Crush You Next Rehab Deal

There is a thin line between success and disappointment in almost every aspect of life. Anyone even remotely associated with investing in real estate can attest to this. It is not enough to buy a property, put some work in and hope for the best. If you don't make meaningful updates that impact the value you will be left disappointed with the results. Something as seemingly minor as the color of the kitchen cabinets or the type of hard wood flooring used will influence what your property sells for. On some deals where the margins are slim a few thousand dollars move the needle and impact your bottom line. Not all fix and flip rehab deals are the same. Here are five tips to help you crush your next rehab deal.

• Additional Bedroom: It is essential to look at every property with an open mind. The current use may not always be the best. There are times when you will come across and extra room or extra space and question what it has been used for. A family may have turned a room into a temporary office or a short term play area and never changed it back. Whenever you can look for ways to an an extra legal bedroom. This may mean adding on a closet, but whatever the cost is it is worth it on the back end. The most important comps when analyzing properties in a market are square footage and bedroom count. The difference between a two or a three bedroom property can literally equal tens of thousands of dollars. This opportunity doesn't present itself on every property, but you should always look for ways to add an additional bedroom whenever possible.
• Avoid Personalization: When rehabbing a property you need to keep your personal feelings aside. As much as you may want, or not want, something in the house you are not the target market. Your main objective is to deliver a final product that appeals to as many people as possible. This doesn't mean you can't add your personal flair to the property, but you need to use some discretion. Painting the kitchen fire engine red may be something you would consider for your home, but you shoudn't do it on a rehab. You want the walls to be neutral so potential buyers will view things with an open mind. If your walls are too bright or your finishes are too loud that is the last impression buyers are left with and if the public doesn't like it your buyer pool will be greatly reduced.
• Kitchens And Bathrooms: You don't need to be involved in real estate to understand the importance of kitchens and bathrooms. Think about where you commence at the next party or small gathering you are invited to. There is a good chance that the kitchen is one of the main attractions. This is even more pronounced in today's market. Buyers are more focused than ever on kitchens and bathrooms. This should be the starting point when constructing a rehab budget. You should always consider your market with any rehab, but the kitchen and bathrooms should have extra attention. Spending a little more on nicer flooring or higher quality countertops often pays you back when you sell.
• Mind Your Budget: Just because you may have access to capital to spend, doesn't always mean that you should. In the simplest terms your goal is to add value to your property and make a profit. Simply spending money doesn't necessarily mean adding value. You need to do the right work for your market. Top of the line fixtures and countertops can be nothing more than a waste of money in certain markets. Every dollar that is spend must be accounted for. When you start to get loose with your budget you won't see the impact until you run the numbers. Your breakeven sales price will be higher possibly forcing you to list at a number that isn't realistic, adding to your daily carrying costs.
• Quality Counts: As we stated, your goal is to add value to the property. It is not enough to make some half hearted improvements and call it a day. Your property is going to be compared to other homes in the market. If the work quality is poor, they are going to look elsewhere. They will see that the flooring in the kitchen doesn't look great or the fixtures don't match the room. This sets off a red flag that there may be other items they can't see where the work quality isn't up to par. On the flip side if the quality is strong they will get an immediate feeling of home. They will be much more likely to want to live there and ultimately make an offer. If you have to wait a few extra days for things to be done the right way, you will be rewarded for it down the road.

You can crush your next rehab by doing the little things and keeping your eye on the seemingly minor details. Use these five tips to maximize the bottom line on your next rehab deal.