There are times when we are going to purchase a short sale and then rehab the property for a higher profit. During the rehab on the property, I take my partners shopping. We go to Home Depot and look at all the items I normally put in my cookie cutter houses and I show them why I have chosen each and every product. Then they get to pick their own products and we discuss the price differences to analyze the affect on our profit. It is really fun shopping for an entire house in Home Depot, but the bottom line to save money. After our trip to Home Depot, we will head over to the cabinet shop if it is a higher end property and we will pick the cabinets and handles. Then we are off to the granite company with a piece of floor tile and a cabinet door so that we can match our granite throughout the house. I call this program my Mentor Program as I bring everything I have learned and down through my Real Estate Junkie course to my students. By the time we are done, it’s been a “power-shoppin’ day!”
I always recommend that you have a Pro Account at Home Depot which gives me an automatic 10% off everything and if you are a member of a REIA group, you can save another 2% so … working with me already has saved you the cost of a new kitchen on the rehab or more.
From there, I ask that all my items be placed through the bid room at Home Depot and see how much of a discount that I receive. They always have to adjust my bill based on the high volume of business I do with them. I get a quote from the cabinet and granite companies and forward all these bills to my students and we discuss the costs. This way they are educated on costs. In addition, if electrical or roofing is necessary, the student is required to provide me with 3 bids and then we call the contractors on the telephone and ask them “is this best you can do?” I normally get them to drop their prices again!
The main point of partnering with individuals is that most of the time my butt is in the seat and their feet are on the street. Their job is to check the house daily and make sure everything is in order. Recently, Aisha went to a house to receive the appliances, which isn’t always necessary, the water heater had given out and was leaking in the garage. This is a common problem with water heaters so…..Guys and Gals be aware! Always walk through the entire house each time you visit.
The worse thing that has ever happened was when Janeil went to show our house in Ocala to a new buyer and saw water running out of the garage. Of course, my first thought was the water heater; however, I was wrong. As she moved throughout the house and made it up to the 2nd floor bathroom, there was a tub that was deliberately plugged and turned on. It was overflowing from the bathroom, onto the new carpet in the hallway and heading to the bedroom. Thank God there was a knott in the floor board that served as a hole that had all the water go into the garage ceiling. She called me very upset. I told her lock up the house and tell the new buyers you can’t show it because there is no key. Well…. The buyer found the glass sliding door open and he walked in and unlocked the door for them. What a surprise to Janeil because she thought it was all locked up. She continued to show the house and I immediately called Stanley Carpet Cleaner who charged $1,200 to clean the carpets, throw the pad away, and use 3 HUGE dehumidifiers to take the moisture out of the air. The heat had to be turned on to 90 degrees, it was HOT!!! I immediately left the office and headed out there with my 2 huge warehouse fans to help dry out everything.
I arrived in time for Stanley Carpet Cleaner, but wasn’t fast enough to see if we could save the padding by having them extract the water out of them. I made them attempt to do this outside and the pad fell apart into tiny pieces. As we waited for them to return with their equipment, I started tearing down the drywall and the insulation in the garage. About half of the ceiling was damaged and the cost for repair and replacement was $2,000.
Lesson #1: Always go inside your house and check every door and window and make sure that no one has left the doors or windows unlocked so they can return later. Don’t ever assume that all Realtors or Contractors will lock up your houses. I often drive off and get 5 minutes away but go back to double check myself that I scrambled the code on the lockbox. This is very important.
Lesson #2: Change your actual lockbox code once all contractors are out and your supplies have been delivered, so that nothing comes up missing (I haven’t had this experience, but I don’t want to, nor do I want this for you!).
Lesson #3: Never show a house unless it is complete because 60% of people think through visual processing. If something is incomplete and most people cannot envision a complete home, then you have now lost your Buyer. First Impression Is Everything!
Even though this Article states “Rehab Can Be a Jungle,” I can honestly tell you we bought the property at the right price so we will just take a little less profit. I cannot stress enough the importance of buying low, so events like this don’t have a great impact on your profit.
Stay tuned for the profit numbers on these deals! I hope to see you either at my training at my office or you can go on-line and order the 3 Day Live Event that you can download to get the real facts about shorts and rehabs. Always remember, “having a Mentor walk you through it and hold your hand will stop you from freaking out” and that is a direct quote from Janeil!
The Rehab Jungle can be just as much fun as swinging from the vines as long as you know what you are doing. Even if you have a few blips, when you buy low, there is always room to profit BIG no matter what! Please continue sending me your questions and topics that are most helpful for me to write to you about. Your Success is important to me, so let me know how I can help!!!
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Kimberlee Frank Broker Short Sale Expert
Kimberlee Frank is known as “The Real Estate Junkie,” for her unique ability to find ways to creatively help buyers and sellers no matter which direction the real estate market is heading. Kimberlee had already worked as a legal administrator for an Attorney, Builder and Broker for 18 years when she began her Real Estate career in 1998. She dotted the i’s and crossed the t’s on hundreds of real estate transactions and thousands of documents, making her an expert in real estate documentation. Kimberlee’s success began in Fenton, Michigan. She specialized in selling, purchasing, renovating, retailing and lease optioning single-family homes. She has helped many sellers get rid of their “headaches” and helped many buyers find their dream homes!
Since 2003, she has specialized in foreclosures and short sales. After realizing how many families were being forced out of their homes due to financial difficulties, Kimberlee had a heartfelt obligation to use her experience to help those families. She has mitigated and closed over 500 short sales with the mortgage companies, saving Sellers from going into foreclosure. In 2006, Kimberlee and her family moved to Florida. She lives in Oviedo and her Sell Fast Realty Office is in Winter Springs, serving residential and commercial sellers and buyers in multiple counties in Central and Southern Florida.
Kimberlee is also a Trainer and Mentor and has created several different “How To” systems on real estate. Her unique strategies continue to educate real estate professionals across the country. If you have a proven system to help others out of hardship, why wouldn’t you duplicate it and share it with as many people as you can? Kimberlee continues to work with this philosophy!
Kimberlee Frank has been featured on ABC, NBC, FOX, CBS as well as Wall Street Journal, Newsweek, USA Today and numerous other publications. She is the bestselling author of “Big Ideas for Your Business” (Advantage Media 2009). She was also selected as the #1 Short Sale Expert by America’s Premiers Experts.
Please contact Kimberlee at her office at 407-888-3433 to schedule a Free Facts About Foreclosure Seminar. She has numerous testimonials from sellers, buyers and other real estate professionals who are familiar with her giving heart. Whether it is 1 person in need or 1,000…..Kimberlee will educate them on real estate and give them a solution with a peace of mind!
Are you unsure what to do with your house? Do you need to educate yourself about your options. Click the following link Free Facts About Foreclosure for more information.
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