It only took 6 months (I’m being sarcastic!) but I closed my first deal as an agent. I received the referral from a good friend of mine. I was hesitant to take on the listing because the 2 properties next door were boarded up and vacant. Just a few tips for anyone looking to rehab:
- If you’re working on your first rehab, don’t be a pioneer in an iffy neighborhood. Ideally, if you’re going to be the first rehab to hopefully turn around a neighborhood, make sure there are similar sold properties in the IMMEDIATE neighborhood first. The definition of immediate neighborhood can vary from place to place. It’s up to you to understand where neighborhoods cut off to ensure you have the right comparables in order to price your property correctly, right out the gate.
- For something you plan to flip in the short term, don’t buy next to a vacant property OR if you plan to buy next to a vacant property, lower your anticipated sales price to entice your buyer. If there are 2 completely renovated properties on the market priced exactly the same and one is next to a vacant boarded up property, would you make an offer on the one next to a vacant house? Probably not. BUT if that same house was $20,000 cheaper, do you think you would consider taking that risk for $20,000 less? Maybe, maybe not. But at least now you are making your property stand out by being priced lower.
- Rehab your property with the end buyer in mind. High end finishes can sometimes be a waste of money, when it isn’t necessary for a particular market. Again, this is about understanding what has sold in your immediate market. If other properties are/are not doing things to their rehabs, keep the money in your pocket and deliver a product that is similar to what’s available, but stands out as well.
Happy rehabbing!