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Taking the ‘I’ Out Of Rehabbing

If you plan to make rehabbing houses your primary source of income, make sure you remember this one simple reminder: Do not get too personal when fix properties. There is no room for “I” in rehabbing.

By: Daniel Mc Grey
Category: Real Estate
Posted: Nov 02, 2009
Updated: Nov 02, 2009
Views: 101


If you plan to make rehabbing houses your primary source of income, make sure you remember this one simple reminder: Do not get too personal when fix properties. There is no room for “I” in rehabbing. A lot of beginners, and admittedly, even veteran house flippers, tend to forget that they are repairing a property just to raise its value and to make it a livable home for whoever the buyer is. They get carried by the excitement of flipping a home that they lose track of their repair budget. Remember, rehabbing a house means buying it cheap, repairing it cheap, and selling it at a high price.

Home ownership is the basic tenet of the American Dream so it is natural for us to be excited about owning a home, even when we are just repairing it. Such is understandable. But if you really want to make a fortune from rehabbing houses, make sure you keep your emotions and expenses in check.

The danger of treating a house as if you will live there is that you will seek to beautify it. Naturally, if it was your house, you would want to repair and renovate it until you are satisfied with how it looks. And we all know satisfaction does not come cheap.

It starts when a house looks good enough but you “feel” that something’s still missing, say on the wall. What you do is you hang a painting of a farmhouse that looks like the one where you grew up in. You see the flooring is still relatively good but you like the feel of new carpet on your feet so you lay out new carpeting. The additional repairs go on and before you know it, you’ve already spent an extra $5,000 for repairs.

It wouldn’t hurt much if the personal touches you want are actually necessary. Say you like gardening and landscaping. You want to put up a garden because it’s better than an empty yard. Now that’s a good move because adding a garden is a “minor” repair and is cheap but will surely raise the value of the property. The problem arises when you make unnecessary repairs.

Unless you’re flipping houses simply for leisure (and yes, some people, especially handymen do this), your bound for bankruptcy if you keep on putting your “wants” in the process. It should not be “I want this, I want that” but “the buyer will get this and the buyer will get that.”

To learn more about rehabbing and real estate investing in general, go to REIwired.com. The website has a collection of videos, articles, and sound files on various topics about real estate investing.

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