Making money is about solving problems! The top 5 most profitable problems are easy to spot and can make you thousands! When i buy a rehab project to flip I look for very specific issues. Most of the time they are the very issues that keep other investors from even bidding on the projects I make the most money on.
#5 Mold – that’s right, I said mold! Only 2% of mold is toxic and most most can be remediated by removing the damaged sheet rock, eliminating the source of moisture, treating any affected wood and replacing the damaged items with new rock, tape and paint. It’s simple and can make you thousands.
#4 Ugly wood siding and a deteriorated chimney. Siding is relatively inexpensive for the transformation it brings. Ugly houses can be made beautiful for a few thousands dollars which can put you in a position to profit!
#3 Dated walls and flooring. Paint and carpet is the highest return on investment you can make in any renovation project you will ever do. Don’t underestimate the power of this simple technique. If your margins are a bit thin you can do a quick paint and carpet job for about five thousand dollars and turn it around for over twenty thousand. Don’t go crazy on a rehab that you pay too much for!
#2 Conversion opportunities. Can you change a two family back to a single family or two family to a three family or a single family to one with an in-law apartment? One word of caution here; know your market! If you are converting a two to a single make sure it’s not more valuable as a two first! I’ve seen investors make this mistake going both directions! The key on these is to know and understand the financing available to your retail end user.
#1 Favorite Rehab Defect is Foundation defects! It’s hard to imagine a scenario that scares away novices and some intermediate investors faster than a foundation defect. The good news is that they are relatively easy to repair and the cost is not exorbitant! Most assign a 10k to 20K price tag to these defects and most can be repaired for under $2500!
If you are thinking about a renovation project call me first to help you build your team!
