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Podcast 113 How to Repair Rental Properties and House Flips

1,044 views · Published 10 August 2017 · 25:31 · Indexed 4 November 2026

Channel: InvestFourMore Real Estate · 2017 · Education

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More information on this podcast here: https://investfourmore.com/2017/08/10/podcast-113-repair-rental-properties-house-flips/

Buying Rentals and flips can be an awesome opportunity to make money. However, buying the property is only one step of the process, you usually have to repair properties as well. Even if you buy rental properties that are in perfect shape, you will have to repair them at some point after you run into some less than stellar tenants. rentals. On this episode of the InvestFourMore Real Estate Podcast I go into how I repair my properties, and what other investors should look out for when buying houses that need work.

 Click the green button below to listen to the podcast How big of a remodel job should new investors take on? Many of the houses I flip need a lot of work! I have completed remodels that were well over $100,000. While you can make a lot of money on houses that need a lot of work, the risk is often not worth the reward. Below is a video of a house I recently spent about $100,000 on a remodel.

 

 

 This house should make me money, but it was a huge project that took too long and cost way more than I thought it should. I also had to let a contractor go during this job, which big jobs often do. When you take on a huge project it is really hard to accurately judge how much it will cost and how long it will take.  The longer you hold a property, the more money the project will cost with carrying costs. Every day you own a property you pay property taxes, financing costs, insurance, maintenance, which can all up quickly. A big project can also expose investors to market changes. I like to get all my flips bought, repaired and sold in 6 months. A big remodel can easily double the time it takes to complete a flip, which makes the project riskier if the market decides to decline. If you are a new investor I would suggest trying to find houses that are not complete gut jobs.

  How to find a contractor.

 What kind of repairs should scare new real estate investors? I had someone email about what repairs they should be worried about when buying their first investment. This is a tough question to answer, but I tried to do it on this podcast. There are many things that can cost a lot of money to fix:

  Mold Meth Foundation Electrical Plumbing Structural Sewer Line  All of these issues can cost more than $5,000 if they are serious, but they may only cost a couple hundred dollars to fix if they are minor. There are other repairs to consider as well like replacing windows, doors, roofs, HVAC, paint, bathrooms, kitchens, drywall, and more. These repairs can also be very expensive. The trick as a new investor is knowing what repairs will cost and how serious they are before you buy a home. Even though I rarely if ever ask for an inspection when I buy a property, I do not suggest that for inexperienced investors. What I suggest is a new investor gets an  inspection, and if there are major concerns have an expert in that field check out the issue. I talk much more about this on the podcast.

  What are the costs to repair a house?

 What should you repair on a rental versus a flip? When I flip houses I want them to be in really good shape. I am selling the house to a buyer who will be responsible for that property. That buyer will usually have a home inspection completed and want the home to be in great shape. To get the most money, I sell to owner occupied buyers who almost always get a loan. When the buyers get a loan the house has to be in livable condition meaning the furnace, roof, plumbing, electrical, walls, paint and other items are all in good shape. I will replace furnaces, roofs, fixtures, kitchens, baths, doors, windows, flooring, and more on almost every flip.

 When I buy rentals I do not have to repair as many items. Renters know the landlord will be responsible for items that wear out or break. The tenant also knows that they are only living there for a year. Because renters are much less picky than buyers, you do not have spend as much money on a rental. I still want the home to be safe meaning the HVAC is in good shape, the electrical system is safe, the plumbing is decent, and the roof does not leak. However, I may not have to replace all the fixtures, the kitchens, baths, the windows, or the doors.

  What to repair on a rental versus a flip.

 The Book on Negotiating Real Estate is now available as an audio book I have been promising that this book would be ready for a while, and Audible finally published it. You can get this book on Amazon as a paperback, Kindle, and now audio!

 Facebook marketing group I have also started a new private Facebook group for finding deals. This group was started by me and the guy who helped me start a very successful direct marketing campaign this year. I bought one house from direct marketing and have another under contract to buy from my first mailing. This group also consists of some other very...

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