Do You Want to Do a Rehab
Do You Want to Do a Rehab? Three Questions to Ask
Full transcript of video below.
Do You Want To Do A Rehab_ 3 Questions To Ask Yourself First!
Well, good morning. Real estate fans, Alice Lema here, broker John L. Scott here in beautiful Southern Oregon with another podcast regarding housing. And today we're going to be talking about rehab. Do I want to do a rehab? Some say no, some say yes. So if you're gonna think about doing a rehab three questions to ask yourself before you do a rehab.
[00:00:25] Okay. So the first question to ask is why, what is your why? And the why is very important. It's actually in my opinion, more important than the budget. And that's why it's first on my list. You've got to understand why you're doing this because that will actually help you make the budget. For example, if you're doing it for resale, then every single thing you do to the house has to profit. And it has to profit in a certain period of time.
[00:00:46] That's different from my elder is going to move in with me and I'm going to have to provide this kind of space versus I'm going to create some additional income producing space. So you got to ask yourself why, the first thing. And quite frankly, that why will hold you well when the hard times come. Because every rehabber will tell you, there's always a time when you thought, why am I doing this?
[00:01:15] So the why is super important. That's why I put it first. It'll help you get through the hard times. It'll also help you create a more realistic budget and it'll help you stick to it. Okay. So then the second is budget.That is the second thing. We want to have a budget that is realistic, but not overly padded. So a lot of people add 20% squish.
[00:01:34] In my experience. I, I've never, I rarely seen anybody needing that if, if we made our budget correctly from the beginning. But your budget, you do want at least 10, maybe 12% squish. This is just my opinion. Okay. You do what you want, but the budget also needs to be done in a way that it takes into consideration some places where we can cut costs and sometimes you can cut costs by having different kinds of materials.
[00:02:02] For example, Lumber's really expensive, right? So a lot of us are looking at other materials for fencing or for patio covers. So just be a little creative, you know, you can go online and look at alternative materials. That's a really fun thing to do in your downtime. That's what I do a lot of times with my weekends, because I'm just obsessed and, but I discover these different materials and I get these ideas about creating a fence or a gate out of something that's a lot less expensive. But it's also cool and functional. And would not be harmed later not harmed, but the value I'm not devaluing my property by doing something really unattractive or too, too creative for resell, because you want to keep that in mind too, if you're going to start using alternative materials. You don't want to affect your future resale. So budget yourself.
[00:02:52]Give yourself timelines in the budget. That's something people don't do. And then that is a way to lose money on a rehab. Is it takes too long. And, and you didn't put in your timeframes into your budget. And just a quick note, my favorite time to do the things is in the fall and in the winter. I can frequently negotiate a little bit better deal with the trade people because they know they're going to have a job in the winter.
[00:03:17] So having winter work is important to a lot of those people. So you can enter into a contract in the summer with the idea that the work's going to be done in the winter or fall.
[00:03:27] And I also learned over the years that a lot of those trade people have more time. So my stuff gets done more start to finish in a straight line without having them leave for several days. Or sometimes even weeks during their busy time, because they've got four or five other jobs going. So consider timelines as part of your budget process and give yourself a realistic amount. And do consider doing it at a time when in your area, the trade people are not so busy and ask for a little bit of a discount.
[00:03:59] You know, if you're going to be their winter work and they can bank on that, then you know, maybe they'll cut you a deal. So that's the second one is budget, but it also includes timelines. Okay.
[00:04:08] And then thirdly, I think you should consider cutting yourself some slack. So my third thing is patience and fortitude, and I know that sounds weird to put into a construction podcast, but it always seems like during every house construction project we have, there's a moment when we either wish we hadn't done it.
[00:04:31] Or we were wondering why we did it, or so many things have gone wrong or everything's costing more, taking longer. We can't move in. What blahblahblahblahblah. So item number three to think about is, do you have the fortitude. And do you have the patience to do this?
[00:04:48] Because a lot of people can have skills to manage and this and that and the other thing, or they can even do some of the work, but you gotta be able to cut yourself some slack, give yourself some patience, build into your week the time that's going to take to either manage the project or manage the person, managing the project.
[00:05:05]And that's not a joke. So you can't just like give it to somebody and walk away. I tried that it doesn't work. So don't. So item number three is, do you have the patience and do you have the fortitude to get through this and, and you got to consider the people around you too. That's the other sometimes mistake I make is I get really excited about all these projects and I am down for the hardship I'm down for living in the construction site.
[00:05:28] I'm down for living in the trailer or whatever. And I'm down for the delays, but not everybody around me. So if you are in a romantic partnerships or a family situation or you're taking on partners for this project consider, therefore to choose is their patience okay. Because there's nothing worse than having all these people get on your case, especially if it isn't like your fault, it's just the circumstances.
[00:05:54] You know, you just got to look at the situation ahead of time. And if you're going to have people in your circle or they're living with you, or they're married to you, or they're in partnership with you, how is it going to affect them? And are those really the people you want to know? Cause maybe you just go home and you don't talk about it.
[00:06:12] Okay. So that's number three is patience and fortitude. Okay. So let me know how this podcast is helping or not. Give me some comments, feel free to share it. Give me some likes. Let me know what you think. Give me a call, give me a text. I want to be your agent. I'm not just here to give my opinion every week on these videos, I'm here to do the work.
[00:06:32] I'm a great listing agent. I'm a great buyer's agent. Great investment agent. So let me know how I can help I'm around all weekend. My number is (541)301-7980 make it a beautiful weekend and we'll see you next week. Bye now.