Real Estate Investing – A tip on rehabs
I did a post yesterday on real estate investing – rehabbing and a couple of mistakes I made. Today I wanted to share a tip on something I did right with the same property. I’ll also show you another before and after set of pictures – this time of the bathroom.
I have to say if you are a real estate investor and you are into ugly houses, you can’t be faint of heart. I mean look at this bathroom!
Real Estate Investing Rehab Bathroom-Before
It’s usually a good idea to make sure you are wearing protective footwear before going into a house like this. After all who knows what you might end up stepping on. By the way, this home was not in a bad neighborhood. In fact, it was in one of the better neighborhoods in the city it’s located in.
Back to the point though, one of the things that I really recommend to real estate investors that are buying properties that need work is to MAKE SURE YOU PULL THE APPROPRIATE PERMITS. In this case my contractors pulled all of the right permits and we had the work inspected by the city. After it was all approved the inspectors signed off and cleared the permits.
This is actually good for two reasons. The first is that, I’m a real estate investor, not a carpenter, plumber, HVAC specialist, electrician, etc. Sometimes I do a bit of non-permit related work in houses if I feel like getting my hands dirty, or really dirty in this case. But that doesn’t make me a specialist. My job is to find the real estate investment and have an exit strategy, not rewire an electrical panel. This means that I don’t actually know how to properly wire an electrical panel. I have to trust the electrician on that. But while I have to trust him it doesn’t mean I shouldn’t verify (you know what they say, “trust but verify”). That’s why having a permit pulled is important, the city inspectors check the contractors work to make sure it meets the appropriate codes.
By the way, on this house the city inspector found that the contractors didn’t install enough roof venting so they had to add some in before the inspector would approve it. Since all work has to be done to code, this means I didn’t have to pay anything extra to have the contractor come back and do it right.
Here is the after shot of the bathroom. Yes, it really is the same bathroom! Hard to believe isn’t it? We actually gutted that bathroom all the way down to the studs and started fresh with it.
Real Estate Investing Rehab Bathroom-After
The second reason it’s so important to pull the appropriate permits is for your end buyers. I’m a licensed real estate agent, so sometimes I list properties myself, which I did in this case. I actually showed it to the family that ended up buying the property. One thing I like to do is to tell them about all of the improvements that have been made – new kitchen, new bath, new roof, etc. This way they know they are getting a totally renovated home. I also told them that we pulled all of the appropriate permits with the city and had it inspected. And you know what? They checked to see if I was telling the truth! They wanted to know that the work had been done right.
Sometimes investors like to cut corners to save on costs when it comes to real estate investing. Pulling permits can be a pain in the butt sometimes because it slows down work while they have to wait for an inspection approval. But it’s worth it. If I hadn’t made sure the contractors pulled permits for this house I would have lost those buyers.
By the way, I could have made a lot more money on this investment if I had used real estate timing as part of my investing strategy. But I didn’t know about it yet. Oh, if I’d only known then what I know now!