The Major Rehab Business
I don’t know what happened to Zillow, other than they seemed to have overpaid for the houses they bought, and now they will take some millions of dollars in losses. They seem to have been in the major rehab business. Properties that need a major rehab can be some real moneymakers. Experience suggests that the worse the property’s condition, the better the deal usually is and the better the profit will likely be. These properties can be such a good deal because there is so much work to be done. They are a significant undertaking.
The Major Rehab Business
The investor in a major undertaking needs to do to see the project through to completion. Even if you have a general contractor, it is best to remain involved in the project and make decisions and keep things moving along.
- Organize – The first task is to make a list of what needs doing. You can and should use the estimates from your inspection checklist. For example, do any of the major systems need to be upgraded/replaced/installed? Do windows need replacing? What about drywall and trim work? Will the kitchen and baths require major upgrades? What about the floors — how will you cover them? Will you be adding any features outside, such as a deck, fence, or driveway?
- Design – Now is your chance to update and improve the property to make it more appealing and bring it up to modern standards. This is the time you should think about open floor plans, bigger baths, and more extensive and more convenient laundry areas. Now is the time to lay out a fabulous kitchen or a back deck. More lighting and space for all of our modern electronic gadgets can also be very appealing. Don’t be afraid to move or remove a wall or two to open something up or make a larger and more functional room. You may even decide to build an addition.
- Install Systems – Once you have organized your rehab project and laid out a basic design, it is time to get the systems in; Meaning running wires, pipes, and ducts through the property. This is the messiest stage of the rehab process, and your contractors will likely be ripping things apart, sawing, or cutting holes in everything. It can be tricky to get some of these systems in place, especially in older houses.
- Frame It Up – Once you get your systems in place, you can begin to frame everything up and trim everything out. Again, this is often not an easy task. Getting drywall to look smooth and finished is a skill and an art. A good drywall crew and a skilled carpenter are a must here.
- Add Finishes – This is perhaps the most critical step in your project. It is what people will see and touch when looking to rent or buy the property; This is where your good taste and design skills come into play. The trick here is to get all of your finishes, colors, and designs to fit together.
- Put All Together – This can be the most challenging stage to do. Lots of people can begin a project, but few can actually finish. So here is where you will need to keep on top of things. You need to make sure everyone has the parts and equipment they need, that there are light bulbs in the lights, that the toilets flush and that the doorbell works.
Many houses you consider for rehab need a total gut job, but you need to know your tolerance level. We are community members, and we know that rehabbing, if done right, is rewarding from a financial standpoint but is also good for the community—no more drug houses with late-night visitors and less crime. You can be a part of that if you do it right.
Styl Properties, Inc. is here to help homeowners out of any distressed situation.
As investors, we are in business to make a modest profit on any deal. However, we can help homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. Instead, we offer the simple truth about your home and how we can help you sell it fast.
Give us a ring. We would love to help you understand the process and to answer all of your questions. You can reach us at 402 999.0577.