Emerson Update: Progress to Date

We are starting to get our pricing on Emerson. We have one more contractor we are getting pricing from and we will be ready to begin.

We will also be starting a series of videos that will have two purposes.

1. The first is to show exactly what work will be done to the property. This video is intended for the prospective buyer. We have found that a video showing the rehab progress creates excitement about the property but also shows the buyer exactly what work we have done. A lot of times a buyer comes into our property and they see the new paint & carpet, etc and it does not show the full story of what we went through to rehab the property. The video does that for us.
2. The second is a learning aid for those investors that have not done a rehab or those that want to compare notes on how we do it. There are many ways to do rehabs and we are constantly learning and refining our process. We will show the process we go through rehab a property. All the steps and missteps we take to get a property ready for sale or lease.

Today we will be going out to Emerson and begin filming our progress on the project. This first video will be a site survey and overview of the property. Please let us know if you have and questions or comment as we go through this process. We want to provide relevant information to you.

Why You Need a Realtor

If you have been an investor for any length of time and have gone to any real estate seminar you will hear how real estate agents are the scourge of the industry. I have been to dozens of bootcamps and workshops and everyone loves beating on the real estate agent. Like they caused all the problems the investor had on their last deal.

Yes, like in every profession, you have people who are not professionals and do not know what they are doing. Real estate is no different. But I am here to tell you that you need and want a professional Realtor on your power team. A professional is someone who understands how an investor thinks, knows to ask what they are looking for and not afaird to say when they do not kow something. They know their market and can bring deals to the investor. A good realtor will save you money and time.

I can relate a costly mistake we recently made. We were selling a house and it was a good house with a good profit margin on it. But we gave thousands of dollars based on a disclosure. A simple disclosure that we signed and left off limiting laungage about the max amount of the repairs we would agree to pay. A typical thing to do according to a realtor friend of mine. We missed it and we had to do the repairs that we could have split with the buyer. All to save 3% on the deal. By the way, the cost of repairs is more than the 3% we would have paid the realtor.

So have a real estate agent on your power team and tell them up front what are your expectations. If they do not meet those expectations then let them know ad find another one.

Real Estate: 410 Emerson Ave Rehab

Now that we are getting another rehab project going, I should step back-up and give you a little back ground on. I mentioned in my last post that the house is 1050 square feet in size with 3 bedrooms and 1 bath. The house was built in the 1950s. Good, solid house that has seen better days but it is in a neighborhood that has held up well. It is certainly the worst house in a good neighborhood.

We purchased the house from a woman who needed to get out. We will now spend the next five weeks preparing the house to be leased by a future homeowner. The budget is tight on this one, but this economy is getting us some fantastic prices from contractors. I believe we can get the price down to $15,000. That would be great.

You can check out the house at our website JM2 Sells Houses.

See Ya,
Mike

Real Estate: Next Rehab Project

We have looked at how we should, in theory, perform an inspection. Now I will go through a rehab to show you the actual steps and missteps we make. There is always something we over look in the initial inspection. That is why we have a fudge factor in the estimates to allow for something that is overlooked or hidden to our original inspection.

Emerson is a 3 bedroom, 1 bath single family residence with 1050sf. We are going to rehab it so we can Rent-To-Own (Lease Purchase Option). I estimate rehab time to be 3 weeks from start to finish. Estimated start time is April 30th. Here is our scope of work & my estimate for the rehab at 410 W Emerson Ave:

Basic Rehab

1. Landscape:............................................................$1500
2. Paint: Exterior & Interior......................................$3738
3. New gutters............................................................$250
4. New roof.................................................................$5175
5. Repair fence south & east side of property............$500
6. Repair holes in wall................................................$500
7. New flooring...........................................................$3450
8. New cabinetry.........................................................$350
9. New countertop......................................................$750
10. Repair wall heater..................................................$250
11. Replace doors: kitchen, garage & entry door........$375
12. Replace outlets and switches.................................$750
13. Replace toilets (2) & tub (2)..................................$350
14. Replace vanity........................................................$350
15. Replace appliances................................................$1000
16. New hardware.......................................................$575

Price out

1. Replace interior doors.............................................$867
2. Replace windows (vinyl).........................................$1500

So my initial budget is $19,850 with $2367 for additional work. We will see how I did in a day or two. I am having a contractor give us a price to do the work. In the meantime I will be doing videos of our progress. I will be posting those soon.

See Ya,
Mike