6 Parts to Rehabbing Successfully

Rehabbing is a great way to get started in real estate investing. Doing it properly will help you avoid becoming overwhelmed – and keep your budget intact. Here are six basic parts of the process that are consistent among successful real estate rehabbers:

Part 1: Before Work Begins

•     Rekey or change out all locks (make extra key copies) and place a lock box on the front door. If the property is in a depressed area, board up the windows.

•     Put all utilities in your (or your company’s) name and schedule them to be turned on the day you close.

•     Getting the permits out of the way will free you up and help you avoid potential problems.

•     Some work can begin pre-closing. Foundation repair, if necessary, is critical before doing any other work.

•     If the property needs pest control services, have them come by before you start work.

•     Have a plumber and electrician go through the property to completely shut things off before you begin related work.

•     If the seller allows it, start tearing down cabinets, etc. Get a cleanup crew to pick up the debris. Sanitize the house.

Part 2: Roughing Out

•     Replace plumbing under the house or route additional plumbing if necessary.

•     Remove rotted framing and subfloor. If damage is structural, get the right permits and people to repair it.

•     Replace damaged exterior doors, ensuring that they are to code.

•     On a standard rehab, replace only those windows that need it.

•     Prepare the exterior for painting or replace with siding. Replace and paint exterior trim, including soffits and fascia.

•     Curled, warped or faded roof shingles signals a replacement job. Get a good roofer for extensive repairs. Replacing a few shingles, flashing or vents can be done inexpensively.

Part 3: Mechanical Systems

•     Hire a chimney sweep to inspect and clean the fireplace.

•     Have a specialist inspect and clean out the heating, ventilation and air-conditioning (HVAC) system.

•     Have new plumbing and electrical installed to code. Be sure you have all permits and get the work inspected before moving on.

•     After inspection, install insulation in exterior walls.

•     Repair or replace driveway, patio and walkways.

•     If the septic system needs repair, be sure it’s reported in the purchase contract and negotiate who is responsible for the cost.

Part 4: Unfinished Surfaces

•     Replace or repair drywall in walls and ceilings.

•     Replace the garage door if necessary.

•     Examine and replace gutters and downspouts.

•     Install wood floors, if worthwhile.

•     Replace or reface cabinetry.

•     Repair or replace interior doors.

Part 5: Finished Surfaces

•     Paint the interior and exterior.

•     Replace countertops with your chosen material.

•     Replace flooring with your chosen material.

•     Ensure that all plumbing is installed properly and leaks are eliminated.

•     Install cover plates, jacks, lights, smoke detectors, etc.

•     Install new thermostat and vents.

•     Finish or refinish wood floors last, to minimize damage from traffic.

Part 6: Final Details

•     Little additions, like doorknobs, hardware, house numbers, towel bars, etc. can add to the appeal – and the budget. Take care not to overdo it.

•     Install appliances. It’s often cost-effective to work through one supplier.

•     Install carpet, if any. Neutral colors are best.

•     Have landscaping done after the major work is complete to prevent damage to the lawn.

•     Perform final cleaning.

•     If desired, a local designer is inexpensive and can help stage the property for extra appeal.

•     Do a final walkthrough to ensure nothing is overlooked.

Many people get their start in real estate investing by buying a house wholesale or in foreclosure and rehabbing it. Following these key parts will help keep your enthusiasm up (and your budget down).

To learn how you can start your real estate investing business, click here.

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