Case Study: Flipping Small Spaces | Our Condo Rehab
Hi everybody! Melissa here again, with another rehabbed property. In this article, we're going to be talking about my rehab punch list for one of our properties, and how to make sure your properties are ready for the market.
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Breaking Down Prices Before the Rehab Punch List
This property was bought for $130,000, which was kind of amazing considering just how big this house is. We don't typically do houses this large. In the end, we only ended up spending about $23,000 on the rehab.
This two-story, 5 bedrooms, huge lot was definitely larger than we normally do. The rehab itself really wasn't too difficult. The house was in pretty good shape and just needed some updating, as far as the inside went.
However, the roof needed to be replaced because of some significant structural issues. There was a big hole in the roof on the outside near the back of the house, and a hole on the brick wall facing the side yard. That definitely needed to be patched and fixed.
Other than that, the house was in pretty great shape. We cleaned up the front yard and the trees that overhung to the roof. There was a really nice deck in the backyard that was in good shape. All we had to do with that was sand it down and give it a new coat of paint. Typically, we like to leave decks if they're of good quality.
Then, on the inside of the house, we updated a lot of what was already there. The countertops are replaced with the granite that we like to up in our houses, and we always make sure to replace all of the old floors with our signature wood vinyl and new carpet in the bedrooms. We repainted the walls in a nice neutral grey color, to keep the house clean looking.
After the floors and walls were updated, the appliances needed to be changed out. The shower heads were old, as well as the sinks in the bathrooms, so they needed to be replaced. If the kitchen appliances are in good shape, there's no need to replace them (that's just extra expenses). Just like the cabinets, if you can fix it up with a new coat of paint then there's no point in spending the money to get them replaced. We talk about this a lot in the FlippingJunkie Group on Facebook. If you're interested in being a part of our conversations, join the group here!
The Rehab Punch List Process
Personally, I like to start with the outside of the house when I got through my rehab punch list. That way, I make sure the big items that would be covered in an inspection have been taken care of. I have a few tools I like to use when I go through a rehab punch list such as my blue tape bracelet, handy-dandy note pad, and a pen.
However, the most important tool I have with me during a rehab punch list is my cell phone. I can not tell you how many times that phone has come in handy. My contractor is on call 24/7, so when I do these punch lists I'm able to reach out to him with any questions I have about the property. Especially when you're getting a house ready to go back on the market, you always want to make sure your repairs got done. If they didn't get done the way you had planned, call your contractor and find out why!
Going back to the rehab punch lists process, I also bring the scope of work with me. I do this so that I can double check that all of the items on that list got completed during the demo. The key when you're doing a rehab punch list is to go slowly, you definitely don't want to miss anything important. Having your scope of work list with you will guarantee that you revisit those items, but more importantly, you want to keep an eye out for any little things that might have gone unnoticed the first time.
For example, during the demo process, it's inevitable that things are going to get bumped, scraped, chipped, or installed incorrectly. There have been so many times where I go back to do a rehab punch list and find outlets are installed upside-down. It's things like that that can go unnoticed if you don't take your time with the punch list.
What I Look For
It really comes down to the details. When I'm doing a rehab punch list I inspect everything from the texture on the walls, to if the paint has an even coat. Then, beyond the obvious cosmetic issues, I look at the elements that are going to be covered when the house gets inspected.
Important aspects of a house that are looked at during an inspection are:
- Trees rubbing against the roof
- The water heater raised 18 inches off the floor
- Weather strips on the doors and windows
- Hand railing on staircases (both inside and outside)
There are a lot of little things as far as safety goes that can be overlooked. Especially when you have something like a deck at one of your properties, you always want to make sure there's no structural damage. For instance, this house had that great big deck in the back yard, but it was a two story deck. Not only did we have to make sure the stairs on the deck were safe, with the appropriate hand railing, but we also needed to double check the safety of the railings and banisters were safe on the top section of the deck.
Always, always, always make sure your doors are sealed. That's such an easy thing to fix, and just as easy to overlook. You never want to miss the weather stripping on your doors. A good way to tell if a door needs a new seal is just to close it from the inside and see if there's any light showing through from the outside. If there is, then you're going to have to replace it.
The same goes for your windows. In fact, we had a house where we upgraded the windows to ones that open from side to side but were installed opening up and down. Always make sure your new additions to the house are installed correctly!
Speaking of doors and inspections, a lot of times an inspector will look for a fire rated garage door. This goes back into that bit about safety we were talking about. If your area doesn't require fire rated garage doors, or if you don't know, it's still worthwhile to make sure you get one installed. It doesn't take long, and it doesn't cost much. At the end of the day, the safety of your house is the most important thing to have.
Besides safety, there are other big things to look out for when you're doing a rehab punch list. The things I keep an eye out for are:
- Leaky sinks
- Making sure all the lights turn on
- Clogged drains
- Making sure the showers and bathtubs turn on
- Nothing blocking the garbage disposal
- Double checking the dishwasher
Rehab Punch List Wrap Up
Now you know what I look for in our rehab punch lists. The most important thing I look for when I'm double checking my properties to get them ready for the market is everything that will be looked at in an inspection. As long as your properties meet inspection standards, you'll be ok.
The next thing I look for is the quality of my rehabs. If I removed a wall, or added a wall, or did any major repairs like that I always double check to make sure they came out the way I wanted.
When you do a rehab punch list, what do you look for? Let us know in the comments! We love to hear about what your real estate investing businesses are up to.
Liked this article? Check out the video we made of this house flipping scope of work on our YouTube channel!
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