| One comment that I hear over and over from | | | | In fact this is simply not true. That is not the way |
| new real estate investors is that they say they | | | | it normally works. And I am here to tell you that |
| are looking for a "light rehab" or a "cosmetic only | | | | it is much easier to turn a profit and certainly a |
| rehab". When I ask them why, many new real | | | | significant profit on junker houses that need |
| estate investors do not know why. Some do and | | | | significant renovations and/or updating than it is on |
| they say that they would "feel more comfortable" | | | | houses needing very little work and zero updating. |
| starting slow, or they do not know any | | | | To make money in short-term real estate |
| contractors, or they are not sure what to do | | | | investing, you need to buy low, renovate |
| first. Some new investors have actually admitted | | | | inexpensively (though not cheaply) and sell quickly. |
| that they are too scared (even though they are | | | | When homes only need paint and carpet, or even |
| not sure of what) to take on a big job in the | | | | paint, carpet and roofing (for example) sellers |
| beginning. | | | | simply do not need to discount them as low as |
| I continue to educate new real estate investors | | | | we real estate investors need to buy them. |
| that generally speaking, looking for light or | | | | The Real Estate Investors that I know who are |
| cosmetic rehabs is not how this works. And if | | | | constantly profitable (no matter what the news |
| you are looking to continually feel comfortable | | | | says the housing market) are those who are |
| then you might want to look for another hobby | | | | looking for the worst house in the best |
| or a different business. Most successful people will | | | | neighborhood. |
| tell you that you must get outside of your | | | | We are looking for tall grass, unkept shrubbery, |
| comfort zone to excel. | | | | damaged roofs, and fallen gutters. Investors like |
| Let me start with a few questions: How many | | | | properties that have been condemned or that |
| books on real estate investing have you read say | | | | have code violations. We look for holiday |
| to go look at properties that need only paint and | | | | decorations in the middle of the summer which |
| carpet? How many bootcamps have you | | | | might tip off an investor that there is probably |
| attended teach new investors to look for 10 year | | | | differed maintenance on this home. This means |
| old properties? How many infomercials have you | | | | the owner (who normally removes holiday |
| seen that speak about cosmetic rehabs? | | | | decorations in January) may be ready to get rid |
| I will answer first, how about not many or even | | | | of this property. |
| none, zero. While I continually see many new real | | | | The bottom line is that if you are looking to make |
| estate investors say that they are looking for a | | | | money investing in real estate, it is time you stop |
| light or cosmetic rehab to start, it is my belief | | | | looking for light and/or cosmetic rehabs. The real |
| that this is entirely based on fear and the feelings | | | | profits are in the tired, old, smelly, fixer-upper |
| that this will make it easier. | | | | type properties! |