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Taking Personal Responsibility is the Best Way to Ensure a Successful Rehab
| | Friday, November 02, 2007 @ 12:28 PM EDT
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Contributed by: vpg
vpg Properties
Read more archived articles about Rehabbing
There are a lot of factors that are involved in a successful rehab real estate investing transaction. You need a property, a reputable appraiser and contractor and a funding source to purchase the property. Depending on what you plan to do with the property, you may also need a good mortgage broker to refinance you, a motivated REALTORŪ to sell the property or a good property management company to locate and interview tenants and manage the property for you. This doesnt include other possible service providers, such as a surveyor, landscaper or handyman..
A good real estate investor will make sure that they have all of these components line up. However, you cant forget the most important part
of the equation YOU!
Isnt this a No-Brainer?
You would think that it would be. Purchasing an investment property is serious business. However, many real estate investors actually abdicate responsibility to everyone else who is involved in the process. They assume that, because they are surrounded by professionals, that they do not have to concern themselves with the details. Nothing could be further from the truth.
As creators of the Ultimate TurnKey real estate investing System, we know first hand the value of setting up a system. This is why we did it. If you have ever spoken with us in person, you will know that we created the system to make real estate investing an easier process for other real estate investors. We didnt see any point in other real estate investors having to re-invent the wheel, and start from scratch. So, we put together a team to help ensure our clients success. Again, if you have spoken with us, you know the story.
The System was created as a support for real estate investors, not as a replacement for their active involvement in their own transactions. We have talked to other wholesalers who have experienced the same phenomena. The funny thing is, they do not even offer the support system that we do, but they have run into several clients who want to push responsibility back onto them.
Whose Responsibility is it Anyway?
Simply put, it is your responsibility. Probably 99% of investment properties are sold AS-IS and earnest money deposits are non-refundable. This means that, if something is wrong with the house, or needs fixing, it is the responsibility of you, the buyer, not the seller. This differs greatly from transactions where you are buying a house to live in yourself. Those types of homes are typically not fixer-uppers. If they are, they are probably sold as is, and you are going to get the house for a lot less than you would if it did not need fix up.
Of course, the fact that the property needs repairs is what makes it a good candidate in the first place. Remember, your best investment properties are ones that need repairs. So, you should go into the project with the mindset that you will be painting, replacing carpet, fixing drywall, and possibly even adding on bathrooms or replacing kitchens. The key here is to know all of this when you go into the purchase. This is your responsibility.
So, how can you do this? You might be a new investor who has no idea what repairs would even be involved. Or, maybe you dont have time to get that involved. We would suggest that you take the time to find out, and you educate yourself where needed. This is not because anyone is going to try to take advantage of you, but because you need to have your knowledge base intact before going into your endeavor. If you still feel like you dont know enough, or you are still too busy, you are probably correct.
However, if you are ready to get started, make sure that you have a quote on hand from a licensed contractor and see what repairs they are going to do. Make sure that you walk through the house or see interior photos. This way, you will know if there is something else that you think should be done or that you just want to do. This way, you can have the bid adjusted before you begin the process. If you wait, any increase in repair funds will have to come from your pocket, because they will not have been escrowed in the beginning.
Note: Charles and Kim Petty are a husband and wife real estate investing team in Metro Atlanta. Real Estate Investing Expert Charles Petty and his wife have been involved in over 700 real estate transactions in the last 9 years and are the creators of the Ultimate Turn Key Real Estate Investing Systems.
Click
here to order their TurnKey System!
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