How Long Does It Take
Generally how long does it take to rehab a property?
Ihave heard when you get the hard money loan for the proerty, you refinance after 3 months.
I know this is a vague question. I was looking at some advertisements for properties worth 75k, selling for 37k, needing 12k in repairs.
So I expect a vague answer, lol, but usually how long does it take to rehab a property?
JB
[addsig]
You're right, this question is WAY vague. It doesn't set any parameters of how much work needs to be done, how much money you have for the rehab, nothing like that. But, the simple answer is, it takes as long as it takes. lol Also, it MUCH depends on how you get the work done, contractor, or doing it yourself. And, it depends on what you intend to do with the property, typically a rental doesn't take as long as a retail.
An average length of 2 months. it may take longer if it's a BIG rehab...but to my understanding, 2 months is a good length of time.
I don't do rehabs, but this is what the people who rehab tell me.
Two months is a good figure for just about anything. I have never ran into anything that would take longer for my crew.
However; who says they are worth 75K? and who did the 12K estimate for repairs?
The wholesaler gave the numbers, I am think I will pass on this one, only because I need to learn a little more.
If I do get into rehab properties, I will probbaly use contractors to do the work, and I am then looking to hold them as rentals. Maybe resell when it's too tempting...
2 months is not bad. Adding another question here... How odes the hard money loan work as far as payments? I know some are only in terms of 12 months...That would be one heck of a monthly payment !!! So how do most work? Balloon payment?
JB
[addsig]
HML may require monthly interest payments or it could be a balloon note due all at once...depends on how you structure the note.
If you have decent credit, I would try finding a small local bank to loan. You could get money to buy and repair at much more favorable terms. If your credit is bad, than HML is the way to go.
BTW, the bank loan is NOT a traditional mortgage. It should be a balloon note due in 6 months. That will give you enough time to rehab and sell or refi.
Your first rehab figure about 2 months, expect it to take 3 months at the longest, and in reality if you get done in 4 months count yourself lucky.
When you get good at it, you should be in and out from the time you close to you put it back on the market in less than 30 days.
If I hire contractors to do the work, how much faster would it be?
JB
[addsig]
For electrical,plumbing,and hvac hire licensed contractors. Otherwise hire a handyman to do the painting,vinyl,carpeting,sheetrock repair and light carpentry much cheaper.
Depending on who you end up with -Your first rehab figure about 2 months, expect it to take 3 months at the longest, and in reality if you get done in 4 months count yourself lucky.
Actually the more time you spend before you hire someone the less time you will spend looking over their shoulders.