Starting a renovation company?? Yes or NO ??

Question

I really want to get into renovating and selling properties under my own company. My question is how should I approach it? I would love to find buyers interested in distressed homes for remodel but I'm pretty sure that's easier said than done when your just in the begging stages. How would some of you go about starting this kind of business? Or should I start out buying my own properties and selling them to build a portfolio then move forward with my original plan?

Jake Oreskovich · Answer

Hey Rashauna,

You're getting into a niche market that can be very lucrative. I don't know much about much but I do have experience in what you're trying to do. You probably want to stay away from first time home buyers because most of the first time home buyers are on very limited budgets and they often purchase FHA homes. The FHA is a bunch of sticklers as far as allowing people to purchase homes that need to be rehabbed. They can do it with an FHA203k loan but that's a whole other bag of worms that probably doesn't concern you at this point.

I would be glad to share with you what has and has not worked for me in this business. I actually started as a landlord with no money so I had to renovate my own rentals. What is your main specialty as far as rehabbing houses? Are you a general contractor or do you have a license? There is a very specific market you will want to get in touch with. When you say rehabbing, to what extent are you talking? Currently, I am rewiring an entire house from scratch and I'm not an electrician! This would be a little different than say, someone who is putting in some new carpets. If you would please let me know a little more about your background in rehabs and remodeling, if any, I think I can at least point you in the right direction to speed up the process for you!

Rashauna Hunter · Answer

That is actually a really great idea I didn't think about that. Marketing myself to the agents verses client outreach.  I have a few reference from some local realtors on contractors that do great work. The biggest obstacle now is building a portfolio.

Thank you for your advice and input !!!

@JJ Conway

JJ Conway · Answer

oh I see. My thoughts (tho I have no experience in this): maybe get to know several realtors who work with first time homebuyers and present yourself as the person who can help them help their clients.  Would probably help if you have a portfolio showing renovations already.  How does something like a presentation showing old house and what you can turn it into sound?

Do you have construction/contracting background (or reliable access to someone who does)?

Rashauna Hunter · Answer

I want to do both, I guess I should clarify. I currently work in healthcare and I have met tons of people  ( mostly young couples) that would rather buy a home that is already built and then they can either rehab it themselves or hire someone to do it since its half the time of building a new home.  I have a friend that is a real estate agent so my goal is to find the "fixer upper homes" with the client and then rehab it for them. So I guess it's mixing both selling and rehabbing in one.

@Timothy Riley

@JJ Conway

JJ Conway · Answer

Hi @Rashauna Hunter it depends on what you ultimately want to do. Are you ultimately wanting to flip?  As in buy the house, fix it, then sell it? or are you wanting to be the company that does the renovation?

Under the education tab is a link to "guides" which is more like a series of articles to help you get started in each of the categories. The only other thing I would say is see if you can find a local real estate investment group or association to connect with like-minded investors.

Wish you the best!

Timothy Riley · Answer

It sounds as though you want to start out whole selling if you want to find buyers for distressed homes (not my niche), you will need to work deals with homeowners then find buyers.

It depends on where your passion is.

If you want to flip (buy distressed - rehab - sell) houses, it depends on what you're bringing to the table. Can you finance and rehab alone or will you need help? When you realize what you are bringing to the table you'll know what you need.

I see you are going for your license (congrats), I think it's great to be doing something while learning, If you can begin building a portfolio I would suggest doing so. It might lead you to a whole new direction of investing.

Good luck.