Episode 13: The 12 Truths of Rehabbing

December 16, 2015

The truth and nothing but the truth! I’m sharing 12 myth-busters for real estate rehabbing including anyone can do this and it works in any market regardless if the market is up or down (if done right -of course). I touched on this topic in Episode 3 but want to dive deeper for your benefit because this stops many from being successful…

Show Notes

1 “Flipping” houses is legal and ethical

  • Don’t let anyone tell you otherwise
  • Solves motivated seller problems
  • Care for neglected repairs
  • Improves the neighborhood
  • Transforms lives

2 It’s A Good Thing for All

  • For the seller
  • For the buyer
  • For you
  • For the neighborhood

3 Works in any market

  • Done right works in up or down markets
  • Right approach works anywhere

4 Your make money when you buy, not when you sell

  • Most people think you make your money when you sell and hears why
  • Word of caution with this mindset
  • Instead focus on… 70% ARV Rule (deep dive on this rule… later episode
  • Profit driver is discount from FMV

5 Buy at intrinsic value of the investment

  • Replacement cost, different than current value
  • See each opportunity for what it realistically can be
  • The value of the skill of how to visualize an ugly duckling into a prince
  • Be objective
  • Stay true to your numbers and formulas

6 Rehabbing is not a gamble

  • Risks with every property
  • Know your market & property
  • Speed
  • Singles – not swing for the fence

7 Keep it simple

  • Especially on your first one
  • Multiple simple ones better than one complex

8 Know your worst case scenarios

  • Murphy’s law – be prepared
  • Don’t be negative but consider the worst
  • Know what to expect, react quickly

9 Know your exit strategy

  • Buy, rehab, sell – the first is great but then what?
  • Know what you’re going to do before you buy
  • What to sell for, when and how

10 Rehabbing houses is a people business

  • Your reputation is far more valuable than any one deal
  • The relationships you build, build solid ones, reap the rewards
  • Plant seeds, nurture, harvest…. The Word says…

11 Anyone can do this

  • With the right approach
  • With the right guidance (e.g., mentor or coach)
  • With the right team

12 Have the Right People on Your Team

  • Right information
  • Right realtors
  • Contractors
  • Mentors
  • Begin prospecting for your team now and always