Let’s say you’ve found the perfect investment property to rehab & flip or to fix-up & rent. You have done a quick estimate of repairs you think need to be done, submitted an offer, it was accepted and you then ordered an inspection. Then what?
Using Inspection Report
Make note of any unexpected problems that were discovered in the course of the inspection. Start working in contractors, and handymen to get estimates to fix, repair or replace items in your potential investment property.
Determine where or not it would be a wise decision to continue to negotiate the purchase price. [Investing Tip – This has worked for me once!]If your are working with a bank, send them a copy of the inspection report and ask that they negotiate further on the price. You never know how motivated the bank is. There is no harm in asking and usually their response to a list of repair is that they will have to lower your lending amount because the value has decreased. If the seller wants the deal to do through they will lower their number most of the time so that the sale with your loan can do through.
One your offer has been accepted, schedule the repair men to start work on the investment property the day AFTER your anticipated closing date. Once you have closed on the loan for your investment property, the interest clock is ticking and your holding costs are rising. Arranging ahead of time for work to begin on the property immediately after closing is crucial.
When getting estimates, try to schedule all of your rehab people to come to the property either at the same time or in 15-min increments. to minimize the number of trips you have to make to the property.
WARNING: Don’t do any work on the property prior becoming it’s owner unless you are 100% positive you will close on the deal. You do not want to spend money on property that date may prevent you from purchasing.
Remember you can double-schedule your repair guys as long as they won’t be tripping over one another. For example, it is unlikely that scheduling a roofer, plumber and gardener to work at the same time would prevent any problem.
One last tip: Get to know an Investor Friendly Handyman !
Until next time….Camille