This is a story about my coaching student; Russell Sanders.  Russell is a full-time employee of the federal government.  He was tired of losing money doing RE deals, then he decided to join forces with me.  Russ found this deal on the MLS -- and we think it will be a doosey.

This house in Capital Heights, MD was vacant and bank-owned.   The numbers are as follows:

$75,000   purchase
$48,000   rehab

Honestly, when I first saw this house, I thought -- “heavy cosmetic.”  I mean it really was not that bad -- but it needed expensive items, like new windows, 2 new baths, a new kitchen, new doors, a new front entrance, new carpet, some new plumbing and updated electric.  But seriously, its an easy rehab.  I mean, easy in the sense that we won’t be gutting the place all the way back to the studs -- which is refreshing for a change. 

We’re about 3 weeks into the rehab and we’re seeing some serious progress.  I have some great video (but I’m biased) of the progress we’ve made thus far.  Man, I’m starting to love this technology stuff!

Video Tip

The basement here at Gunther is below grade, of course.  While adding the new full-bath, I noticed a big old pipe next to the drain for the toilet, and was wondering what the heck it was.  I got a lesson on plumbing that I thought I’d share with you.  If you don’t like poop floating in your pretty finished basement you must see this extra-special REI video tip.  In the second 1/2 of the video, I talk about how to properly remove a column in the basement.  Check out what I learned!

Post from: Craig Fuhr

REI Coaching Student Rehab -- 5041 Gunther Rd. Part 1

So as I was eating crabs on the back deck at my in-laws today, I noticed the following article underneath my perfectly seasoned crustacean.

“Overview of Housing Tax Credit” – by Kenneth Harney

If you are rehabbing houses that you will ultimately sell to homeowners, you must read this story.  In a nutshell the federal gov is offering home buyers a $7500 credit from April of 08 – to June 30, 2009.  This credit proves however that there is no free lunch as it must be paid back over 15 years so long as the home buyer remains in the home.

There’s more to this law and I’m no tax guy, but I do know a thing or two about marketing.  I should think this would make a pretty good selling point when marketing your next house for sale.

Post from: Craig Fuhr

Are You A Rehabber? You Need to Know This!

Mmmm…just look at that sweet piece.  Does that look like opportunity, or what?

My student, Joann; a mother of three girls,  a wife, and now part-time real estate investor, picked-up her very first rehab after joining our investment club less than 3-4 months ago.  And as her coach and mentor – I am proud as a peacock.   I’d hate to play poker with Joann, because she strikes me as the quiet calculating type; and unflappable at times when others would crumble.

Well, we’ll just see over the next few months how Joann keeps it together, cause’ folks – this is one serious rehab!

Address: 5204 Wesley Ave, Gwynn Oak, Maryland 21207  Google Map
Purchase Price:  $50,500
Rehab Amount: $80,000

Description:
This craftsman style house was purchased from a wholesaler – who tried to pull a few fast one’s on Joann, but with my help, she successfully navigated through the bull-hockey being thrown by the wholesaler.  Look at the pictures and you will see the house needs everything, including many dumpsters to haul away all the trash left by the previous owner.

The house has an unfinished full basement.  On the main level; living room, dining room, very small kitchen, bathroom, and bedroom.  Walk up the stairs to the second floor and you’ll find a dormer attic with two small bedrooms.  So that’s 3BR / 1BA.

TIP:
Always be ready to walk from a deal as you should always remember there will be another coming!  If you feel like someone or something in the deal stinks like a skunk, then the whole deal stinks!  You’ll find that some investors/wholesalers like to pull last minute stunts that increase your costs, and their total profit.  It’s called the “puppy dog close.”  Why do you think those pet stores in your local mall let you play with the puppy before they tell you how much cute little Fido costs?  Because they want you to fall in love with that cute little pooping ball of fur before they slam you with the bill only after you already have visions of little Fido cuddling up next to you in bed!  That’s what this wholesaler tried to do to Joann.  Folks, never fall in love with a deal!

The Plan:
We are going to turn this craftsmen out!  We’re talking full-gut rehab back to the studs.  The budget allows for all new everything, with the exception of a finished the basement. We’re gonna tear out walls, add a big dormer, and totally change the functionality of this house to bring it into this century.  Just wait.  You’ll see.  This house is going to be an absolute stunner!

So here’s the pictures of Joann’s very first day of demo!  Enjoy, and check back next week for more progress.

Click this picture for more photos

Post from: Craig Fuhr

Student Rehab Story, 5204 Wesley Road – Week 1