Before you start your rehab work, you need to determine what requires repair and upgrade work. Here are six areas to inspect BEFORE you start.
Congratulations! You found the ideal house to fix and flip, and you believe the worst is over, right? Wrong! Just because the search is over for the golden property doesn’t mean you’ll enjoy smooth sailing from here on out. Now you get to focus on executing a phenomenal rehab because, let’s face it—without a significant rehab, there’s no quick resale. And without a quick resale, there’s no massive profit waiting to reward you at the end of the process. So, where should you focus your attention before taking on this rehab project?
The six areas that impact your profitability the most on a rehab project include the basement and attic, the electric/plumbing/HVAC, the walls and floors, the kitchen, the bathroom, and finally, the appliances/fixtures/locks.
But how do you begin? Before starting your rehab work, you need to determine what requires repair and upgrade work. Which areas deserve the most attention and professional work? Here are six places to inspect BEFORE you start knocking through walls and replacing fixtures.
There are many factors that go into rehabbing a house in order to flip it. Some things you may need to budget for include:
In terms of the actual amount of money you’ll need, really the sky is the limit. You can rehab a property for $0 or $100k, but I’ve drafted a few rough calculations you should consider in this guide to help get you started.
Before we dive into the specifics, I want to give you a few tips for how you should conduct a preliminary inspection or walkthrough on a potential investment property:
Why these matter: Water damage can cause mold, and structural damage or wiring issues can lead to dangerous conditions where perhaps the entire house itself cannot be saved.
What to look for:
Why these matter: Outdated fixtures and features often need to be redone to comply with the most recent building codes. Some things can get grandfathered in, but others may need to be replaced altogether for them to pass your buyer’s inspection.
What to look for:
Why these matter: Mold can be a serious health hazard, and asbestos is known to cause cancer. If you’re aware of any potential environmental risks in the property, you may want to disclose this to your buyer to get them to take the property off your hands.
What to look for:
When inspecting a property, it’s always good to start at the bottom and work your way up. Go check out the basement. The primary item you want to keep a lookout for is water. Is there any evidence of water on the floor? Do you see or can you smell any mold? If so, you have a leak on your hands that you need to locate and fix ASAP. You will also need to eradicate any mold. While you’re down there, see if there’s any significant damage in the foundation or any termite damage. If so, you may have more rehab problems than you bargained for.
Take a quick look at the attic as well. Check the insulation and roof joists and make sure they are in good condition. Also, be on the lookout for any frayed, damaged, or strange wiring. These are problems just waiting for an excuse to burn down the house, and it’s best to get them replaced before they can cause any trouble.
One tip: If you see spiders, that most likely means there are gaps in the insulation letting air into the house. Spiders are great canaries for this; check out where their webs are and feel around for any airflow.
Speaking of frayed wires, the electrical system is one item on which you’ll want to perform a thorough inspection. First, you need to inspect the service, Weatherhead, meter box, breakers, and outlets. If the entire system looks outdated or damaged, you may need a new or upgraded service.
If you’re looking to replace or add an HVAC system, you will definitely need to upgrade your electrical system. With an HVAC, the inspection is pretty simple. First, check if the system is operable and in place. Then, make sure the ducts are in place, and you can feel air coming out of the ducts once the system is turned on. Also, check if the HVAC is too old or if hot air blows when it should be cold air and vice versa.
You can actually check the plumbing system while you’re inspecting the basement. If you catch mold or water in the basement, you can safely assume it’s a plumbing problem and isolate it. Once you eradicate that specific issue, you can inspect the rest of the plumbing. First, try every faucet and fixture to ensure they work. Then, keep the water on and check for any leaks anywhere. Listen closely for dripping or splashing.
Believe it or not, the walls are critical pieces for determining how fast your fix& flip will sell as they’ll be the first thing a buyer sees when they walk into your home. If any walls have holes, mold, or other significant damage, you will need to replace them. Also, take a look at the flow from room to room. Is a wall blocking an otherwise flawless flow from the dining room to the kitchen? You might want to get rid of it. Many fix-and-flippers end up knocking through walls to open up a living space or kitchen. This makes the room more aesthetically pleasing and gives the illusion of more space.
Look at the trim or molding. Are they damaged or old? You might want to replace them. Give the walls a complete makeover in warm, neutral colors.
A word to the wise: hardwood floors are IN right now, especially on the main level. Look into refinishing hardwood floors in the living room and dining areas. Check the flooring in the kitchen and bathrooms. Do they need to be upgraded from vinyl to tile? Also, inspect the carpets in the bedrooms and ensure they’re in excellent condition. If they are damaged or irreparably stained, you will need to replace them.
The kitchen is the heart of the home. Therefore, you need to make it absolutely STUNNING. You also need to evaluate the style and make sure it reflects what buyers want today. If the kitchen is avocado green with busy stencil borders, you definitely want to invest in a new paint job. Many buyers want a sleek kitchen design. White cabinets, granite countertops, and new stainless steel appliances are staples to a successful rehab.
Make sure the cabinets match well with the countertops and appliances. If the flooring is outdated or has a pattern reminiscent of the 1970s, you definitely want to invest in new flooring.
Potential buyers will want to check the bathrooms. Check the style of the bathroom and make sure it reflects current. Replace any damaged vanities, commodes, and tubs. A beautiful bathroom can persuade a buyer to get the property under contract right away.
If the bathroom needs a new paint job, be sure it matches the beautiful porcelain. Also, take a look at the tile floors and make sure they match and are pleasing to the eye. The worst thing you can do is execute a gorgeous renovation on a bathroom and completely forget the grimy, aged tiles with clashing floral patterns.
If you plan on renting out your property, you can get away with not replacing the appliances. However, if you plan to fix & flip it, you need to replace the kitchen appliances. Trust and believe you’ll make your money back in the quick resale.
Also, be sure to get rid of any old or outdated fixtures. These are minor costs that can afford a little wiggle room. Updating the light fixtures can really upgrade a room and make it more desirable. Adding ceiling fans can also be a major selling point to the buyer with an eye for economy. You will also want to check the locks on doors and windows to make sure they work and aren’t painted over.
Getting involved in fix & flips takes a keen eye and attention to detail. Take your time and inspect everything before starting your project or putting in an offer. You will be glad you did!
Are there areas I missed that you have tips for inspecting? Leave a comment and let me know.
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