The Avid Rehabber Diamond In The Rough
Posted By: John Boyer
In: The Avid Rehabber
Date: Thu, Jul 20th 2017 11:28 am
What does this mean to a rehabber and what do we look for? The meaning of diamond in the rough is something that has exceptional hidden characteristics and future potential, but currently lacks the final touches that would make it stand out from the crowd. Let’s explore some of the things we at J and C Homes look for when it comes to isolating a property that would fit our Business model. Keep in mind that we always have our ARV, exit strategies and rehab costs absolutely researched. As follows are some of the types of properties we would consider:
- A property that is grown over but the roof appears to be sound this is a first step to feeling good that we will not have a mold issue. Inside is dated but sound with no major structural issues. The foundation does not appear to have shifted and house has no cracks in the exterior or interior.
- We find a property that has been abused meaning doors, walls, and windows are broken or full of holes, when we rehab there will be new paint, windows, flooring and appliances so these issues will be estimated when preparing the repair costs for ARV.
- How about properties that are in an undesirable section of town that we call war zones. We still may consider them if the purchase price is right but it certainly takes one of our exit strategies, buy hold, out of the equation.
- How about high end properties? They are a little tricky but can have big returns let’s say for example we find a South of Broad property with an additional building (carriage house). This situation will take a lot of research to see if the additional building can be renovated and separated from the main dwelling by a master deed setting up a horizontal property regime for permitting. The ARV in this case will now be calculated on two properties but high end Luxury houses have a very limited market so the hold time will be much longer than most median priced homes.
Look at the following pictures noting the mold. Would we consider purchasing this property? We placed an offer and got owner ratification but was a short sale. After a month of rain and no word from the bank we withdrew the offer knowing the mold issue would now take extensive remediation. We always have in our offers a due diligence clause. If your house is a diamond in the rough and you are having trouble fixing it for any reason we will buy it for cash and close on your time line. Call 615-545-6638