I thought this was kind of a cool anecdotal story about the importance of doing a good job with your rehabson your rentals. (So often I see people just doing a crummy job on them, justifying it with the excuse that "it's only a rental"). I'm in the process of refinancing some private loans with a small bank. I've got a bit outstanding already with them, so I needed board approval. I received it and afterwards was talking to the loan officer, who is also the son of the president of the bank. (Both he and his father are also real estate investors.) He told me that one of the reasons the bank was agreeing to the loan was because he and his father drove by a couple of my rehabs and were impressed with the work I did. They said my properties had good curb appeal, and it was clear that I run a clean business. They even went in and walked around one while my contractors were there and were impressed with all of the work I was doing. (Of course, my contractors never told me this.) Ironically, this is the lowest end property I own by far, and they were still impressed.
It felt kind of good to be vindicated. I really pride myself on fixing everything right the first time and providing a clean, nicely finished out home that is superior to the competition. (I'm not talking about stupid over-improving or anything.) I think that if I had been cutting corners on the rehab, or just doing the bare minimum like a lot of landlords do, then I might not have gotten the board approval.
I think the lesson I took away is that you should always do a good job on your rehabs regardless of whether it's a rental. You just never know how or when taking the high road is going to pay off. (You'll have to forgive if the last part came off a little cheesy, it's the end of the day and I'm out of eloquence.)
Awesome story @John Chapman ! I've witnessed first hand several local investors that have gotten into properties cheap, done crappy rehabs and cashed out with a refi for a quick profit. The results look great in the short run, but over time the poor quality of work causes much higher turnover and repair expenses which have caused cash-flow problems for these folks.
Knowing that the finished product was done right and will hold up over time is well worth the added investment/effort!
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