How To Guide: Full Gut Rehab For Maximum Profit! Seems to be a popular topic. So I will give you my take on this!
To recap on our current progress I thought it would be really helpful to write a piece on the steps that brought us to this spot in our rehab. This will be a 2 part post.
How To Guide: Full Gut Rehab For Maximum Profit? These are the steps we have taken to take us where we currently are.
Duh right? You will be surprised what effects the desire of doing a flip can have on your common sense. Wanting a deal so bad an often convince yourself that a deal is a good deal. Forcing the numbers, convincing yourself the market will change for the better bla bla bla.
There are many ways to find yourself a good deal!
Any time you’re on the road keep your eyes open for distressed properties. Look for “for rent” signs, tall grass, boarded up windows, deferred maintenance, any signs that shows owner is either not living there, or the house is neglected. Find them and offer to buy the house.
Find a “good” list of people with a high probability they are interested in selling their house. For instance older people that are living in huge houses. Often they want to downsize. Foreclosure list, etc. etc. There are a ton of lists. The trick here is to be creative and find a list no one is targeting to eliminate competition.
When you have your golden list all set up, you need to figure out what the best mailing piece is. Yellow letters ( don’t do it!!!!!!!), Pro letter, Postcards… I can write a book on how to do each of those).
Send the mailers out, and wait for the phones to ring. Hopefully you can bag a great deal if of course you know how to talk, how to build rapport with the seller, and how much you can offer.
Here is where we excel. When I say online presence, I mean how strongly you rank and how often you appear and are mentioned online. Be it facebook, blogs, youtube, instagram tumblr etc. etc. The more you are mentioned the better google will trust you and the higher you MAY rank. Of course it is not that simple… but I am sure you can figure it out!
We are the masters of SEO (self proclaimed of course). I have been going on and on and on how awesome our site is in a ton of posts on my other SEO related blog for real estate investors. In fact the house we are taking as an example to write this “how to Flip a house for maximum profits step by step” we found via our fabulous “we buy houses in connecticut in any condition” website! (yes I totally am putting a backlink here to my website, duh)
Yawn, I don’t yet care much about this so I will not comment right now.
You can find great deals if you know where to look. Foreclosure buys is an obvious one!
For more ways to find good real estate deals check out these resources:
I have written several articles on this in this blog post. Here are some:
Read it, study it, sleep with it.. use protection! Then fight out the budget and timelines with her/him. Make sure he/she will be budgeting and using the materials you expect for the flip. Often contractors will quote you for the cheapest of the cheap! Ojo!
After planning it all, make sure your contractor is completely aware what your plans and intention are for the house so that immediate decisions during the job can have him steer the project in the right direction.
When all this boring admin stuff is done we can proceed to the fun stuff!! Here is where the hammer meets the nail. (Did I say that right?)
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In our case we had to do the roof first. That is most important. Roof needs to be able to keep the inside dry in order to do any work!
The fun stuff. In our flip we were plagued by mold, water and decay as the roof had huge holes. So we first had to replace the roof, so that we could gut the entire house to the studs.
If the house requires window replacement, this is when you do it. Important here is that you take all your measurements correctly. Mistakes will cause insane delays!
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After the house is gutted, you can now see everything (well almost everything). This is the best time to evaluate the condition of the plumbing and electrical as everything is accessible.
Don’t just think electrical cables. Think TV cables, wired internet if you do not want to rely on just wireless, even speaker cables for your most awesome home theatre room… this is the time to put everything in the walls as everything is open.
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Now that electrical, and plumbing have been roughed in, walls removed, moved or redesigned, the sheet rock can go up.
So You WILL do something stupid. There is no way of escaping it. If you don’t, you must be the most boring person in existence. So knowing you’re going to do something retarded, you better do it here and now before you do it when it really will mess things up.
As for me, I chose to remove several walls right after my contractor freshly hung, taped and mudded it with his blood and sweat. His face was priceless. As my contractor is pretty awesome he is not going to charge me extra for this mess-up.
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I hate painting. No no you do not understand… I HATE friggin &#(&#( painting. It is boring, annoying and painful. Let’ not even talk about painting the ceilings! In a previous post I had mentioned that we were severely delayed. In order to make up for this crappy delay due to snow, I had to help paining. Gaaadamn it!
Before painting you have to make sure the walls are in good condition. Mudded right, no blemishes, no irregularities an no plaster drop and marks.
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After painting the goal is to get the kitchen cabinets and bathroom vanities in. Why? this helps a lot in psychological motivation. The moment the kitchen is in the house really starts to look like a house. So in order for us to install the cabinets, we need the flooring done. We used 3 inch premium oak hardwood flooring. We got a good price so we went for it.
Finally, Floors are done. So Cabinets are next!
More will follow in the Part II section. This flip is still in progress.
But we just bought an other house in Waterbury CT. This will be a very interesting one and I admit a bit nerve-racking. It is in a pretty bad neighborhood and we therefore can not afford to spend a lot of money on it.
We will definitely document that one as we are sure many of you would be interested in how to deal with a low income housing flip!