Rehabbing an OLD house

Who ever said this business was easy?  We are rehabbing a house right now, and between additional costs, and disorganized contractors it is proving to be a headache.  It is important to understand the details involved in doing a rehab - the time, effort, energy, and the $$ involved.  

I am on top of this job and fortunately I have done some rehabs before, otherwise this one could have been a doozy!  The issue with rehabbing, especially for the unsuspecting newbie, is that 

costs can be underestimated on a flip and can quickly eat into a margin, and make the job a total disaster financially.  Noone wants to invest in a house, babysit the rehab, and then lose money on the project.  

I will keep you posted and will post photos on the completed project.   We have two exit strategies keep it for cashflow or flip it quickly to increase the pool of money to continue to buy propertiese.   We purchased this through an IRA (Individual Retirement Account), and either way will be fine. 

The skills acquired from actually doing projects cannot be understated.  There is noting like getting into the market and doing deals - if you coordinate and rehab a house you will dramaticallya  increase your skills with each project.  These are skills that cannot be learned from reading a book, or vicariously from someone else, but when one negotiates and manages a job and they will not be easily taken advantage of. 

Here are four things that you should know when you buy a house:

1.  What are the issues with this house? ( If you have foundation issues, major plumbing, and water damage - just move onto the next deal)

2. How much will it cost to complete the repairs?  Get a complete quote prior to the start of the job.
3.  Who will do the work? How reliable are they?

4.  What are the exit strategies for the property in the event that it does not sell.

Pay vendors quickly - I pay a deposit upon starting the job, and give full payment on completion of the job - that is the day the job is finished.  This keeps contractors wanting to do business with you.  This has worked in my contract office furniture company also - we always pay our vendors first.  This creates loyalty and long-term relationships which is one of the goals of any business that wants to have longevity in the market place.