A real estate rehabber is simply any person or business entity that buys property to improve. Most likely the motive behind improving a property is financial gain, but there are many non-profit organizations whose mission statement it is to improve the homes of a given geographic region.
The traditional rehabber, the individual that buys homes to fix up and sell for a profit, is getting a lot of attention these days. With programs such as “Flip This House”, and “Property Ladder” flippers are getting lots of media exposure. As the programs state, “the rewards can be great”, but with great rewards usually comes great risk.
If you think flipping homes is something worth trying I suggest taking your time. Be aware that before any property purchase you should have already priced out labor, and materials costs, and have a realistic time line. I even have friends who price all these factors out, then add 20% to their costs and timetable. If after adding 20% the project will still make them money then they go ahead. I suggest this for first time flippers especially.
WAYS TO PROFIT
Most people believe that the way to profit from a flip is to sell the home once you’ve completed renovations. This is one option, but there are many more available. Remember the first rule of investing, YOU MAKE YOUR MONEY WHEN YOU BUY, NOT WHEN YOU SELL. By this I mean that you need to get a good deal from the start. Check comparable prices in the area and pay way below them.
Instead of selling the property after the renovation owners that choose not to sell the property can rent the property, refinance, continually improve the property and refinance, and do a rent to own sale. Each option has its benefits. For example, renting puts money in your pocket monthly. Rent to own sales are like renting, but with a large first months rent/down payment, and after a traditional mortgage length the rehabber looses title to the property if the tenants pay. Improvement and refinancing is basically cashing out equity in the property to free up cash to buy further investments.
A rehabber does not need to be a person or company that is motivated by money. There are hundreds of non-profit organizations in the United States that petition the government and raise private funds to help less fortunate people pay for home improvement projects. I own a replacement window company in Northeastern Ohio and know of at least 12 of these local organizations. If you are in need of home improvement do some research and try to find one of these organizations in your area. I hope you found this informative, and have a great day!