What have your house rehabs looked like?

Question

When rehabbing single-family homes. What is the general condition of the house when you buy it? And what do you add to it to get it above market value? What are the special features?

Evelyn Roper · Answer

It all depends on the neighborhood, I think.  If you're in a lower class area, a brand new custom kitchen isn't necessary and you won't likely get a good return on your investment. People who have money for the custom kitchen would rather be in a better neighborhood.  If you are in a higher class area, putting in generic fixtures may cause the home sit on the market for a long time. My goal is to find a balance of the two.  Offer something more than the comparables in the area  (for a quick sell) without over building for the neighborhood.  Look at comparable properties, prioritize what needs to be done.  If you still have a budget left to upgrade and still turn a profit then add the things that will place your property in higher demand.  A $200 front door might be reasonable for some areas whereas a $200 front door would be considered a cheap fix in another.  I like to add a nice tile backsplash in the kitchen and upgrade bathrooms with tile shower surrounds because I can do those myself and they add a lot of value.  This is assuming you are flipping.  I know with rentals, many prefer the pre-fab shower inserts.  You really need to know your market and what your long term goals for the property are to decide what makes sense.

Aaron R. · Answer

@Christine Swaidan Rip it down to the studs and start over. I wouldn't do a remodel where I just cleaned that up.

@Jd Martin Unfortunately they took everything good before leaving. Welder, car, motorcycle...They only left us with a significant amount of trash and junk. We are 3 weeks in to the reno and have filled 7 dumpsters. One was 5 tons over weight!

Mike Dymski · Answer

that looks like the bathroom at the crocodile exhibit

Carolina E. · Answer

I usually look at what other house in the area have and how much they are worth.  Then decide what I want to do.

Chuck Brickman · Answer

I'm in agreement with Evelyn...it depends on the neighborhood and the cost of repairs you have to put in the property. I try to start with comps and work backwards...how much will I need in repairs/holding time, etc.,  to get it where I want it while still preserving my profit ratio. This holds true for buy and holds as well and flips. Once you get an idea of what works well (tiled shower/bath stall, tiled kitchen floor, appliances) in the respective price range this will go pretty quick for you.

As an example, in my lower end properties many times I'll just paint, repair cracks in drywall, tile bath and kitchen, spruce up exterior and it's ready to go. As the ARV goes up I find the extent of repairs/improvements does too. The key for me is to have all this figured out before bidding on the property...then add some additional repair costs :)

I find it really helpful to talk with investor/rehab, realtor colleagues in your area to get a feel of what the ideal marketable property for your price range looks like.

Hope this helps. I am by far not an expert but have been doing this for about 7 years.

JD Martin · Answer

That sucks. One house I bought earlier this year had an old Ford truck in the back yard that appeared whole and worth fixing up. The guy who had power of attorney for the sale told me that the old lady who had the house kind of lost it and filled the truck top to bottom with household trash that had sat in the truck for years. Apparently they still wanted the truck, even with the trash, because they winched it out of there after we had closed (i told them it was OK to take it after closing if they still wanted it).

JD Martin · Answer

Damn, why can't I find houses where someone's left a welder and a car behind? :)  That house is a mess but it looks like you had some choice stuff left in there that can at least be sold for a few bucks.

Most everything I buy needs cosmetics and maybe one major feature added/fixed/replaced. I buy for location, and there are a few things that usually make me walk away - late last year I looked at something I was considering buying but there appeared to be a massive sinkhole developing at the driveway that was taking the slab with it - and usually those things are serious foundation problems, unsolvable/difficult to solve water issues, failing roof support system, no siding or severely damaged siding. Outside of those things, just about everything else can be dealt with at the right price. You can't change the location (reasonably), so the neighborhood has to make sense for your portfolio.

This year, for example, we have rehabbed three different houses (I don't sell anything anymore, I hold & rent everything). I put on one roof, two complete HVAC systems, one set of gutters, one full kitchen redo, one minor kitchen remodel (floors, counters, hardware), 4 bathroom remodels, full floors in one house, and then the requisite painting, trim, etc everywhere.

We add dishwashers, central HVAC in everything we rehab, and try to add some other nice feature when budget allows - full fenced in yard, for example, or nice storage shed, something like that.

Christine Swaidan · Answer

Just curious @Aaron R. do you tear out that bath or just clean it?

Aaron R. · Answer

@Patrick Philip. The houses I buy are generally very ugly. Here is one example. This one will get a full cosmetic rehab including tearing down interior walls, adding an additional bedroom within the existing living space, re-piping with pex, new roof, HVAC, and exterior stucco.

Polar Prutaseranee · Answer

I still consider myself relatively new to the flipping world, but I've been fortunate enough to meet and learn from others along the way. I'm currently working on our fourth flip and a fifth one will begin shortly. I also have our third flip on the market right now waiting to be bought.

The remodels normally take us about 6-8 weeks of rehab time, and then there's the usual 30 day escrow once a buyer wants it. Most of our flips have sold within 10 days. Our current flip is in a different market and is taking a bit longer to sell, but we had a feeling that might happen before we purchased it. All in all, I'd say our flips usually take just a little bit shy of four months from purchase to sold and close of escrow.

What have your house rehabs looked like?

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