is much easier to learn from those mistakes if you aren’t under the constant pressure of having to complete a flip.
Instead of trying to earn a million dollars on your first deal, look for one that can propel you to future success. Start small and keep the project within your ability. With each success you can move into much bigger and tougher projects. As your ability grows, your profits will increase and your profits will skyrocket.
For more information on real estate investing tips, fix and flip advice, real estate wholesaling education, real estate investor training and much more, make sure to follow our blog at: http://fortuneweavers.com/blog/