{"id":122009,"date":"2020-02-05T05:00:29","date_gmt":"2020-02-05T12:00:29","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=122009"},"modified":"2021-03-16T14:58:33","modified_gmt":"2021-03-16T20:58:33","slug":"stop-letting-fixer-uppers-intimidate","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/stop-letting-fixer-uppers-intimidate","title":{"rendered":"Why You Should Stop Letting Fixer-Uppers Intimidate You"},"content":{"rendered":"<p>On a <a href=\"https:\/\/www.biggerpockets.com\/podcast\" target=\"_blank\" rel=\"noopener noreferrer\">recent episode of the BiggerPockets Podcast<\/a>, Brandon and I interviewed Kevin Paffrath of Meet Kevin\u2014a Realtor, investor, and YouTube personality.<\/p>\n<p>In the video below, Kevin walks us through a property he purchased recently and is in the middle of <a href=\"\/renewsblog\/2014\/01\/07\/flipping-houses\/\" target=\"_blank\" rel=\"noopener noreferrer\">rehabbing<\/a>. He talks about why investors shouldn&#8217;t be scared off by ugly houses. Instead, dig deep and see the gold that lies beneath the peeling paint!<\/p>\n<h2>Why Investors Should Stop Letting Fix &amp; Flips Intimidate Them<\/h2>\n<p>Kevin described the property while leading us through a video tour.<\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/tn6HSYnS3Yc\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<blockquote><p>OK, there&#8217;s no flooring. So the way the agent sold this property is it has to be cash only, because they ripped the carpet off. I mean, the old asbestos tiles are here. You&#8217;ve got this acoustic ceiling; you&#8217;ve got the older fireplace. You know, everything&#8217;s kind of disheveled here.<\/p>\n<p>This is the kitchen. You know, everything about it\u2014most people are going to look at this and go, &#8220;Oh, gross. It&#8217;s old. We&#8217;ve got to demo everything. We&#8217;ve got to tear everything out.&#8221;<\/p>\n<p>You literally have blue bathroom tiling, which matches the blue toilet over here. I mean, just everything about it is nasty.<\/p>\n<p>This is money to me! And the reason is because this place we bought for $465,000. We&#8217;re going to put about $45,000 into it.<\/p>\n<p><em><strong>Related: <\/strong><\/em><a href=\"https:\/\/www.biggerpockets.com\/blog\/biggerpockets-podcast-357-kevin-paffrath\" target=\"_blank\" rel=\"noopener noreferrer\"><em>BiggerPockets Podcast 357: $6M Portfolio Before Age 30 by Finding \u201cProblem\u201d Properties with Kevin Paffrath<\/em><\/a><\/p>\n<p>That&#8217;s scraping the ceilings, flooring, removing the wallpaper, painting it. New light fixtures, outlets, door handles, a couple of new vanities. We&#8217;re going to glaze the tiles in the bathroom and repaint.<\/p>\n<p>We&#8217;ll actually keep the kitchen cabinets. We&#8217;ll repaint these. Initially, people look at this and they go, &#8220;Ew, gross! Look, they&#8217;re terrible.&#8221;<\/p>\n<p>I look at this, and I go, &#8220;This is hardwood. This is nice quality stuff.&#8221;<\/p>\n<p>It&#8217;s ready to go as long as it&#8217;s not water damaged or broken or whatever. I can make this work over here.<\/p>\n<p>For example, we can cut in a range. We can put a little 18-inch cabinet here and cut in a range right here. So, now I&#8217;ve got my oven and my cooktop, and I&#8217;m ready to go.<\/p>\n<p>So, that&#8217;s the kind of stuff I look for. When I see that, I go, &#8220;I could play that game all day long.&#8221;<\/p>\n<p>And I&#8217;ll keep doing that. Maybe it&#8217;s just because a lot of people go in there and they think, &#8220;I&#8217;m going to have to spend $150,000 on it.&#8221;<\/p>\n<p>I look at it, and I go, &#8220;I only need to spend $40K on it. What are you talking about?&#8221;<\/p><\/blockquote>\n<p>What Kevin is essentially describing is buying a problem. And the problem is it&#8217;s ugly. But that problem looks worse than it is.<\/p>\n<p>And he&#8217;s got some experience. So when he looks at it, what he&#8217;s seeing is: OK, this needs a facelift. I just need to put makeup on this thing. That&#8217;s not a very big deal.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/best-way-millennials-invest-real-estate-2020\" target=\"_blank\" rel=\"noopener noreferrer\">The Best Way for Millennials to Start Investing in Real Estate in 2020<\/a><\/em><\/p>\n<p>I loved the fact that Kevin showed us a deal that makes a ton of sense. There&#8217;s a ton of equity in there, but it scared everybody else away because it wasn&#8217;t pretty. Well, you can make it pretty! That&#8217;s the best problem to solve.<\/p>\n<p>Kevin chimed in.<\/p>\n<blockquote><p>My favorite thing to buy\u2014this is my definition of sort of your wedge deal\u2014it&#8217;s very much like this deal. I go in, I look like everybody else. They&#8217;re looking at all the nasty stuff and the smell and the black carpet and stuff like that.<\/p>\n<p>I look at it. I go, and I open the furnace closet. Brand spanking new furnace. I like this!<\/p>\n<p>I look at the roof. That roof is pretty good! We&#8217;re gonna put on new ridge caps for $1,800. That roof is going to kick it for another 10, 15 years.<\/p>\n<p>You look at the foundation. All the expensive things are good. Grounded electrical&#8230; the expensive stuff is good!<\/p>\n<p>The cosmetic stuff is I think what people dramatically overvalue, and that creates an opportunity to even get on-the-market deals for a traumatic discount.<\/p><\/blockquote>\n<p><a href=\"https:\/\/www.biggerpockets.com\/podcast\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-114262\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/1-1.jpg\" alt=\"ad-biggerpockets-real-estate-podcast\" width=\"706\" height=\"125\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/1-1.jpg 706w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/1-1-300x53.jpg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/1-1-702x125.jpg 702w\" sizes=\"auto, (max-width: 706px) 100vw, 706px\" \/><\/a><\/p>\n<p><em>Questions about this deal? Questions about rehabbing ugly properties?\u00a0<\/em><\/p>\n<p><strong>Let&#8217;s talk in the comment section below!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On a recent episode of the BiggerPockets Podcast, Brandon and David interviewed Kevin Paffrath of Meet Kevin\u2014a Realtor, investor, and YouTube personality. Kevin walked them through a property he purchased recently and is in the middle of rehabbing, discussing why investors shouldn&#8217;t be scared off by ugly houses. <\/p>\n","protected":false},"author":5362,"featured_media":121782,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5525],"tags":[],"class_list":["post-122009","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-flipping-houses"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/122009","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/5362"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=122009"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/122009\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/121782"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=122009"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=122009"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=122009"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}