I know a lot of you think rehabs are a great source and IMO they are. But, be careful you don't bite off more than you can chew, and make sure you doublecheck your numbers, then doublecheck them about 6 more times.
I've been doing this for almost 30 years so I'm not a virgin. I still like doing it but I don't need the money, or the hassles. I bought a little pier and beam frame house back in April that was a real wreck! I knew it would be a moneymaker since I was buying it for $24K and I looked at it six ways from Sunday before making an offer.
Some things I knew it needed.
Roof and some of the roof decking
Some interior doors and replace a crappy sliding door.
Siding, part was Masonite, part was T-111, lots was termite and water damaged
Some structural. I knew that at least 8 feet of studs were termite eaten away.
A fair amount of plumbing
Pretty much all new baths, and kitchn.
Anyway every time I looked at it I added another $500-$750 to my last estimate, I'm not quite done with the living room-dining room ceiling, still have to texture and paint the walls in those rooms as well. Haven't done a thing to the kitchen.
I had figured my total MATERIALS at $9K, I'm at $8K now and still need some tile and kitchen cabinets, countertops etc. Luckily it's a small kitchen!
I knew some roof decking was bad, turned out about 40% was!
I figured about $300 for electrican, it was $600, but he did some extras though.
Replacing the AC was about $700 more, all the flex duct was bad and the registers were pretty rusty.
Ended up with more termite eaten studs than I had anticipated.
On the plus side some friends GAVE ME 5 gallons of high dollar exterior paint that was extra when their place was repaintd. They also GAVE ME 7 really expensive interior doorknobs (4 privacy, 3 passage) that they didn't like once they got them. These things are more expensive than any doorknob I've ever bought and they wouldn't accept a nickel for them. Another plus is yard sale light fixtures and kitchen sink!
I've already had an offer of $75K from a couple that saw it when it was a WRECK. Even if I go nuts on the kichen and second bath I won't have a total of $40K in it (I had hoped for $35K max), so I know I'm going to
make out fine on it. But this should be a warning to those of you who take on the real thin deals.
Great one. Where on the planet do you find a property for 24k, though? Was it on the MLS, or did you buy direct from door knocking or cold-calling? Thanks!
Well Brent I'll have to admit that this was the cheapest house I've bought since the oil price induced crash of the mid '80s. I've put more time into this pig than I had anticipated and now have a total of $40K in it. Although I put my first ad in the paper on Friday.
The bad part of buying this, beside cutting way into my golfing time is that because I had to pass on a house a block away that was in pretty good shape that I could've had in the mid 40s, and one across the street from me that I could've had for about $130K. I had the cash to have done them, but I'm conservative enough that I don't like to have that many irons in the fire at one time any more.
The house is in central TX, we're about an hour west of Austin and an hour and 20 minutes north of San Antone. Although mid $20s is pretty cheap even for our market. It was on the MLS for $29K but when the HUD auction came up I went for it.
You got it at the HUD auction, despite it being listed for $29k on MLS? Are properties often listed on the MLS if they are heading to auction? Even if you got it for the $29k, it was a steal, assuming the offer of $75k, huh?!
Do you find that you can locate better deals in more rural areas?
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