In real estate investing there is one major expense that eats the most money in a rehab project--the cost of holding the property vacant. This cost goes up directly with the length of time the property is vacant.
The key to successful rehab is quick turnover. You do not have time to do the work yourself. You do not have time to wait for any one person to do the work. It needs to be done as soon as the property becomes available, and as quickly as possible.
Most properties needing work will not sell or rent for the maximum amount unless they are clean. It is a rare buyer or tenant who can visualize the potential and will count on you doing the work that you say you are planning to do.
So in most instances, you must get the work done before putting the property on the market, and this means it must be done fast.
This usually means getting it done by a professional. Pros take far less time to do the job. They also should have the right tools, and should do it right the first time without needing six trips to the hardware store.
For many jobs, such as painting, drywalling and general cleanup, the professional is likely to have help. This will speed the work. And the pro will have liability insurance and workman's compensation, so that damage to your property or injury to his workers will not be your expense as they may be with your handyman or your friends.
And the pro may even offer you a guarantee that you won't have problems for the first so many months.
Here's a typical case study: Ben Beginner decides that the nice little three-bedroom home he has bought needs interior painting before he puts it on the market for rent. He has helped his dad paint the family home once, so he knows how to paint.
Ben is just starting to invest and has a full-time job, but he figures he can start tomorrow after work. If he paints every night this week, he will have put in four hours an evening. If he gets his buddy to help him next weekend they should be able to finish it up.
Ben hurries home from work the first night, wolfs down dinner and goes to the paint store. He buys a roller, a roller tray, a roller tray liner, a drop cloth, a stepladder, a brush and, of course, some paint.
He gets over to the rental home and discovers that there are holes that need patching and dirt that really should be washed off before he starts. He also will need a screwdriver to take off the outlet covers and the vent covers.
Back to the paint store. He buys spackle, a sponge, a sanding sponge and TSP. The screwdriver will have to wait until tomorrow as he has one at home.
He gets back to the rental house for the second time at 8:30 p.m. He takes nails out of the walls and does the spackling, and then starts washing down his first wall. By 10:30 he is getting tired, so he heads home.
Day 2: Ben again hurries home from work, wolfs down dinner and scurries over to the rental home. He washes some more walls and then decides that it is time to get started painting. Tonight he remembered the screwdriver, so he starts painting the first room.
Things go pretty well until he gets to the trim around the windows. He starts to think that maybe he should have bought one of those edgers, or some of that edging tape. Back to the paint store he goes. When he gets back to the house it is 10 p.m. and time to start cleaning up the roller and paint brush. He'll finish this room tomorrow.
Day 3: At work today, Ben's boss comments on how tired he looks. He also wonders when Ben is going to get the project finished that was due yesterday. Ben is tired, but decides that he better stay late and get it done. He calls home to let his wife know he will be late, and she asks if he can pick up Ben Jr. at his friends on his way home.
By the time Ben gets home it is 8:30 p.m. It is too late to go to the rental house. He goes to bed early, since he is exhausted.
Day 4: Ben hurries home from work again today. He is refreshed by yesterday's break. Tonight he gets over to the rental by 7:30 p.m., and starts right into the taping and then painting. He finishes up the first room. With good momentum going he gets the next room started. By the time he leaves for home he has finished the walls and ceiling in the second room. He still has the trim to do, but he's feeling great.
Day 5: Ben has been getting some grief at home for never being there. He decides that he'd better take the family out to eat tonight. They lobby for a movie too, and he finally gives up on painting tonight.
Day 6: Saturday. Ben's friend Dave is going to help. Dave won't be ready to go until 9 a.m.--after all it is Saturday. Ben and Dave make it to the rental house by 9:30. After Dave gets the tour of the house, and the economic explanations, they get to work. They make pretty good progress getting the trim in the second room finished and the third room painted by noon.