Rehab a Lease Option Empire!

Find a shack, fix it up and sell it at a profit. It’s a good way to go if you’re handy and can do some of the repair work yourself. You’re building sweat equity. But even if you don’t know a drill from a circular saw, you can still invest in rundown properties, pay a contractor to make repairs and sell at a profit. Happens everyday.

The key is to find the right property – not always an easy thing to do. These houses usually have a story to tell and not a good one. Look for the smallest, worst house in a good or up-and-coming neighborhood. Also, prepare a budget and stick to it. You won’t be living there so if it’s a choice between wall sconces at $100 each versus sconces at $29 apiece, go with the lower cost lighting.

Also, expect the unexpected. Of course you’ll have the home inspected. The lender will probably insist on it. But even the best home inspector can’t see through walls so you may encounter some unexpected repairs. You can almost bet on it.
So, as in the example above, set aside part of your budget for the unexpected repairs, permit fees, the slower-than-expected pace of repairs and so on.

One more thing about rehabbing: The longer you own it the more it costs you. The object is to close on the property, have the work crew lined up to start the next day and finish all fix-its as quickly as possible. Remember, every month you own that house you’re making a mortgage payment and those payments will quickly nibble away your profit on the sale of the house. Buy it, fix it, sell it. That’s the idea.