This is a topic that can be the deciding factor in whether you make a lot of money on rehab or rental, or lose money. What I’m talking about here is spending too much money and time on fixing up properties. There’s an art to knowing how much “improving” is necessary and appropriate.
The Over-Improvement Trap For The Rehabber
For the rehabber, there is a delicate balance regarding how much and which improvements should be made in order to save money. We’re being pulled in two different directions. The first is that we need to keep everything we do within our budget. Do you know those analysis calculations you do before you make an offer? I sure hope you are. Well, you use certain numbers in those calculations for the cost of improvements. You need to stick to those numbers so that you can realize the profit that you assumed you would make. This requires that you don’t go overboard on spending.
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