I've been doing a lot of reading lately on real estate investing and am hoping to get started within the next year. I've taken a look at some houses on the MLS (via Zillow, etc.) and found a couple properties that could potentially be gotten for cheap, but would need a substantial rehab. The rehab work doesn't scare me if the numbers work out. I've read most of Brandon Turner's book about real estate investing, but I'm having a hard time translating the description of a good rehab opportunity into a visual. Does anyone have any examples and pictures of houses they've needed to substantially rehab that they'd be willing to share? By substantial, I'm not talking about foundation issues, etc, but things like gutting rooms, replacing drywall, replacing the flooring, new windows, new appliances, etc. Things that altogether could cost $20,000-$30,000, but where the "forced appreciation" results in a nice home that can be rented out for decent cash flow afterwards.
Thanks in advance!
we have done quite a few ourselves...
Sure here's one I just finished. This was a house that was listed as a 3/2, 1700 sq ft with a "screened in porch". I went to look at it and the screened in porch was basically a near finished addition. Slab, drywall, new windows.
My idea was to finish the room as a really good size fourth bedroom with a walk in closet. And that bumped it to a 4/2, 2,100 sq ft house with a great master.
I got the house for 63k. Put in about 28k and it should appraise out 135k. I had it rented before I even closed on the thing (although I waited to get the hold deposit until after I closed).
Renting for 1350/mo to a younger couple that is taking care of their parents. Parents got the big master bedroom which is away from the house. Its almost like a little efficiency back there for them minus the kitchen.
The kids like it because they don't have to see the parents all the time. Parents the same. The second bathroom is on the end so the parents got that one.
But here is a good example of what I look for (albeit a little lower priced than my typical stuff as bradley is about 15k to 25k less than most of my areas).
But cash flow with 1350/mo rent should be around 500 to 550/mo gross profit with no money out of pocket other than the 4pts for the HML and the closing costs - which were offset a little by the taxes.
Basically, I put down 1k in EM and I came to the closing $2,285.79. So I'm all in at 3,300 and I owned the house. Took 7 weeks for the rehab so two months.
And here are the after pics. Unfortunately the listing agent didn't take any before pics of the rest of the house and I forgot. But you can see the after anyway. :-)