Tips On Re-Habbing Homes In Orlando

Buying Homes In Orlando

When you buy an Orlando investment property that you intend to fix and flip, there are three different ways it can go. You either make a nice profit, you break even or you lose money.

Obviously, no one wants to lose money or break even because breaking even is also a loss when you consider the time and effort you spent on the project that you didn’t get compensated for.

Being an Orlando real estate agent as well as a seasoned investor, I’ve made every mistake you can possibly make by flipping homes in Orlando while learning some very valuable information along the way.  I’ve come up with some guidelines designed to help you decide if rehabbing houses is for you.

Buying The Right Property

It’s crucial that you start by buying the investment property at the right price. If you get this part wrong everything else will go wrong and you will lose money.

1st-time investors are sometimes soo excited about starting a project, that they end up paying too much money for a house or trying to turn a “non-deal” into a deal. I don’t care how much you wish and pray, there’s no arguing with the numbers.

I highly recommend enlisting the help of an experienced Orlando Realtor to help you acquire the right house.

Be Realistic With Yourself

For the do-it-yourselfers… make sure that you have the time, the skills, and the burning desire to get it done ASAP. People get pretty fired up watching these house flipping shows on TV, especially when they make it look soo fast and easy.  The truth is… it’s not that easy, it takes a lot longer than you think, and believing that it’s easy can get you in some serious hot water.

I’ve learned over the years that when you try to cut corners or go too cheap, it always ends up costing more money…ALWAYS!

 Even if you do intend to fix the property on your own, you should still get a few contractor estimates as a backup plan so that you know how much the repair will cost in case you happen to fall short with your own efforts.

 Time Is Money

Many newbie investors fail to calculate how much time a project will take correctly. The old saying “time is money” applies to rehabbing houses more than anything else I can think of. Your goal should be to get that property back on the market ASAP. If not, carrying costs alone will drain your profits dry and you’ll be lucky if you break even.

 Cost Of Repairs Or Materials

If you plan on having a professional contractor do the work, make sure that you meet and get estimates from at least 3 different contractors. Make sure they are licensed and insured [don’t take their word for it, research yourself] and ask them to provide you with references from some of their other clients.

If you’re still hell-bent on doing the work your self then your homework [no pun intended] is to seek out and price the material you will need to complete the project.

Whether you’ve decided on using a GC or doing the work yourself, add 15% to whatever you came up with for unforeseen problems.

Note: There are ALWAYS unforeseen problems!







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Summer Home: How to Keep Your Property Protected

Summer homes are fantastic getaways while you’re using them, but they can be a constant source of anxiety and expense when you aren’t. Any number of little problems can turn into very big ones if you aren’t there to catch them, so being able to protect your vacation property is of paramount importance.

Protect Your Property from Thieves

One of the biggest concerns for vacation homeowners is protecting their properties from burglars and vandals. In this case, a security system can be a smart investment. It’s also helpful to choose a vacation property that is near-permanent residents, with a neighborhood watch program, or in a vacation community with its own security. While it might be tempting to choose a vacation home that lets you get away from it all, it also means it’ll take longer for police or security to respond to an emergency.

Protect Your Property from Fires

Fires are absolutely devastating, but they can often be prevented. Unplug appliances that won’t be in use while you’re away. Turn off energy vampires like water heaters, and you’ll even save money on your electric bill. Lastly, make sure that your furnaces or other heaters are properly serviced and maintained. Just because a heater is only used during vacation, doesn’t mean that it’s okay to neglect it; even underused furnaces need some love to keep them operating safely and efficiently.

Protect Your Property from Floods

Many people associate flooding with beach, or lake-front vacation homes, but they aren’t the only victims. Any area with below-freezing temperatures can suffer from leaking or burst pipes. Tree roots can also damage pipes and lead to leaks, blockages, and flooding. Don’t set yourself up for a nasty surprise– turn off the main water supply to the house before you leave to return to your regular home, and have a good plumber to call in case of emergencies.

You can’t foresee every emergency, but many of the worst ones are preventable. A good security system can prevent break-ins. If your vacation home is in Orlando, AC repair companies in Orlando can help keep your heating system safe and running smoothly all year round. Orlando service companies can help you keep your vacation home dry and your water flowing. By properly closing up your vacation home at the end of the season, and knowing who to call when things go wrong, you’ll be able to keep your vacation home problem-free.

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Orlando Foreclosure Discounts Shrinking

Orlando Foreclosure properties just aren’t the bargains that they used to be. In August of 2009, the average discount on a foreclosed home was about 24%. As of September of this year, it’s now down to about 7% compared to what a home buyer would’ve paid for the same property in a conventional transaction.

Orlando, which is one of the cities that was hit the hardest by the foreclosure crisis has such a strong demand right now for properties that the discounts are pretty much gone unless the house is in need of major renovations. Our company specializes in Orlando short sales and I can tell you that just about every one of our listings receives multiple offers for the listing price or above.  It’s extremely rare these days that we get an offer that’s lower than the listing price because buyers know that it’s a very competitive market right now. As a matter of fact, about half of our properties end up selling for over the listing price.

Regular homebuyers [not investors] are the main reason for the increased demand for Orlando real estate. Everyone wants to take advantage of the historic affordability, which means the combination between lower home prices and great mortgage rates. This doesn’t mean that you still can’t get a good deal in Orlando, but be prepared to submit multiple offers on multiple properties. It’s because of this that it’s much more work to be a buyer’s agent where you have to show multiple homes and submit multiple offers before you find what your buyer is looking for. It’s very common these days to go see a house that has been listed for less than 24 hours and find out that the home already has multiple offers on it.

Orlando Re-Habbers Still Turning a Profit

The average home buyer wants nothing to do with remodeling a home after they’ve purchased it. This is why there’s soo much competition for Orlando homes that are move-in ready. However, for the home buyer that is willing to roll up his or her sleeves and dive into some major home repairs, there’s still a profit to be made. There are some lenders that will complete the renovations on their own foreclosed properties before putting them back on the market, but most of the time they just want to sell them as-is.

Homes that are in need of repairs can still be good investment opportunities if you know what you’re doing. Using an experienced Orlando realtor to help with your search is highly recommended. It’s also important to know what repairs need to happen and how much the repairs will cost before you commit to buying a fixer-upper. Although profit margins are quite a bit smaller than they were a few years ago, a full-time rehabber can still make a decent living from flipping houses.





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Tips for Estimating Repairs on Orlando Investment Properties

Have you ever bought a car without first finding out how much the monthly payment will be or how much it will cost to insure it? Of course not, that would be crazy and irresponsible. You would first find out how much everything will cost to determine if you can afford it or not.  The same thing holds true when you’re talking about buying Orlando investment properties. When you buy a house with the intention of selling it for a profit, it’s crucial that you get the numbers right from the very start or you could end up losing money.

Know the difference between Cosmetic Repairs and Structural Repairs

Just about anyone can recognize when a house needs a paint job, new carpet, or maybe even some minor carpentry repairs. These items are considered cosmetic repairs and can usually be completed with a few thousand bucks depending on the size of the house.  In some instances, you may even want to do some upgrading such as new kitchen cabinets or replacing fixtures, etc. I consider these items to be cosmetic repairs as well though they will be a bit more costly. However,  it’s very important to know if the house you’re about to purchase has any major structural issues with it.

Structural damages to a house can be a game-changer and most of the time will turn a deal into a non-deal depending on the extent of the damage and much it will be to make the necessary repairs. Unless you are a seasoned investor, I would highly recommend that you steer clear of any houses in need of major repairs.  

Some examples of major repairs are as follows:

Updating the Electrical system– Houses that are older [30+] will sometimes need to have the electrical system brought up to code. This can sometimes mean that the whole electrical system will need replacing or rewiring.

Rotten Plumbing – Having corroded or rotted plumbing has the potential to be a rehabber’s nightmare. Plumbing runs through the walls as well as the foundation and leaky pipes can easily cause severe damage over time.

Dry rot and termites-  This can be another major problem to the structure of a house, especially if it’s an older home. There are rafters in the attic as well as studs in the walls that are made of wood and if there is evidence of termites or dry rot, you may be looking at replacing most of it which mean a lot of demolition in addition to replacing the rotted wood.

All of the above-mentioned repairs can cost a lot of money. Also, it can be risky because most of the time you won’t know the extent of the repairs until you start the project and know exactly what you’re dealing with. As an experienced rehabber myself, I’ve seen what I thought was going to be a $5,000.00 repair turn into a $15,000.00.

Keep it Simple

Remember that your goal is to resell the house for a profit. That means that you need to get a good enough deal so that you can do all the repairs and get it sold quickly. My advice to any investor experienced or not is to stay away from homes in need of major repairs. If you have to repair to many things, not only will you end up spending too much money, but it will also take longer to get the house ready to put on the market. Like that old saying goes “Time is money” and another month or 2 of carrying costs while your house gets repaired can mean thousands out of your pocket.

Follow this simple formula when looking at investment properties

1-Enlist the help of an experienced Orlando Realtor in the area you wish to buy-in.

2- Determine the value of the home after repairs. Always expect your house to sell for less than the lowest comp in the area.

3- Determine how much you will spend on making repairs then add on another few thousand to it to be safe.  You should also add your projected carrying costs to the budget.

4- Price the house correctly from the start, too many people make the mistake of pricing the house too high and it ends up sitting in the market for several months and they ultimately end up lowering the price anyway.  This is where a good Orlando realtor can help you tremendously.

By following these basic guidelines, you will have a much better chance of making a profit once the house is ready to be put on the Orlando real estate market.

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Choosing the right Orlando neighborhood for Re-habbing a House

Which type of Orlando neighborhood is best for rehabbing a house?

When you’re looking for an investment home that you intend to flip for a profit you should know that choosing the right location is just as important as choosing the right home. Although it’s true that there are buyers for just about any area in Orlando, certain areas are more desirable than others making it easier on the investor.

Qualities to look for

When considering the neighborhood for a flip, there are some statistics that you should research about the area.

* Make sure that recent sales in the area are homes that sold quickly.

* Ensure that the neighborhood is mostly owner-occupied and not a mostly rental community.

* Homes in the area have maintained their values or even better, they are going up in value.

* Not many houses for sale in the area, too many houses for sale is never a good sign and creates competition for your house when it’s time to sell.

* Be aware that older homes will need much more work to get ready for the market.

 Try Keeping it Close to Home

When you make the commitment to re-hab a house you should know that even if you hire a general contractor to do all the work you will still be making frequent visits to the property. By rehabbing a property in your own area, not only will you have less driving time to get to the property but you’re probably already a bit about the area making your research easier.

However, the area must still be holding its value or going up or it just won’t make sense. A neighborhood that has falling property values because of crime, new highway construction, etc. is never a good choice no matter how close it is to your house.

 Hire an experienced Orlando Realtor

 By utilizing the skills and expertise of an experienced Orlando realtor to find your investment home, you can cut out a lot of the legwork. Realtors not only have access to the MLS but they are also able to provide you with the facts that you need about the area to make the right decision. A good realtor will be familiar with the area as well as the houses thus being able to give you valuable advice that will ultimately translate to more dollars in your pocket when it’s time to sell.

It’s also a good idea to list the property once you’ve finished the repairs. Listing the property with a realtor will give your property maximum exposure to buyers that are currently searching in the area. It’s always a good idea to interview several Orlando realtors before making your decision on which one is the best fit for you.



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