To Be Or Not To Be....Rehabber
What is the most important deciding factor as to which is better in my situation, wholesaler or rehabber? I thought I was interested in wholesaling for a while but I've been reading the rehab forum lately and it is really interesting me; the profit is significantly more! I understand the differences in the two but why be a wholesaler if you can be a rehabber??
In most cases it is easier and quicker to wholesale. It takes time to rehab then try to sell it. Not as long in the wholesaling process ( in most cases). so if you make 50k per house rehabbing but can only do 4 per year compared to 10k each house for 40 houses wholesaling then which would you do. Of course these are exaggerated situations and figures but maybe you get the idea. Its just what youre comfortable with.
Raquel:
Your answer is very simple. Both!
Start rehabbing properties and wholesale your overflow. This way you dont give up the big pay-days that come with retailing houses and you also get a piece of the action by wholesaling.
Best Riches,
Jeff Adam
[addsig]
there are different degrees of rehab. from "dogs" to "light rehabbs' i do "light r/b's" nothing structual. this allows me to move quick on the deals and pick up a good profit. that way i can move from rehab. to wholesale with little problem and do both methods......kenmax
Agreeing with Jeffrey I would add that there are additional skills required as a rehabber. You need to know about the mechanics of rehab whether you do the work yourself or not.. You need tons more cash or $$ reserves, you must be able to effectively fix the cost of the repairs so that you don't end up upside down.
ANy rehabber can wholesale, but not all wholesalers can rehab....
[addsig]
but you can get the rehab money upfront in the loan if the property appraises for more than the selling price, correct?
I'm no expert here, but seems to me on your first rehab you need to have a substantial amount of the money to rehab already. I know at times if the home appraises for more you can discuss options with the seller to have specifics done and then rolled into the loan.
Generally you have to bring $$ to the rehab deal.
If you get hard money at 65% ARV you "might" have enough to get the repairs done. plan on a 6 month hold time.
we have on rare occaision paid out of pocket for the rehab, but generally we roll into a rehab specific loan product or a construction loan which covers your rehab costs. a double close with a partner could also pull the costs out as well as the closing,down and holding costs. get creative with your broker. if he or she is to conventional or says it cant be done then its time to go shopping.
regards-pat