Construction worker tile roofing repair house

“Inspections – Your Cost To Rehab Determines The Real Profitability Of A Property”

When you buy a property to rehab, you need to feel pretty confident that the problems with a property won’t exceed your budget for the repairs.

There’s no fixed number here. Let’s say that you find a property that is worth $100,000. The Seller is asking $70,000 and it needs $5,000 of repairs.

This means that you will have $75,000 into the property and a $25,000 profit margin after buying and selling expenses.

On the other hand, take the same property valued at $100,000… you are able to buy it for $50,000, but this time it has a $7,000 foundation problem in addition to the $5,000 of cosmetic work.

In this scenario, you will only have $62,000 into the property and $38,000 in profit after buying and selling expenses.

I, personally, love foundation problems.

They scare the heck out of most people, but all you have to do is have a firm bid from a good contractor who can do the work.

It will be very difficult for the Seller to unload a property like this without making a special deal because no one else wants to mess with it or is afraid of it. Don’t ever let conditions like this scare you away from a deal if the numbers work… just make sure of your numbers before you act.

Kindergarden teacher with children.Joe Crump Learns From His Kids

 

I was in my daughter’s grade school class on Friday and I spent some time just watching her and her classmates. Just seeing how much they already know, how well they get along and how thirsty they are for knowledge, made me feel like the future of the world was in good hands.

This is a good life. We all need to learn the great dichotomy… the more we give, the more we receive. Business works the same way. The more opportunities we have to help others, the more we personally will make.

Is It Time For You To Start Giving In Your Business?

 

I’ll teach you..

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5 Comments

  1. Warren
    May 10, 2013 at 2:25 pm · Reply

    I wonder if there are any tips for hiring contractors and inspectors from a distance. Is this best to do just in properties you can actually drive out and see? I’ve heard of people buying up really cheap properties all across the country and flipping them, but don’t know the particulars.

  2. RobP
    May 6, 2013 at 2:37 pm · Reply

    The first house I ever bought with intent to sell it for a profit needed quite extensive cosmetic repairs only. I admit I was scared to take on something that actually needed to be partially rebuilt. Foundation issues would scare me too! Like you said. I think this is easier for people who have been in the business for a while and have created relationships with people they know do quality inspection and contracting work.

  3. Troy
    May 6, 2013 at 11:04 am · Reply

    I also consider looking into roof damages, that can also rack up the price if you do it right.

  4. Wes
    May 6, 2013 at 11:03 am · Reply

    That is the best way in my opinion to get the best deal on getting a low honest bid on a home is to find the most major issues to fix the home. Foundations are definitely one of them.

  5. Henry Stellen
    May 6, 2013 at 11:01 am · Reply

    Yes foundations are a big plus to remodeling and getting the price down on purchasing a home. You can get a high bid from a contractor for about 50% more than what you have to spend on repairing a foundation and then hire a more affordable contractor or handyman to fix it.

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