One major attraction of real estate investment is the ability it has to generate cashflow in a good amount of time. One of the more popular areas of real estate investing is that of rehabbing properties, which involves fixing up rundown homes and putting them back on the market with added value. Effective rehab starts when you know how to accurately evaluate the value of a real estate after, as well as before, you begin rehabbing the property. Some investors tend to overestimate the value of the property following its modifications. Others simply underestimate the prices or time required in selling the rehab property. The longer you hold on to a flip property, the more expensive it gets for you as the investor as you begin to make the payments on the property as well as taking care of all the needed items as part of the rehab.
Utilize lower price values, exaggerate repair costs, and think that the job will finish longer as you expected. When your detailed examination is based from these three assumptions and the deal still appears reasonable, then it is likely that the deal could very well work for you.
Be sure to keep the end in mind. Think of your potential buyers, and who they could end up being. Who are you targeting? Ideal rehab properties are in locations where homeowners are seeking to purchase, which will help you in securing a buyer.