Investing in new real estate investment opportunities The average investor looks at the property and is comfortable with the amount of repairs needed to rehab and resell the property.
There are three very important aspects of doing smoke or fire damaged homes:
. 1 The After Repaired Value (ARV) of the property if it is fully rehabbed.
2. This is very important for rehabbing and getting as close to full market value as possible. The property has to be torn down. If a contractor does not do any damage repairs on a regular basis, he or she will probably give it twice or three times. We've seen estimates of $ 100,000 for a rehab that actually cost $ 22,000!
3. What exit strategy you want to use to sell the property. Your exit strategies are limited to repair or not to repair. If you just want to make quick cash then wholesale the property and never touch it. All you need is take pictures and send them to your email list. In this case the fewer the better because the less people will come. Professional rehabbers want to be interested, all others want to be scared.
If you are going to do the repairs yourself, you may end up with a buyer. This end-purchaser could live in the property or he may have taken it as a rental unit, either way, your profit margin could be substantial if you control your costs and do the rehab professionally. A conventional lender wants to have the papers that he / she wants to read and copy the Certificate of Occupancy.
Therefore, the investment value who does the re-construction depends on the extent of the repairs.
Next, get these properties under contract and wholesale them to other investors who can take on the challenges. Build your buyers list with contractors and investors. It is often easy to double the price you pay for the property if you can only pay for the property's land value, or even less if possible. If the structure of the property must be demolished, reduce your offer to ½ or less of the land value.
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Source by Dave Dinkel