July 2021

ELEVATION Sell My House Fast Denver

You Found a Deal…Now What?

We’ve cleared what some say is the largest hurdle and found a deal but properly estimating the rehab budget is key to determining if the property is truly a  good deal. These next three monthly articles will detail how to best determine a rehab budget. Our goal is to inspect a property in 60 minutes on average and be within 95% accuracy when determining the budget so you can make a decision on the spot if moving forward makes sense for your investment guidelines. 

  • MAJOR SYSTEMS: The ELEVATION Rehab budget estimator is a two sheet document which helps investors take a systematic approach to rehab estimation. Your #1 step in determining a proper rehab budget is to focus on the six major systems of a property as they can total 60%+ of your budget. These systems are:
    • Structural Components- Are there cracks in the foundation wall(s) on the exterior or interior of the home? Does the property have sloping/uneven/heaving floors or bowing walls? A good structural engineer is well worth the $300-$500 for a professional opinion and recommendations on how your experienced contractor can repair the potential problems. 

Now What? Cracks in the Foundation

    • Sewer Line- Always hire a plumber or sewer scope company to camera the line and provide a video and written report. Repairs can range from simple spot repairs to whole line replacement. The property sewer line can also be an independent repair from the connection to the City main line via a tap connection.

Now What? Cracks in Sewer Line

    • Roof Only one layer of shingles are permitted on a property and you want to look for sagging roof lines, significant shingle damage, old vents and flashing problems along with possible skylight leaking evidence. 

Now What? Roof

    • Windows- Older aluminum single pane windows typically need to be replaced in order to achieve maximum After Repair Value (ARV). Installing new double pane windows which are white (or color for higher end properties) vinyl in construction with new screens are ideal to help with energy efficiency and curb appeal. Adding a window of egress to a basement bedroom adds a tremendous amount of value.

Now What? Window

    • HVAC- A new furnace, boiler, AC unit and hot water heater are also major systems which contribute to the best sales price after replacement. When finishing a basement you’ll also want to include new duct work, electrical, and plumbing in your budget. Tankless hot water heaters can be a great way to save on space in smaller properties and help push resale value.

Now What? HVAC

    • Electrical Panel- Two dangerous brands of panels are Federal Pacific and Stab-Loc which are fire hazards and can crush a sale. Installing a new panel benefits buyers from a safety and utility perspective.

Now What? Electrical Panel

KEY TAKEAWAYS

It’s tempting to start your property inspection when you walk in the door or envisioning your buyer’s dream kitchen but when systems can make or  break a deal, it’s key to properly budget for the best ROI and address the more expensive areas for potential buyers. 

Derek Marlin, CEO

ELEVATION

720-545-0490

Derek@ElevationInvest.com

ElevationInvest.com