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Updated over 7 years ago on . Most recent reply
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Should I rehab based on what I can afford?
Is this a good real estate rehab strategy?
I am looking for my first rehab. I rehabbed my parents house, but that wasn't to prepare it for resale. It just taught me a lot about rehabbing. My ultimate goal is to rehab and resale to an end buyer, so I'd prefer to do a job that is somewhere between well-done and top-notch.
However, I am finding properties in my area that require a lot of work - like 40-80K. I can't find any that require just paint and carpet and maybe a roof. The problem is that I don't always have money for all these repairs and the level of rehab required seems like a lot for a newbie.
So instead, I'm thinking about buying properties and paying for a level of rehab I can afford rather than everything the house needs. For example, I could do some of the heavy work and make it a light rehab project for the next investor who just wants to add paint and carpet and prepare it to be a rental. Or, I could buy a house that may need serious work and just take it up a notch but not all the way. For example, I can remediate the mold and replace some drywall, then resale for someone else to finish the windows, kitchen, baths, etc.
Will it work to base my rehab on what I can afford and not what it takes to make the house whole again?
Most Popular Reply
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No*
The house needs what it needs. Unless your margins are fabulous you can't afford to not maximize the property value and make money.
*Unless you get a steal on an off-market deal