Win cool prizes!
Testimonial contest
Foreclosure.com is giving away $500, $200, $100 shopping sprees and much more!
Rehab Tips from a Foreclosure.com subscriber
In 1990, Ron Gendreau moved from the Boston area to the sunny shores of Deerfield Beach, Florida, in search of a better life for his growing family.
He was already an established Realtor® from the "Bay State" and was looking to take his career to a much higher level in a promising market that was about to explode. It was a bold move, but one
that Ron felt deep down would be in the best long-term interests of the young Gendreau clan.
Boy ... was he right.
"Risks are a big part of being successful — something I learned early in my real estate career," said Ron. "The difference between success and failure, however, often depends on whether or not
the risk is thought-out and calculated. I did my homework and was confident I could thrive in the South Florida housing market."
Ron pounded the pavement and scanned the newspapers for employment opportunities and real estate deals from the moment he crossed over the Georgia state line and arrived in the "Sunshine State."
Eventually, he saw an ad in the paper about marketing and selling real estate investment properties such as foreclosures.
Now, the better part of his experience had been with traditional real estate sales. However, the idea of distressed properties was not only new to him, but also intriguing.
"Most buyers are always looking to spend the least amount of money," said Ron. "It's human nature to try and spend less and get more, especially when it comes to homes. There's a widespread
perception among the general public that foreclosures offer more value. And more often than not, this is the case."
Ron began working for Investments Plus, which was a successful real estate firm headed by the future founder, president and CEO of Foreclosure.com, Brad Geisen. At about that time,
Brad began to use his accurate and popular foreclosure lists to rehab properties then resell them for a profit.
Working hand-in-hand with Brad, the one-time Realtor® from Massachusetts was quickly learning the ins-and-outs of rehabbing foreclosures. Before long, Ron was out on his own criss-crossing
the state, purchasing, renovating and selling distressed real estate to the tune of up to three properties per month.
It was trial by fire.
"Hands on experience is really the best way to learn this business," said Ron. "I tell people all the time, you just have to get off your couch and get your hands dirty. It's a rewarding experience
that is well worth the risk."
Today, Ron is still rehabbing properties; however, he has slowed his breakneck pace to about one per month. Over the years he has learned a lot about the industry and has a few pointers for Foreclosure.com visitors.
According to Ron, a successful rehabber should keep the following in mind:
- Caution: Know your limitations and do not bite off more than you can chew. If you have a full-time job, rehabbing more than one property on the side at a time is insane. Don't jump overboard
without a life preserver, either. Ease your way in with a few projects that require relatively simple repairs.
- Location: It might sound cliché, but finding the ugliest house on the prettiest block is the cardinal rule among rehabbers. These homes are easier to sell and often don't need as much work
than properties in rundown parts of town.
- Condition: Find homes that are in solid shape and do not need more than $10,000 to $30,000 in repairs. Steer clear of homes with major structural and/or physical damage such as electric or
plumbing when first starting out.
- Character: Sometimes homes might be in bad shape, but have a little something extra that sets them apart from others in the area. It could be an extra land lot or physical attribute such as
a wraparound porch. The point: Look for subtle differences that you can take advantage of to impress buyers.
- Labor: Absent a reliable contractor, contact county labor pools and temp agencies to find workers willing to do the heavy lifting. Try your best, however, to find qualified and reliable
tradesmen in skill areas such as electric, plumbing, etc. Assembling a good team is one of the more important ingredients to successful rehabbing.
- Focus: Bathrooms, kitchens and flooring sell homes — don't let anyone tell you otherwise. Research demographics in the area and try to create environments that appeal to the local buying
market. Remember, this is not your home and you are not going to live in it. And just because you should concentrate on these three areas of the home, doesn't mean you should neglect other needy areas.
Find a balance and make it work.
- Marketing: When the time comes to sell your investment property, don't settle for just listing it with a Realtor in MLS. The goal is to sell as fast as possible, therefore, promote your rehab
with open houses and in other ways to attract more potential buyers.
- Qualify: Too often, rehabbers find great buyers who don't qualify for loans, wasting valuable time and resources. The solution? Ensure that interested buyers are prequalified prior to sitting
down at the negotiating table.
- Flexibility: Just because you purchase and rehab a home doesn't mean you need to sell it. In fact, renting is a very viable option, especially in markets that will correct in a year or two.
Sometimes to get full value — and more — on your investment it is smart to rent it out and wait until the time is right to sell.
- Foresight: Once you begin to get comfortable rehabbing properties and doing them more often, it will be important to keep the momentum rolling. Therefore, while you're working on one project,
you should be out prospecting for others that can be ready to go once you close the house at hand.
As you can see, there is a lot that goes into rehabbing a property, from research to closing. Don't let it deter you, however, from getting your feet wet.
Remember, it's better to try and fail then never to try at all.
But by following these basic guidelines, knowing your limitations, learning from your mistakes and experiences, and taking smart risks, failure should not be an option.
Good luck!
 top
|
