Interior and Exterior Rehab

Cosmetic Rehab is work such as granite counters, flooring, etc. These items add the most value to the tenant because that’s what they see. Structural rehab is work such as foundation repairs, replacing electrical boxes, plumbing work, etc. These items are absolutely necessary to provide a safe living space, but they won’t be appreciated by the tenant because they can’t see it.

If you are just starting out, you want to stick with projects that don’t require too much structural work because they are more expensive and require a lot more experience. The process to source for labor is the same for both.

Do not be intimidated by rehab work. Your goal is to get a property at a discount so that you can spend money on rehab and add value. Your rehab budget can be financed just like the purchase of the property. It’s rolled into the total deal value. There are many factors that determine your rehab budget. We will discuss all those points in this presentation.

This is the biggest factor that will determine your total rehab budget which will determine how big your loan and mortgage payments will be which will eventually impact your returns. If you use a general contractor, you will pay more because they make money on buying material used on your project and obviously labor. When you hire a general contractor, it’s a turnkey operation. You walk through the property and tell them what all work you want to get done. They will give you a detailed quote broken down into different tasks. You don’t have to worry about labor, material or managing the project. Of course you coordinate dates and which units to work on. But for the most part they take care of everything.

Now if your goal is to understand every little detail of the rehab process and manage the work, you will need to pull up your sleeves because it is a lot of work and takes a lot of responsibility. You need to source material for quality and price.

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