I've Got Questions About Purchasing A Rehab
Got a deal in the works. WIll close in Dec.
Questions:
The repair guy and I spent some time at the property looking at what needed to be done. On Monday, I have a HVAC guy coming to look at the central unit and a plumber to come look at the plumbing. On Tuesday, the gas company is coming out to check the appliances. I checked with codes and there are no violations.
Would you still have a professional inspector come out to check the house?
Also, what minimum profit margin do you look for to consider a deal worth it?
Thanks!
On a rehab: $20K min
On a flip/wholesale: $5K min
Oh BTW:
These are Ron LeGrand's numbers...not mine.
If you knew about all the work it took to do a rehab, you would want $20k minimum.
Good luck....and if you want less, go for it. Something is better than nothing.
Right, after all where else can you make even $10k in a couple months? If you are handy you should do as much of the work as possible to increase your profit. if nothing else do the cleaning and painting. 'sides workin's good fer ya.
josh
[addsig]
Ok...what about getting a professional inspector?
A professional inspection never hurts. The guy I use charges $200/house and has 35+ years experience. I figure if he finds one oversight my contractor and I made in a dozen houses, it is well worth the extra cash.
-Chris
[addsig]
If you are new at this I would hire an inspector. Your buyer will hire one almost for sure and it is great to advertise that has has passed inspection and ready to move in. I would hire the same guy to come back and reinspect after the rehab. I am sure he would do it for less the second time. Most hard money lenders that I have used will loan 70% of the fixed up value. I would let that total be my total investment which would include purchase price and fixup costs. Carry costs and Realtor fees and closing costs to sell would be part of the 30% gross profit. You can be a bit flexible but stick pretty close. Unforseen things always happen and you could still loose money. Hope this helps a bit.
Ted Jr