5 Big Eye Popping and Value Increasing Home Projects

Thank you for sharing this valuable insight with us. Good luck on all your future real estate deals! Believe and Achieve! - Joe

Inasmuch as Matt has provided you with some valuable insights as to the best value rehab projects (I looked these up in a separate location), I thought it might be helpful to provide a location where you can go to check on the return you can expect from your rehab project.
Every year, Remodeling Magazine has a special issue that lists the expected resale returns on Moderate and Upscale remodeling projects, regionalized for your particular area of the country. I believe the issue comes out in June, and they also post these results online. An easy search can tell you the return values for the best projects, and a rough estimate of the costs. Most of the returns show up as a fraction of the cost, but a smart rehabber can economize and make some of the projects pay more than their relative cost.

I just want to add 2 more things to what Matt and Dallin have already shared with you. I have found 2 things that have really helped me move my properties real fast and have really added value to my properties.
First, I want each of you to consider this upgrade, but ONLY if you find a good sub-contractor that can do the job very inexpensively. I have a sub-contractor that can put granite countertops in for just over $750 more than Formica countertops. This is a great value to me because it provides the “WOW” factor in my homes and I can move my homes quick if I have “WOW” factors placed throughout the home.
Second, I place A/C units in my properties if they have never had any evaporative cooler or air conditioner at all. This is another “WOW” factor that helps homes sell fast. Just make sure you calculate these prices in your numbers and you are not losing money but making money.

Finding “GOOD” and “Inexpensive” subs, can make a HUGE difference!!!!

HAPPY REHABBING!!!

I have a good friend who rehabs and resells properties. When he purchases the property, he moves in, and lives in the property while he is doing the rehab work. One day, he and I had an opportunity of making a trip together, and were in his car for two hours each way. He confided to me that he really had not made money on the 6 rehabs that he had completed and sold. I asked him about the work that he does, and he proceeded to tell me about the most recent job, and how he had learned a new stippling technique for painting that makes the walls look like they have fine leather on them. He had used this to really make the living room of his current project look stunning.
Needless to say, I soon figured out what the problem is. He completes his work in the evening, and then sits around staring at things, figuring out what else he can do to the property. His end result is always the most attractive property in the neighborhood with lots of custom detail. He makes the properties look like what he likes to live in, because he is living there while he does it.
This is NOT the way to rehab a property. There are four reasons why you choose to do a particular rehab project on a property, and these are in descending order of importance.
1) Occupancy/Safety Requirements--Properties must meet legal requirements for occupancy and safety. No matter what the cost, these requirements must be met.
2) Net Profit--Return on investment (ROI) is increased by spending less and selling for more, so every project should be evaluated on the basis of maximizing net profit.
3) Matching Local Standards--If fixtures or other features are substandard for the area, the property will not compare favorably, which will result in the property being difficult to sell. Also keep in mind that properties being rehabbed to rental standards do not require the same rehab budget as properties being rehabbed for resale to owner/occupants.
4) Marketability/Appeal--Appearance factors, curb appeal, currentness, detail are all factors that can accelerate the sale of the property. Care and discernment must be exercised here, as it is easy to justify in your mind expenditures that really are unnecessary.
I hope that none of you end up in the same situation as my friend, it took him six rehab properties to finally learn that he is rehabbing for the sale, not for his own living standard.