Suppose you are a real estate investor. Then you understand the process that goes into renovating a home. But if you are not and looking to understand exactly how things work. Then we will discuss with you more in detail what these investors do. If you ever drove down any major street in any major city, you will see we buy houses signs or sell my house fast posted on telephone poles. The people who put these signs up are real estate investors. What does it exactly mean to be a real estate investor? It is the process of purchasing a home that requires desperate work. Then taking that home and completely renovating it to make it livable and reselling it for profit. A lot goes into making a complete renovation on a home, and these investors dump tons of money into the house to make it livable again. Sometimes it may take upwards of $100,000 or more to make a complete renovation happen. We will give you the significant steps that these investors take to get in the job done.
What is the first move?
The first thing investor must do find the subject property. It can be challenging for them to do so, considering the market is very competitive. These investors spend a lot of time and money finding qualified homeowners to purchase their property. They don’t only use we buy houses signs to find potential homeowners. They may also use mailers, text messaging, and phone calls. Some more prominent companies will use Google ads or their website to attract motivated sellers. Once they grasp what they need a particular property at, they then begin to negotiate with the homeowner. Once a final number is agreed upon, they open on a title search. Then they schedule a day to make a settlement. Once the property is in their possession, they begin to work.
So there’s a process where the investor hires a company to come in and completely strip the home. It means to take apart any walls or existing parts of the house. Sometimes they may even remove the plumbing entirely as well as electrical. If they plan to update the electrical, they will need to rip out the old panel. Same thing with the plumbing and water lines. It will allow us to open up the house. And for them to begin a new layout or design. This process will usually take anywhere from 2 to 3 days to ultimately dump all the trash in the home. Once this is done, you’ll be able to see through the entire house from front to back.
Throwing up plans and having a scope of work
You need to think of the internal parts of the house that is the most important. You have to follow specific guidelines for installing new plumbing and electrical. Once you have somebody draw up where everything will go, they can begin to place things where needed. When the electrician comes in and runs wires through the home and sets up a new 200 amp panel or higher. Once this is done, the plumbers can do the groundwork, such as laying sewer line, putting PEX piping throughout, basically just roughing out the plumbing. Suppose you decide to do HVAC in the home. It is the time that they lay the ductwork. Since there are no walls or structures, it becomes straightforward for them to maneuver throughout the house. So the plumbing, electricians, and HVAC company all have the same freedom, making it easier for them to work.
Once all the rough plumbing and electrical are installed in the home. You can then get a contractor to come in and start hanging up walls. If the house is framed the way you like, it should be easy for the drywall guys to hang up each piece of sheetrock. Once that is done, everything will be closed in and look a little better. It will begin to start looking like a home. Once that is done, you can then have the flooring guys come in and start laying down the floors. Whether you’re doing tile or hardwood, this is when they step in. But they need to leave certain spots open for the plumbers and electricians to come back still and do what is required.
It is the best part; you can bring the plumbers and electricians. The electricians can start hanging lights, chandeliers, and ceiling fans. Whatever the home is designed to have as far as electrical is concerned. Then typically, if you find the right plumber is the plumber’s time to start putting in the faucets, toilets, and showers. Once that is done, the home will be almost complete. Then you have your painters come in and your flooring people to fill in any gaps that are left. As well as put up the baseboard surrounding the entire home. The painters will come in and finish up the job. They are painting every room in the house, typically white or a light color. At the same time, the kitchen and bathroom get put entirely together. If you decide to finish off a basement, it can be an additional plus to adding value. Finally, most people will frame out and carpet the cellar. Though it is not necessary for specific areas, it is a significant Plus.
The final phase
Once the property is completely renovated, it will become the last and final step of the whole renovation process. The latest and final step is speaking with a real estate agent to sell my house fast. Time would be of the essence here, especially if you were using a construction loan for the project. Once the agent puts the property on the market, the investor needs to have the home price accordingly so it will sell. The most crucial part is finding the right buyer to come in and buy the home. Once this is done, the investor will be responsible for closing costs and any other transfer tax associated with the sale. But this is when they begin to see their profit. Many investors out there want to get involved in the rehab process. It seems a lot simpler than it is. The truth is that it is a very long process that comes with many problems. That even the most experienced investors face on each project.
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