Why You Should Consider Prehabbing Instead of Rehabbing
Over the past few years, Tarek and I have flipped many many houses and while it’s been very rewarding, it’s also been a lot of work. Even though flipping houses is not easy, we push through the hard work because we love to see an ugly house transform into something beautiful. I feel like house flipping is one of those things that you really have to be passionate about in order to stick with it in the long-run. If it’s not something you enjoy doing, then the countless hours put into flipping a house are going to be extremely painful and you’re going to want to give up before the job’s done.
So how do you know if house flipping is worth pursuing seriously? Many people might tell you that you just have to dive right in in order to find out if it’s something that you like to do. But why would you want to put all that time and money into something that you end up hating?
Something that I’d recommend for new flippers to try is called prehabbing. Prehabbing is somewhere in-between rehabbing and wholesaling, and unlike a full rehab can be completed in a weekend. Through prehabbing you can renovate an entire property without ever picking up a hammer.
Here are a couple of reasons why you should consider taking the prehabbing route, especially as a new flipper.
Will the House Be Easy to Clean Up?
A property with a bad landscaping job, a lawn covered in trash, and kitchen appliances that need to be replaced, may not sound very appealing, but could actually make for a great prehabbing deal. If you find a property in this condition it likely won’t take too long to cleanup, and won’t be too expensive to fix up either. This property is a prime candidate for a prehabbing job.
Does the House Have Good Bones?
The structural integrity of a home always needs to be taken into consideration, especially if you want to prehab the property. Before purchasing a property, have the electrical, plumbing, foundation, etc. all inspected, if there is anything that doesn’t check out, then don’t even bother with this property. A property may look good on the outside, but if the property has bad bones it will take too much time and money to fix up. Your project will end up turning into a complicated rehab instead of a simple prehab like you had planned.
Will the House Need Expensive Repairs?
If a house needs repairs it will stop many buyers from purchasing the property, but often the repairs that need to be made are very simple. Even if this property is not a good fit for other buyers, it could be a great opportunity for you as a flipper. If you find that the house doesn’t need any major repairs, maybe only a window needs to be fixed or a light fixture needs to be replaced, it can be a great house to consider prehabbing.
Is the House In a Sought-After Location?
I’m sure you’ve heard it many times, but location is key when it comes to real estate. It’s true. Buyers will not buy a home in a bad location, no matter how beautiful the property is. If you find a house that is in a terrible location, I would recommend not bothering with it and move onto another property. Even if a house is an easy one to prehab, it still won’t change the fact that it’s located in a bad spot.
For new flippers, prehabbing is a great way to start out. Prehabbing is low risk, requires little work and allows for a quick return on your investment. If you are interested in house flipping, I would consider trying out prehabbing to see if flipping houses is something that you would enjoy doing for the long-run.
For more information about real estate investing, visit Real Estate Elevated's BiggerPockets blog.