Is There An Average Cost Of Repairs
I was wondering if there is an average cost that everyone tries to stay under for repairs. example if the repairs are under 10000 it is a given as long as it is worth more or do you just have to do it and get experience.
The two factors that will dictate how much money you average spending on rehabs are
#1 Your market
#2 How much profit you like to make (but this is directly controlled by your market)
If you live in a market where there are a ton of homes on the market that only need paint and carpet and you can routinely buy them at a low enough price where all you do is put $4000 into them and then resell and make $5000 net or whatever you set for yourself, then that is what you could do.
But the reality in most marketplaces is that those houses don't sell cheap enough to make the numbers work, so you may have to move to the next tier or homes, which could be paint, carpet, new kitchens, if those are still being snapped up by too many investors you may have to move to the next tier or the next.
Remember, everybody is looking for the easy rehab, to make more money you have to buy what others can't or won't buy. That is where the big bucks are usually. Big risks (balls) equal big returns.
The gurus sell their tapes by talking up the exception deals they do, not the average deals they do. Robyn whats her name talks up the $700k house she sold that only need the kitchen finished because she knows the audience she is speaking to will think that is attainable, or "I could do that", but she doesn't talk about where the bread and butter is, which is she specializes in the dumps of all dumps, houses where the pipes have burst during the winter and totally destroyed the entire interior, where she has to replace drywall and flooring down to the joists. She buys what others are scared to buy. She doesn't spend two hours talking about that because she knows that she will scare off too many people from buying her tapes because they will be overwhelmed and not be able to see themselves doing what she really does.
[addsig]
I agree with the first part of what you said; excellent advice. I have to take issue about Robyn's teaching though.
I have been to her seminar and purchased her materials. 90% plus of what she covers are the bread-and-butter properties she buys. Yes, she specializes in the really, really ugly ones (fire or extensive water damage). Her tales about the really expensive houses are just sidetracks to the main teaching.
It's like any book or course: you grab what's of value to you (not all of it will be), and discard the rest. I personally found tons of value in Robyn's teaching.
The only ones who stop themselves from visualizing themselves doing what she does are the listeners/attendees themselves. The biggest battles we face in this or any business are the ones with ourselves.
That's right andrew, what she covers in her seminars is what she deals with, she wouldn't have anything else to talk about right?
But in her come on's to cattle calls she like all the gurus talks about the exceptions and not the day to day realities. There isn't a guru out there that doesn't do their homework in finding out what to say and what not to say in order to produce better sale results of their tape packages.
Robyn who? Don't know who that is?
I have seen Robyn in person and to be quite honest with you I think deserves credit for what she has done. However she paints all contractors as crooks and knows what to say to SELL her books and tapes. There must be more money in the Books and Tapes that in rehabs.
As a general contractor with 25 years behind me, I know for a fact that a large group of the people who follow her methodology are going to end up getting an education in the rehab business.
As a contractor I realize I am not an Accountant, Doctor or even an Attorney. Sometimes we must hire a professional to get the results that will produce the outcome that is necessary to accomplish our goals. If you have a good contract with a good contractor and know where you are going, your out come is a given. Spend your time finding deals and let the others do what they do.
Just my opinion.....
I am sorry 44
I got off the subject.
Just a little bit but thats okay always like to here peoples opinion on all kinds of subject.
Quote:
On 2003-10-29 23:50, dlynn wrote:
As a general contractor with 25 years behind me, I know for a fact that a large group of the people who follow her methodology are going to end up getting an education in the rehab business.
Care to elaborate? I'm asking because I'm new in the business, and an admirer of Robyn (if you hadn't guessed that already). I want to know what you would do differently than how she does it.
I may be overstating the obvious, but you need to have an endgame in mind before you plan out your rehab.
As mentioned before, the market value of the house will dictate approximately how much you will make when repairs are done. If there is an acceptable amount of profit between the cost of the hosue and the money spent on repairs then go for it.
If not, maybe you need to look at another house, find a person who can do the repairs cheaper, or live with thought of making less profit.
There's no right or wrong, just right or wrong for you.