The average abandoned & distressed property investor approaches the rehab and resale process the same way:
- They acquire a property
- They rehab the property
- They plant a “For Sale” sign in the front yard
- They sell the property
- They smile triumphantly at a job well-done
If you're following this model, you are quite possibly succeeding in real estate. Did you know that by shaking up the order you approach your rehab projects, you can dramatically increase the number of rehab projects you can complete in a year – and at the same time, can reach your goal of financial independence much more quickly?
While you can't do much about steps 1, 3 and 5, steps 2 and 4 can be reversed – which over the course of an investing career – could mean that you could earn millions more than an investor who follows the traditional model.
It's easier than you think…
The first thing you will want to do is plant a large “For Sale” sign in the front yard. While you want to ensure that your telephone number is on the sign, you can actually modify your sign and generate calls from potentially interested buyers and sellers.
Here's an example of language you could place on your sign that could potentially get your phone ringing off the hook:
3BR 2BA Currently Being Renovated
Call now and You Can Pick Paint Colors
Carpet Styles and More
Call Now! Priced to Sell
Before beginning the inside work, tidy up the outside of the property on which you are working. While you may think that the interior of the property is the most important part of a rehab project, I want to tell you that what happens on the outside can create instant curb appeal and can generate tremendous interest.
By creating curb appeal and generating interest, you can more quickly sell the property.
Here's a simple, easy-to-follow blueprint for success. Clean up the exterior and make it look as good as possible. What you do on the outside need not be extensive – or expensive. After placing a for sale sign in the front yard, decide what simple landscaping measures will maximize the property's curb appeal.
You'd be amazed by how much curb appeal a property can gain by simply cleaning up the yard, adding some wood chips around the trees in the front yard, and planting a few colorful bushes or shrubs in the front and on both sides of the house.
In addition, don't ignore the appearance of the house itself. If it has shutters, simply replacing them can instantly double a property's appeal – and can get people interested in seeing what changes you have in mind for the interior.
When tidying up the exterior of the house, you can touch up the paint on the wood trim and do other little things to give the house a fresh, welcoming look. There's an added benefit to doing things in this order: It is actually possible to sell the property before completing these exterior renovations.
Your “For Sale” sign – combined with the interest-generating landscaping and other improvements – will likely generate some calls from interested parties. When they call, you can offer to show the property to them as it is now. By giving them the opportunity to possibly pick out the color of carpet, paint, etc., you will generate tremendous interest because the average home buyer either makes minor changes immediately after buying a house or makes a mental note to make some changes not long after buying it.
This Strategy Can Be a Real Winner
Here's where this strategy can pay huge dividends. If a potential buyer gets to decide what color they want the carpet and paint to be, they will automatically have more interest in buying than they would if they wait until the renovations have already been made. If they like what they see, you can place the house under contract and you can collect an earnest money deposit, which you could use to help pay for renovations.
There's another possible way of selling before completing your rehab: Some buyers will ask if you would be willing to let them make the repairs themselves if you would be willing to sell at a discount. This is a great idea that will allow you to sell the property – and more quickly cash out of the property that you're getting ready to rehab.
Many buyers are handy around the house and are willing to put some sweat equity into the property, particularly if they think that they could save money. While you won't be able to sell every property you buy before completing your renovation work, it does happen fairly regularly. This will allow cash to flow more quickly into your bank account – and will allow you to more quickly move on to your next profitable investment.
If you like, you can continue waiting until your renovations have been completed before selling the property, but by following my model, you'll be able to buy more properties.
Always Keep the Long Term in Mind.
Over the course of a 20 or 30 year real estate investing career, this can mean that you could possibly buy and sell several more properties per year than you could otherwise.
Thinking outside the box and defying expected norms is just one way you can blast into increased real estate profitability. Another way is by continuing to learn additional real estate tips and tricks. That is how you can get that edge on the competition. Continuing to learn can quickly turn an ordinary investing career into a special one that makes you rich beyond your wildest dreams.