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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.
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..
