This article is a continuation of our series on increasing your hard money rehab ROI. In the previous installment, we’ve discussed ways to strategically allocate your hard money rehab dollars to the areas that have the most impact on your sales price. Today, we will be tackling additional strategies. As a hard money lender, I’ve seen many of our experienced borrowers make their rehabs look more expensive than they actually are by getting the right materials and playing with modern design trends. Here are three best tricks of the trade to give you the bang for your rehab buck.
The key to a successful rehab is to control your costs. That doesn’t mean, however, that you should use the cheapest materials. The trick is to think wisely and choose when to spend your rehab money and when to go with a budget option. As a hard money lender, I can testify that in our business it’s all about ROI. The goal is to create the most upscale look-and-feel for your property while keeping your costs down. Our most successful clients do so by concentrating their rehab money in strategic areas, using the right materials to get the most bang for the buck and by simply displaying good taste. Let’s unpack each of these recommendations.
As a rehabber, your goal is to rehab and sell a home quickly and with as little hassle and expense as possible. It’s easy to get so caught up in the whirlwind of repairs and necessary maintenance that you forget the aesthetic power punch that professional home staging for rehabbers can bring to your property. I call it the magic of staging because that is exactly what it is—that final magic touch that will help you sell your rehabbed home quickly and for more money.
As a hard money lender, I want you to be aware of a disturbing trend that I’ve seen with many of our own properties. This trend is for buyers to pick your property apart and use the home inspection to renegotiate the price. You need to be aware – and be weary – of buyers who are fishing for a bargain and not emotionally vested in the transaction. They use the home inspection as a tool to renegotiate the price you’ve already agreed on. They demand more and more, and are ready to walk away from the contract if you don’t agree to meet their demands. As a hard money lender, I have several suggestions on how to handle such situations.
We want all our investors to succeed. A success in real estate flipping means realizing a profit that makes your efforts worthwhile to you financially. It’s a highly personal number. Someone might be content in making 20K per transaction, while others might need double that amount to justify the time they spent. This is why we created our hard money calculator: to ensure that our investors – especially those new to the business – are aware of other costs and do take them into consideration when calculating their potential profits.
Welcome to part two of our look at the Multiple Listing Service (MLS). As mentioned in the previous blog, the MLS is great tool for staying up to date on the most current properties available for investment. Metro DC Real Estate is fast moving and you need a way to track good deals and compare them to other deals. The MLS has a host of information for doing just that.