Real Estate Central

BELLTREE REHAB PROJECT

My partner and I purchased a property via a short sale a little less than a year ago. The appraised value of the property was approximately $160,000.00, after several offers and counter offers with the lender we were able to purchase the property for $104,000.00. We accessed the house before hand and estimated $8 - $10,000.00 of rehab which put us at right about 70% ARV, so the numbers worked out in our favor to make it a equitable deal. When we were negotiating with the bank on the short sale, we actually submitted the retail cost to rehab. That retail cost for rehabbing equaled $23,543.

Before we submitted an offer to the lender we went through the house and determined what we were going to replace and what we were going to leave alone as well as the cost. Carpet and paint are almost always going to need replaced, this was a 2000 sq. ft. house so the carpet ended up costing us right around a $1000.00 and the interior paint was about $1500.00. There was also a $600.00 fee from the contractor for removal and labor for carpet, wallpaper removal, vinyl/sub floor removal, counter top removal, and kitchen cabinet removal.

The number one thing to sink your money into when rehabbing is the kitchen and bathrooms, that is what women want and women buy houses. Buyers always focus on kitchens and bathrooms so if you want to sell your house quickly you better make sure they look very incredible.

Let’s start with the kitchen the counter tops were a style that was popular in seventy’s so we definitely decided to replace them with tiled counter tops which ran us about $300.00. The cabinets were old and out dated so we had them removed and new cabinets put in which was another $800.00. The kitchen light fixtures as well as the hall and bathroom light fixtures also were replaced for $350.00. We put all new appliances in the kitchen (stove, frig, dishwasher) mostly because the appliances were very old plus we didn’t want the kitchen to look partly new and partly old. The tile on the floor looked ok so we decided to just clean it thoroughly. We spent the most money in the kitchen since it is the biggest selling point in the house.

The bathrooms were next this house had two and a half baths so the first thing was to replace all the toilet seats $75.00, we also needed one of the tubs upstairs refinished, a new tub surround, and the floor retiled. The master bathroom only needed the floor retiled; the cost to retile both bathrooms and the tub surround was $700.00. All the trim and doors on the second floor needed painted which was another $600.00. We put new wire shelves in one of the bedrooms ($140.00) but other than that the rest of the upstairs was great condition.

On the outside of the house we spent $500.00 on landscaping remember curb appeal is very important if they don’t like the way it looks when they pull up they may not even come inside. The deck outback needed repainted badly ($150.00). Squirrels had damaged one of the gutters and fascia board on the back of the house so it needed replaced badly, we spent $220.00 for that repair as well. In the end everything we fixed or improved on this house either needed repaired or increased the value of the house.

To review, after we ran the numbers, negotiated with the bank, put a sign in the yard to advertise the property immediately, and interviewed several contractors we set up a closing with the title company (it would be wise to get a check off sheet from your lender prior to closing they always seem to require a few extra documents a the last minute which can really gunk up your closing). At the closing make sure all the numbers on the hud1 match all the numbers from the hud1 that you should have received 24-48hrs before closing. Next we switched all the utility bills into our name. We went to the property that day and hauled everything out that was left in the house so our contractors wouldn’t be delayed, if you don’t have the means to do this yourself you need to hire a cleanup crew to do it. If the house was a foreclosure there’s a good chance they will leave behind a lot of junk.

The day after closing we had the contractors in there ripping everything out that needed to be. The landscapers did the outside part while our contractor worked on the inside. This rehab project is pretty easy and did not require a lot of coordinated effort. You will need to make sure the water, electric and heat is on before your contractors start work.

The landscapers, painters, and carpet contractors we paid upon completion and inspection of the work. The general contractor doing all the rest of the rehab we paid in draws. I had schedule times to check the progress of our work schedule that we had laid out for the contractor. We also had penalties in place if the contractor ran over the time line.

Finally make sure your real estate agent has the property on the market immediately, starting at the end of the rehab.

See Also

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• Business Credit Services Company Business-Tradlines.com Says FICO 08 Won’t Stop Scammers

Source: Real Estate @ ArticleCube.com