5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties

Let's talk about the 5 things that you need to do to have a successful career buying, rehabbing, and selling properties. My name is John Bedrzejczyk. I'm the co-founder of Homes Auto, which is an online digital home management platform that allows consumers and individual businesses to manage not only their primary residence, but all of their properties in their real estate strategy. Okay, the theme of my tips is you can't manage what you don't track. The first and most important thing is you've got to keep a baseline of all the financial information about the property you just bought. The purchase price, the sales agreement, the mortgage, the interest rate, how many months do you intend on paying that mortgage, the property taxes, the home insurance costs, even some initial utility costs that the house is going to have to bear. You have to have a great set of documentation around the baseline costs for the home that you just purchased that you're going to rehab. The second thing you need to do is create a list of every single project you intend on doing as part of the rehab. And that goes into each and every project, identifying all the materials required, the equipment, the appliances, the building materials, the fixtures, the finishes, everything that that project is required. You got to come up with a list. And perhaps most important is do what I call product and brand research, right? As an example, if you're going to do a kitchen remodel, are you going to buy the high-end, the mid-tier, or the low-end appliances? That has a huge impact if you're going to spend $20,000, $50,000, or $70,000 just on the kitchen remodel, depending on all the different products and brands that you choose. So you really have to go through and do that product and brand research for every single project, for every single item, to give yourself a realistic budget over how much you're going to invest in all of the remodels and rehabs that you're going to do on the property that you just bought. The third thing you got to do is keep all of your costs and documentation over everything that you do on your house. This includes whether you're going to do it yourself or whether you're going to hire a contractor for certain trades. You got to keep track of all the receipts, the invoices, the costs, the product manuals, the warranties, all of the documentation about the house. You should even take before, during, and after photos and store all that information for record keeping. And then at the end, you got to summarize all your actual costs and then add that to your original purchase price of the property. And that becomes what's called the tax basis in your house, which is going to become a very important figure when you sell the house in the future to determine what your tax situation is going to be based on how much you invested in the rehab. The 4th thing you need to do is create a preventative maintenance calendar and do a home inventory. This is especially important if you're going to have renters live in the rehab prior to you selling. The home maintenance calendar will create a system that you can use to determine between you and your renter who's responsible for doing preventative maintenance tasks to make sure the home is operating efficiently. The home inventory is essentially taking photos and videos of each room in the house and the exterior of the home, documenting its condition so that when, when renters move in, live and/or move out and there's any damage to the house, you've got documentation over who's responsible to fix that given the home inventory that you have taken. The last thing you need to do is use the digital history of the rehab as part of your marketing strategy when selling the home. The list of projects that you've done, the product warranties, the owner's manuals, the before and after photos, the maintenance history, all of that digital information can build confidence with buyers when they're looking to buy your home. Then when you've actually sold it for whatever sales price, then you're going to go and compare that with the tax basis about how much you bought it for and all the investments that you made. And you're going to take both of those numbers to your tax planning situation to determine what tax liabilities you may have. And you've got all of the documentation in case you're ever audited in the future. So like I said when we started, you can't manage what you don't track. Many people will develop their own systems to track all this information. And if you don't have your own system, go to homesauto.com and check it out as it can really be helpful to help you manage all of your rehab projects.