How do I learn what rehab items are big for resale

[Angela P.]

Hi Everyone, I am brand new to BP and Real Estate Investing in general. My main focus at this point is long term rentals (I signed my very first rental lease agreement 2 weeks ago), but I will likely try to do some flips to help fund future long term rentals.

My question is that you see these shows (and I realize they don't show all the details of what flipping a house really entails), and they just KNOW that they can take this wall down or add this feature or that feature.

I was hoping someone would have great blogs or books or forums that would help teach me to see what a property "could be" and to find vision.

Any thoughts or advice would be appreciated!

Angela

[Bryan L.]

(Just my opinion), but be careful about this. I run into people on a regular basis that tell me that they would "love" to rehab and flip houses. In reality, what they would really "love" to do is to be an interior decorator. And they have gotten the two professions confused. If you go into flipping with the mindset of an upscale decorator, you may find yourself losing money instead of making it.

For whatever reason, it seems that women are more likely to fall into this trap. I can see it in their eyes and hear it in their voice when they tell me that they would "love" to flip houses. For the men, the trap that they tend to fall into is "doing the work themselves".

Now, can you make money by making houses "pretty" and "adorable"? And can you make money by doing the work yourself? Yes to both. But be careful. Stay focused on the numbers. Think of the house as an Excel spreadsheet instead of a canvas. Think of yourself as a spec-home builder instead of a custom home builder.

Before you ever make the offer, determine what needs to be done to bring the house up to the quality and design of similar homes in the neighborhood - maybe a little nicer. Then back-out your purchase price based on a conservative ARV of the neighborhood. Don't expect to sale a 150,000 house in a 150,000 neighborhood for 300,000 because you have added gold-plated fixtures, ivory countertops, etc. But hey, if you can get it cheap enough that you can install some gold-cover stuff and still list it for 149,000, then go ahead. But, the TV shows are not very much like real life in my opinion. At least not like my business.