What Will You ABSOLUTELY Not Touch On A Rehab?

What things are "Taboo" on rehabs? Foundation problems, flood plain etc...?

Comments(21)

  • jeff120028th October, 2004

    If the total rehab costs exceed 1/3 of the total After Repaired Value of the property, I would take a long hard look at it. Generally that would be pretty extensive, and there is likely to be alot of things that will show up and cost more along the way. Also, your turn around time will likely be increased, so your holding costs will likely go up.

    Just my opinion though.
    Jeff[ Edited by jeff12002 on Date 10/08/2004 ]

  • nickb8th October, 2004

    Quote:
    On 2004-10-08 14:53, jeff12002 wrote:
    If the total rehab costs exceed 1/3 of the total After Repaired Value of the property, I would take a long hard look at it. Generally that would be pretty extensive, and there is likely to be alot of things that will show up and cost more along the way. Also, your turn around time will likely be increased, so your holding costs will likely go up.

    Just my opinion though.
    Jeff

    <font size=-1>[ Edited by jeff12002 on Date 10/08/2004 ]</font>


    Jeff,

    Great rule of thumb. However, I want to know what kind of things will ABSOLUTELY turn you away from even considering a property?

  • bgrossnickle8th October, 2004

    It is all in the cost of the repair, not the type of repair. If there is a good enough profit margin I will do burn houses, foundation problems, termite, sink holes, whatever. I do not like them, but if I can make a 60k profit on a rehab I would do just about any repair. The more serious the problems, the more serious the profit.

    Brenda

  • InActive_Account8th October, 2004

    It is all about the $$$$.

    Any problem can be fixed. All it takes is money!

  • meddac9th October, 2004

    Like someone said...anything is fixable at a cost. I do all my own work except the HVAC stuff ..that said I won't touch exterior repairs because I don't like working outside in hot weather or rain or whatever. I' run away from cracked walls, rotted exteriors, masonite etc but I could care less what it looks like inside as long as it's struturally good...that's just me.. I think it all depends on what you can do or contract out.

  • meddac9th October, 2004

    Like someone said...anything is fixable at a cost. I do all my own work except the HVAC stuff ..that said I won't touch exterior repairs because I don't like working outside in hot weather or rain or whatever. I' run away from cracked walls, rotted exteriors, masonite etc but I could care less what it looks like inside as long as it's struturally good...that's just me.. I think it all depends on what you can do or contract out.

  • bogie71299th October, 2004

    Unless you own a foundation repair company or have personal knowledge and/or skills of that, I'd stay away from that specific problem.

    It's all about the $$$$!

    Bob

  • Stockpro9910th October, 2004

    I would not touch anything beyond your experience range or that of the contractors you are working with. The quickest way to ruin is for you to get in over your head on a project that you are unable to determine the scope of. If you can get a good contractor to give you a bid of what the repairs will be then it becomes as LACASHMAN said, "a matter of money" and if the $$ is there then al;l things are repairable..
    [addsig]

  • InActive_Account10th October, 2004

    Quote:
    On 2004-10-09 22:30, bogie7129 wrote:
    Unless you own a foundation repair company or have personal knowledge and/or skills of that, I'd stay away from that specific problem.


    Properties with foundation problems can be big maney makers or money losers. I have seen them go both ways.

    First probelem it is very hard to find a lender for these even some Hard Money lenders don't like them.

    Second problem is you have to have someone who really knows what they are doing give you an estimate. This is not a job that you give to the low cost bidder.

  • InActive_Account11th October, 2004

    Only needs paint & carpet = every newbie who can read a get rich quick book trying to buy it = not just low profit, but a loss.

    Needs furnace, roof, rotten flooring, broken windows, dead cat in the oven, basement has been full of water since 1983 = newbies run away fast, still seeking one that needs paint & carpet so they can lose money = experienced rehaber buys and makes big $.

  • JohnMichael11th October, 2004

    The-Rehabinator

    Shoot son, I have made a lot of $$$ with just carpet and paint!

    And

    I haven't even broken a nail yet.

    LOL
    [addsig]

  • meddac11th October, 2004

    I'm with ya Rehabinator!
    Yep....been there done that...the dead cats (plural as in stuck to the carpet) rotten floor in one bath, NO heat pump/furnace or water heater (they stole those) etc... It had the GLORIOUS smell of cheap and as everyone was running away I was hurrying up to snag it! That one I'm still working on a year later but had three other houses get it the way..Not to mention still working a 10 hour a day job. .One of these years it will be done and if not it's only costing me the taxes on it.

  • kenmax11th October, 2004

    if the home has structual damage i will not attempt a rehabb. for me its time vs. money........km

  • nickb11th October, 2004

    So I'm hearing a variety of answers, mainly depending on comfort/experience levels. For me, I'm not afraid to get in to anything unless there is severe structure/foundation problems, or something incurable such as flood plain/really bad drainage problems. I am off base here?

  • rferdinand11th October, 2004

    Nickb,

    I own a construction company and run into crack foundations all the time. I would say there isn’t any one thing you should run from when evaluating a property investment. I think the one question you should ask your self is>

    When I am done with this property will all the stress and aggravation I went through worth the profit I will make.

    If you answer is NO don't buy the property move on to the next one. If on the other hand if your answer is YES go with it.

    Here’s a tip for you. There are companies that specialize in flipping homes with crack foundation. You mit want to contact on in your city and work a deal with. I know of a company in Southern California that only works on homes with cracked foundations. They buy high-end homes below market value, fix the foundations and then sell the home for 1.5 million or more. They also write 25 offers a month and will only purchase one of the home they offer on.

  • InActive_Account12th October, 2004

    Johnmichael - I envy you. If you can do it by all means do it.

    Out here I have a couple of big time national real estate gurus based in my town, so they are producing newbies like rabbits.

  • kenmax14th October, 2004

    do what your exp. allows you to do. ........km

  • mikejaquish14th October, 2004

    Don't really want a property where the cops dug multiple bodies out of the crawlspace dirt.
    Creep me out...
    :-D
    [addsig]

  • InActive_Account14th October, 2004

    Rehabinator,The good part is only about 1% of their bunnies will ever produce any results!!!

  • desertrat14th October, 2004

    just curious, what is your general rule of thumb when making an offer on these properties, is there a certain profit margin you expect to make on each property or do you milk it for everything it is worth ?

  • kenmax15th October, 2004

    i bring all my homes up to 100% complete, i then price at what the market will bare......km

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