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Rehabbing Your Foreclosure



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By : Karim El Sheikh    99 or more times read
When you purchase an auction or REO foreclosure property, you need to take into account costs for rehabbing the property. Always have a home inspection conducted by a professional home inspector.

You can walk around the property yourself before you make an offer looking for cracks or other structural damage, termite damage and observing the roof to give you an idea of whether the home is worth making an offer on.

Structural damage, a new roof and replacing the home systems such as heating, air conditioning, plumbing and electrical are the most expensive items.

Once you purchase the property, the following tips will help your rehab project become a success:


Budget

Set aside a budget for your repairs and stick to it. Many investors make a mistake and exceed their budgets because they miscalculated or overlooked something.

Make a checklist to help you with the calculations. Homes that just need cosmetic repairs are the best investments because those you can do inexpensively compared to major repair rehabs that include replacing roofs and fixing structural damage.

You may want to stay away from properties that need expensive repairs and stick to simple cosmetic repairs such as replacing kitchens and baths, new flooring and painting.

Having to change flooring is pretty much a standard item for most rehab projects that involve foreclosure properties. Choices are carpet, laminate/pergo, wood, tile or marble depending on the type and size of the property and how you intend to use the property.

If you are going to lease it out, you may want to skip the carpet because you have to replace that more often. Tile, wood or pergo/laminate are better choices especially if you are renting to tenants that have pets.

Painting inside and out should be a top priority on your list. Use neutral colors because they go with everything and most tenants donít like bright or dark colors. Lawn maintenance should be on the list of to-doís also. Planting new trees, flowers, shrubs and trimming bushes.

After awhile you will get familiar with these costs so figuring your budget will be much easier. Always get at least three estimates. Try and get referrals from your Realtorģ or other investors and never give anyone a large upfront deposit for the work.

Also ask for references of past jobs and call them to make sure the owners were happy with the work. If you are unsure about them, give them a small job to do first and see how well they complete it.

If you donít have your own cash to complete the rehab costs, then you might want to get a private money loan. Expect to pay points. This way you wonít deplete all your cash for other rehab or investments. Or if you are handy, you can do the work yourself and save a bundle on labor costs. You need to calculate your time involved though.

If you are in a hurry to rehab and lease or sell the property, then hiring professional vendors makes more sense. Also, always pull permits whenever necessary so you avoid city or local municipal code violation problems when you go to sell the home.

By following this simple advice, your rehab project should be an enjoyable and profitable experience. You donít have to be a rocket scientist to calculate your rehab costs. It comes with experience and will get easier because you learn shortcuts and find better ways to accomplish your rehab task the more times you do one.

Rehabbing foreclosure property is a great way to make money on your investment. It increases the property value and will help you to get the home rented or sold depending on how you decide you are going to use the property.
Foreclosure.com is the internet source for real estate investors and homebuyers. Search foreclosures, preforeclosures, short sales, and rent to own homes.

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