One of the biggest problems that buyers face when looking for rehab properties is not knowing what to look for. There are several factors that you need to take into account when searching for rehab properties, and if you’re not familiar with the process, it can be daunting.
Peter Ivantsov, a real estate investor and entrepreneur, knows a lot about rehab properties after accumulating years of experience in the real estate industry. Peter Ivantsov has been investing in Detroit real estate for years, and he’s seen firsthand what to look for (and what to avoid) when searching for rehab properties. In fact, Peter Ivantsov acquired and flipped more than 50 properties in the last 3 years in Detroit and had to rescue a private fund who had a portfolio of 100 single family homes that were poorly acquired and managed in 2020.
Detroit real estate is and will remain for quite some time an interesting market to find undervalued and ready to be rehabbed properties. Detroit was once one of the most prosperous cities in the United states. However, due to a variety of factors, the city has fallen on hard times in recent years. As a result, Detroit real estate prices have dropped significantly in 2008. This has presented a unique opportunity for investors looking to buy rehab properties. Today Detroit real estate is still relatively affordable compared to other states from a real estate investing perspective, and there is a lot of potential for growth in the coming years.
Here are some of the key factors that Peter Ivantsov recommends taking into account when searching for rehab properties in Detroit:
The first thing you need to consider when searching for rehab properties is the location. According to Peter Ivantsov, you want to make sure that the property is located in an area that is ripe for redevelopment. There are several factors to consider when determining whether or not a location is ideal for rehabbing, including:
- The current state of the real estate market in the area
- The potential for growth in the area
- The availability of resources (e.g., skilled contractors, materials, etc.) in the area
2. The condition of the property
Of course, you’ll also want to take into account the condition of the property itself. You’ll need to determine how much work needs to be done in order to bring the property up to your standards.
Rehabbing a home can be a costly and time-consuming process. One of the biggest costs you will incur is hidden damage. This can include issues such as black mold, foundation problems, and leaky pipes. These problems can be difficult to spot, but they can cause serious damage to your home and make it difficult to sell. If you are rehabbing a home, it is important to have it inspected by a professional. This will help you to identify any hidden damage so that you can repair it before it causes further damage. While hidden damage can be expensive to fix, it is worth the investment to avoid even more costly repairs in the future.
3. The price
Finally, you’ll need to consider the price of the property. You’ll want to make sure that you’re getting a good deal on the property, and that the potential profit from the sale is worth the investment.
For any real estate investor, one of the most important things to calculate before buying a property is the likely selling price. This ensures that when you eventually sell the property, it will be profitable. Peter Ivantsov believes that there are a number of factors that can affect the selling price of a property, such as its location, condition, and current market conditions. However, if you’re rehabbing a property, there’s one key factor that can have a big impact on the eventual selling price: your rehab budget. By carefully calculating the costs of your rehab project and leaving yourself a healthy margin, you can ensure that when you sell the property it will be at a price that makes you a good profit.
Peter Ivantsov reminds you to be wary of real estate investment scams where unscrupulous individuals may use false appraisals, deceptive advertising, and inflated pricing to lure investors into a deal that ultimately leaves them with a property worth much less than they paid for – such scams can cost you a fortune and the only way to avoid them is to do your research and consult with trusted professionals in the industry. Find a credible real estate broker if you are not sure about your CMA’s or a credible and trusted property manager, go to 3 different clients that they have and get feedback.
If you’re considering investing in a rehab property, be sure to keep these factors in mind. With a lot of research and due diligence, you can find a great property that will provide you with a good return on your investment. Interested in learning more about real estate investing? Be sure to check out Peter Ivantsov’s blog about how to impress clients in real estate. He shares a wealth of information on the topic, and can help you guide through the real estate investing journey.