If you have been considering opportunities in real estate rehabilitation, you may be looking to experts like Joseph Pingaro for help in learning the basics. As you probably already know, investing in a property with the intention of upgrading and improving it, and then selling it for a profit, is an excellent way to learn about available real estate and make money. This process, known as real estate rehabbing, involves finding a suitable property, assessing its overall value and needs in every area, making the required repairs, marketing the property, and eventually selling it.
While many shows like Flip or Flop, Property Brothers, and Fixer Upper utilize this popular strategy, TV shows on HGTV make the process of real estate rehabbing appear much simpler and easier than it is in real life. In truth, people invest time, effort, energy, and money for one of three purposes: for personal use, for the purpose of developing a rental property, or to complete a flip for sale. Each type of real estate rehabilitation process carries a different level of risk and investment.
Start with your own to decrease risks.
Joseph Pingaro, a man with decades of experience in real estate rehabilitation, agrees with many others in the realty industry that it is often wise for beginners to start by rehabbing a house for their own personal use. This recommendation rests on the understanding that it generates a lower risk during the learning curve. Without having the added carrying cost of a second property, you can learn the basics of investment and the requirements of rehabilitation projects without the pressure of added time or limited money. You can also find out if you have the requisite knowledge, skill, and patience required to make real estate rehabilitation a true source of income for you or your family.
Since house projects themselves can take anywhere from weeks to months, a beginner can deal with just their regular living expenses without the added concerns of additional mortgages or worries about timing. If you live in a home while rehabbing it, you won’t have the same time pressures. When you are rehabbing a property with the intention of fully flipping it, every day you extend or work on a project, you lose a little piece of your profit. In short, holding costs equate to a ticking time clock. When you experience an issue or a delay, you lose money. If the real estate market makes a fast sale difficult or impossible, you lose money. For beginners, especially, the risks associated with flipping are enormous, and learning on your own home can be a boon if you are concerned about making mistakes common to real estate rehabilitators.
Start with your own to improve your vision.
Starting with your own home also has an added benefit. As many rehabbers have found, renovating a house with the intention of flipping means you will need to keep the end user, the eventual buyer, in mind. Real estate rehabilitation means making a variety of choices, including paint color, rug texture, tile design, and even landscaping plans. If your first project is a flip-to-sell, you will need to make conservative choices that will appeal to the widest audience of potential buyers.
Flipping a home that you intend as your residence allows you to explore non-traditional options, incorporate your own personal tastes, and be creative in choosing materials and designs. You can try one of the many game-changing kitchen remodels you’ve been exploring! It will also allow you to hone your project skills, acquire tools and machinery, and do research into the real estate market and area you are targeting.
Learn as you grow with your own.
Expect to make mistakes. No matter how much you prepare, no matter how much research you do, as a first-time rehabilitator, you will make mistakes. If you are not under the constant time constraints and monetary pressure of completing a flip, you will learn more quickly and easily from your errors. Take the lessons you learned and apply that knowledge when attacking your next project. Remember that lost money and time mean more in a flip for profit. Instead of trying to earn hundreds of thousands of dollars on your first investment deal, look for one that can teach you what you need to know and move you toward future success. Start small and keep the entirety of the project within your ability to handle. With each success you experience, you can move on to bigger, tougher, and more profitable projects. As your ability grows, your confidence and your profits will increase!
What questions would you ask the experts about starting in real estate rehabilitation? We look forward to your thoughts.