Is Rehabbing worth it in this market?

[Greg P.]

Hi. I've heard so many things in this market from the 90 day seasoning to how the market is in general. Is rehabbing really worth it for a new investor in this market? Hard money is tightening up and most HML's will borrow for 6 months. When I see this, it seems like this would be just a big risk. Why not wholesale properties (Avg Profit $5-10k) with no risk rather than rehabbing with all the risk (Avg Profit $15-30k). Am I missing something here? I was looking to start rehabbing, but just wanted to make sure it was worth it. Experienced advice would be grateful. Thank you.

[Dan L.]

I'm primarily a re-hab and hold guy, but I will offer this: If you have a re-hab with up to 30k in profit then it likely will take a lot of work to make that happen, and the 90 days is not an issue because the duration of the construction will be 45 days+ and could be the full 90 depending what needs done and how you go about it.

They do it in 2 weeks on TV, in real life it doesn't work like that.

Wholesale sounds good, 95% of all wholesalers I meet can't bring me a better deal than I can find on my own, not trying to discourage you, just realize that there are so many wannabees out there. if you are wholesaleing rehab properties, your savvy buyers are going to want an absolute steal, I would be surprised if you can break off 5-10k consistently with no money and no risk.

sounds beautiful, that's why the gurus sell that...

now is as good a time to rehab as any if you ask me. if you know what your doing and do your homework you'll do fine. if you are just looking to do your first one, make sure you have plenty of $$ because it WILL take more than you anticipate. I also suggest you do a smaller ranch style house, stay away from really big houses. Watch "the money-pit" movie for inspiration, not "flip this house."