5 Lessons Learned from Rehabilitating Properties—by Robin Moffitt of Gold Star Realty

distressed homeIt’s a very profitable time to be involved in real estate, so think about modifying your business plan to include rehabilitation of properties for profit. I have been buying properties at 50 to 60% of their value and rehabbing them, which require a range of repairs from light cosmetic touch-ups to a complete remodel. I’ve managed to recreate my portfolio with significant growth in equity and cash flow. Throughout my experience rehabbing homes for resell, I’ve learned a few lessons I’d like to share with you:

  1. You can buy property at significant discounts without feeling guilty
  2. There is private money available to fund those with no credit
  3. You should not be greedy when you resell your property—I target 5 – 10% discounts on fair market value.
  4. Cash will start flowing—expect $150 – 500 per property on average. You’ll earn a guaranteed 12% with a couple of points up front on a property that has been completely rehabbed.

For realtors who were counting on their real estate portfolio for retirement and were hurt by the downturn in the housing market, this system will allow them to create cash flow and equity build up quickly.