All Forum Posts by: Jason Deangelis

Kitchen is always #1. Removing walls to create a 'great room' is #2. Baths come next.

Exterior and presentation is key. Simple things like landscaping, trim around the windows, etc help a lot. Obviously paint is the most important but also expensive  

@Jason Deangelis "my second rental property" - Keep that statement in the back of your mind every time you buy, install, or hire contractors to complete projects for you. Like @Brad Jacobson mentioned over-rehabbing is a thing. I sorta made that mistake on my current primary. Could have been another great rental but we went over board on it and now it's really nice. I'm not interested costly repairs, tenants damaging countertops, or expensive fixtures getting broken we wouldn't install for a rental. We see it as a live-in flip at this point. Only time I've bought materials was for a flooring project getting installed by a contractor. 

This market is crazy and it's difficult to stick with a strategy. The deal and numbers can change the plan easily. Try to stay on a narrow path. 

You will not get a better return long term. You will replace the carpet every 5 - 10 years. Any good flooring should be a lifetime product.

Except then who does the receiving, the inspection, the unpacking, and takes the risk of unloading and carrying into the house? It costs the Contractor a lot of time and money to have his crew do all the above. A good Contractor will charge you 25% anyway, so you might as well just put them in charge of all materials right from the get-go....

Hey Jason,

One trap a lot of new investors and flippers fall into is over-rehabbing.  This is extra dangerous now that the market is softening and we don't have a crazy appreciation pillow to break our fall.  

If this is a single family house, you can get away with more rehab but if it's a multifamily, big rehabs will very rarely provide a return via appraisal since appraised amounts are mostly calculated off potential rent income and that rent doesn't change too much. 

Even if the property is single family and wouldn't be considered just a rental, it's still probably wise to not over-rehab.  Appraisers look at a ton of factors including bed/bath count, square footage, acreage, neighborhood, etc. and the cosmetic condition is only one of many factors.  As long as the house looks fine cosmetically (carpet, paint, kitchen, bathrooms, etc.) you'll probably get just as high of an appraisal as an over-remodeled house would if it had all the other same factors.  

Good luck!

This is going to vary a lot depending on your market, the comps, and of course the condition of the property now.

In my market, there is such a wide range of comps (some neighborhoods have ARV's ranging from $1M - $1.85M) that I can get away with about as elaborate of a remodel as I want, and still fall within the ARV range of the comps.

Generally speaking the kitchen, baths, paint, and floors are all important. But if interior doors are in bad shape, those need swapped. If baseboards are in bad shape or can't be saved when replacing the floors, you'll need new baseboards. If the ceiling fans are dusty and dated, those need replaced. If landscaping is overgrown or unattractive, that should be spruced up.

Look at some comparable homes that have sold for top dollar in your neighborhood recently, and check out what the finish package looked like on those properties.