When looking for the highest potential return on a real estate investment, it’s often risky but more profitable to choose properties that need more work. Some properties simply need some fresh paint, new appliances, and new carpet. But others need much, much more. They require so much more work that they’re classified as ‘rehabs’ rather than ‘fix-n-flips.’
For a real estate investor, time is money. Especially when you have investment loans that are eating away at your final return for every day the property sits unsold. Therefore, it’s beneficial to know how long rehab will take. This approach can help you better estimate the necessary time for the project and help you choose projects that will be completed more quickly, allowing you to reap better rewards.
Fastest Residential Property Rehabs
The fastest residential property rehabs are done in as little as six weeks. That means a property goes from uninhabitable to ready to sell in only a month and a half.
How can this be accomplished so quickly?
Network of Professionals
Seasoned real estate investors have a network of contractors and specialists they use for their projects. This network has been built over time, and those that delivered slow, poor work were cut from the list.
In addition to having a network of professionals in your contact list, make sure that they are available when you plan on doing your property’s rehab. If they don’t have availability for the next six months, is there someone else you trust to do the work? If not, ask if they can recommend someone.
Have Patience
Too many novice real estate investors get eager and don’t wait for a solid opportunity. Instead, they jump into the first project that seems doable under the perfect conditions. However, the conditions never end up being perfect, and they are often left scrambling.
Waiting for the right opportunity can be frustrating at times, but it is well worth it. Knowing that you can handle a property’s rehab and that you’ll be able to sell the property upon completion will keep you from making costly mistakes and getting in over your head.
Be Familiar with the Work
What do you know about the work that needs to be done on a property? You don’t have to be the one to make the repairs, but you should have an idea of the time required, cost, and labor required to complete a particular task.
For instance, does a roof replacement take a few hours or a few days? How will you know if the contractor completed the job well? If you’re familiar with what needs to be completed, you can plan the rehab process and perform quality assurance checks along the way.
Have Enough Money
One primary reason rehab projects go awry is that the real estate investor doesn’t begin with the proper financing for the project. You might think a shoestring budget will force the investor to be thrifty and scrappy. Unfortunately, not having adequate funding can cause the investor to make poor, hasty decisions, cut corners, or hire less-than-stellar contractors.
Conclusion
To ensure that your investment will yield a solid return, it’s essential to do your due diligence, know your market, and your financing options, and plan a reasonable timeline.
Are you ready to start your next rehab project? Need funding that will see you all the way through to the end?
Contact us at Park Place Finance to get started with your rehab loan.