Rehabbing houses is a popular business option for many entrepreneurs. Like any profession we are always looking for ideas and strategies to improve our business and increase profit margins. After successfully rehabbing hundreds of properties and having seen the good, bad and ugly in addition to what sets apart the marginal projects for the highly successful ones, I find a few common trends. Take note of the following pointers and you will be on your way to rehabbing success!
Buying it Right
Successful rehabbing starts with buying property right and performing your due diligence to determine that the numbers are favorable. The more of these projects you do, the faster you will become at putting the numbers together. But when you are starting out, don’t skimp on this step. Take your time and make sure you are comfortable with the numbers. You may have to creatively finance the deal in such a way so the numbers are in your favor. How you finance the property and structure the carrying costs will allow you more opportunity for success.
Choosing the right contractor
Choosing the right contractor is one of the most critical factors in completing a successful rehab. Your contractor controls so many factors: cost, time and value added things like their expertise with layout, design, recommendations, and finding better ways of achieving your end goal while reducing cost. Your contractor is like your quarterback – he has to execute your game plan effectively.
Determining your scope of work
Determining your scope of work is extremely important. This is where you set your budget and identify those items that are required and items that can be removed if other unforeseen things arise during the rehab. Your scope of work is the foundation of your project. This is your game plan for completing your project successfully. Your written scope of work will be used to give to contractors so they can give you apples to apples quotes. They need to know exactly what you want done and what level of finishes you are expecting in your completed project.
One of the most underrated aspects to successfully rehabbing is planning. Many investors miss the planning phase of the renovation process. The planning phase is where you not only determine your layout, but also having these plans drawn up in detail. This is also where you determine all the specifics regarding your project like material selection, paint colors and identifying specialty items that will need to be ordered to prevent delays in the project. If you want to execute your game plan successfully you have got to know your key players and materials. You can’t execute the game plan without identifying all the pieces.
If you focus on these key items I have outlined you be on your way to successful rehabbing. This business can be extremely rewarding in so many different ways, however, it begins and ends with finding a deal, having a plan, hiring the right people and effectively implementing your plan.