Now that you have found the right property, made an offer and closed on your bargain Florida foreclosure property, the next step is to rehab the property and get it ready to either lease or sell. The best ways to use your rehab dollars are to follow the 1:3 rule that every dollar you spend, you will get $3.00 in return. Some repairs will get you a higher return than others such as rehabbing the kitchen and bathrooms, replacing flooring and painting. If you can do all or some of the work yourself, you will save a bundle of money. However, if you are not handy, then use a reliable contractor. Once you find one, hold on to that person because it’s hard to find someone that does good work, stays within your budget and delivers the work on schedule.
Cost Saving Tips
- Look for flooring close outs and discounts on expensive quality brand materials that will last longer. There are many companies that offer discounts on all types and quality of flooring including woods, laminates, marbles, tiles and carpets. You will save money if you purchase the materials directly and pay the contractor just for the installation and labor since contractors usually mark up their materials. Since Florida is a hot and humid climate, laminates, marbles or tiles are better choices than woods and carpet. They are easy to keep clean because dirt, dust and pet hair can be removed easily. Carpet is hard to keep clean especially if you are planning on renting your foreclosure property out either seasonally or year round.
- Use neutral color long-lasting interior paints that will withstand time and abuse because it makes a huge difference in how often you will need to touch up or repaint the entire interior of your property. Also, good paint covers up old paint better and imperfections on walls and does not yellow as it gets older or leave paint brush marks. Prep the walls by filling in cracks and removing stains. You will need to apply a primer if you are painting over drywall. Water based latex 100% acrylic low VOC or no Voc paint is the best choice because it is really easy to clean up and does not smell as strong as oil based paint. Decide on your finish, whether you want a gloss or semi-gloss. Flat and matt finish paints are good for walls that have irregularities. Test a patch to make sure you like the color. You can always buy a small amount of a couple colors to see which you like better. Make sure you buy sufficient paint so you don’t run out. Add an amount of 25% more to the square footage less the doors and windows. A gallon of paint normally covers up to 450 sq. feet.
- Reface kitchen cabinets or repaint whenever possible. If you have to replace the cabinets with new ones, shop around for the best prices. Buy new appliances and hardware. Countertops should be replaced as well. Choices to use for counters are granite, ceramic tiles, corian and engineered stones, laminates, wood or butcher block, marble and soapstone. If you want some green ideas, composite or recycled glass slab are good choices to use as well
Once you get through a few rehab projects, you will gain more confidence and become comfortable with the process. Making wise choices will save you time and money down the road. Once of biggest reasons buyers/investors lose money on their rehab foreclosure projects is they fail to estimate the true cost of their repairs and end up going way over their budgets cutting into their profits. Before you even buy the home, you should be getting at least three repair estimates during your inspection period so you know what to expect and can budget for the repairs. Your Realtor can refer you to vendors and contractors that they do business with on a regular basis and whom they trust to do a good job for you. Doing something right the first time is the best way to approach your foreclosure rehab project so that it is rewarding and profitable for you, and you will avoid costly mistakes.