Ok so I’ve put together a quick video today titled how to make money rehabbing houses and real estate. Now the fix and flip side of real estate investing it really can put large chunks of money in your bank account. However there are also mistakes that really can be costly so pay attention. Here are a few helpful guidelines for both new and advanced investors. If you want to rehab houses and sell it for a profit it’s a good idea to start with a property that requires only cosmetic fixes. Now when I talk about cosmetic fixes, examples of these would be like carpet, paint, light fixtures, door handles, maybe a vanity in a bathroom and at the very max, maybe some kitchen cabinets.
But other than that we are staying basic, there are just improvements that really are going to add quick value to the property. We are not talking about room additions or demolition or anything like that, just straight forward easy cosmetic fixes. Now, focus on properties that are at or below your median price range for your area, you want to stay pretty close. So some of you are asking well how do I make money, how to I run the numbers and make it all work together. Well listen, a rule of thumb that we follow for cosmetic fix and flip properties is of course we stay in the median price range and we look to get a 20% return on the properties final sale price when we are done. So if the property takes three weeks to fix up and let’s say the projected selling price conservatively is 100 thousand, we would expect to make 20% of that number or 20 thousand total for our profit and out time. Now there’s always going to be unexpected cost when you get into a rehab, they just come up, so be sure to account for those with a miscellaneous fund. Now here’s some final guidelines to work the numbers to be in profit mode. Look at properties that are potential fix and flip properties. And what you want to do is determine the conservative or the market value of the property in its fixed up condition after you fix it up. So lets say after you fix it up it’s worth 100 thousand dollars. Number two, you’ll want to add up your repair cost, so when you’re walking through the house you’ll have a little notebook and you’ll say it needs carpet, you know that going to be three thousand dollars, it needs paint, its this and this. So let’s say in this case, our estimated repair cost are eleven thousand dollars. So number three, you’ll want to add up your estimated holding cost and realtor commission. so your holding cost are going to be utilities, it could be your payments for interest payments for the mortgage, and also of course your real estate commissions. In this case let’s just say those two combined we’re looking at an eight thousand dollar number. And finally number four is include your twenty percent or better profit. So in this case we are shooting for twenty thousand dollars. So from the numbers above we are going to use these exact numbers that we just talked about. So we came up with in this example a one hundred thousand dollar estimated selling price. Now again that is conservative, so with this in mind we’re looking at the recent sales are showing a median of comparable homes selling for 110 or slightly better. We want to be conservative so we don’t get caught in a pickle and it will make your house more attractive if you are slightly priced below the market sales. If you have any questions or need any help with any real estate investing, whether you are dealing with wholesaling, fix and flip, renovations, lease options or you’re buying cash flow rental properties, if you want to schedule a 30 minute private coaching session with me you can do so right now by going to http://www.FlippingHousesLive.com and on there just click on the training page, schedule a time that works best for you and I look forward to helping you with your real estate investing.