If you haven’t noticed rehabbing is back…in a BIG way. What’s rehabbing? My definition is buying a house, repairing/updating/& finishing it to the maximum allowable by neighborhood standards in hopes to sell it for the highest realistic price. That’s a mouthful.

If you don’t already know, selling houses retail is a delicate balance between budget & final product. There are a lot of variables that play into your end profit.

1. Purchase Price
2. Rehab amount
3. Rehab time
4. Rehab quality
5. Rehab style

Let’s pretend that you have all of those already figured out. If you even paid attention to the title of this article, now that you’ve finally read it, today’s all about the special sauce. You know, it’s what make a Big Mac a Big Mac. It’s what keeps Coca-Cola the most recognized brand in the world, and it’s what make people literally freak out to have the newest Apple gadget.

Well a big part of the special sauce in my rehabs is…Lighting.

Boring?

Not really, and here’s why..

Picture this, you are invited to a mini REIA get together at a current listed finished rehab of mine. As you drive up you notice a dozen or so cars and a few friendly faces in and around the yard. The curb appeal is there, nice accent colors on the house, clean and classy landscaping, even a high end address bar. You walk into a freshly custom painted front room with gleaming hard wood floors, an amazing fireplace, but wait a second…something’s just not right. You can’t exactly put your finger on it but you just feel like something’s a little off. As you enter the kitchen it’s almost like a gray overcast is looming above the cherry cabinets and miles of granite. Finally you take a trip downstairs to the basement and it hits you. The eerie feeling that a vampire may be lurking right around the corner. All of this negativity has been caused by one thing…lack of proper lighting.

The first thing I make sure of in all of the houses I am selling is that there are 100 watt light bulbs in every single outlet. That’s even true if I’m wholesaling a stinky old foreclosure. But even before the light bulbs you have to make important decisions regarding your fixture choices during your remodeling planning process. I always opt for fixtures that have 2 if not 3 bulbs for general lighting; bedrooms, hallways, closets, foyers, etc… In bathrooms I typically go for a fixture with 4 lights as opposed to 3 unless that bathroom is tiny. Remember the brighter and cleaner a house is the larger and more welcoming it becomes. Next when it comes to laying out recessed lighting in the kitchen, family room, or master bedroom I always put in more than the room “seems’ to need. As long as it doesn’t look weird with too many holes in the ceiling too close together of course. Last but certainly not least in the basement. How many basements have you walked into in the last 5 years that made you say “Wow, this place is so clean and bright”. Not very many I’d assume. Typically Ill have 2 switches at the bottom of the basement steps that turn on all of the lights. This way when potential buyers go down to what’s normally a dungeon they are more than pleasantly surprised.

A $2 pack of 100 watt light bulbs from Home Depot or Lowes can help you sell faster for more profit. That’s my goal with The REIA of Macomb: to help you make real money in real life in real estate investing.

Illuminated,
Dylan Tanaka-Founder

As we kick off the 2012 real estate investing season only one word comes to mind…TURNAROUND! In the first week of the year RealtyTrac came out with numbers proving that foreclosures are at their lowest point in 7 years in Michigan. What does that mean for us Michigan real estate investors?

Well if you’re not on the front lines day to day as I am you may have missed that over the last 12 months the trend to buy, fix, and completely rehab to the nine’s is what’s producing the highest profits for investors. There are quite a few different reasons for this. The first I believe being a stabilization of values in good neighborhoods that people want to live in. Secondly, mortgage rates are low. And lastly in my opinion, a general positive change in the market itself due to consumer confidence, the stock market, and hopefully the end of overseas wars.

This makes investing easier…if you have the right formula.

First things first you have to buy in good areas. You have to know what comparable rehabbed properties are selling for. And most importantly you need to know how to rehab. These three principles will be the focus of all of the REIA of Macomb’s training articles and seminars from the early part of the year through summer. Is this the absolute only subject we’ll cover? Of course not. We’ll still be talking about wholesaling, rentals, and private money, but our focus will be on rehabbing.

The best investors whether real estate, stock, private equity, etc. are always on the cutting edge. That’s exactly why we’re so excited about rehabbing. The opportunity is tremendous right now to buy properties in areas that people want to live in for a very low price that will allow you to do an amazing remodel and resell for mega profits.

As the weeks and months go on we’ll dive deeper into exactly what it takes to be an all-star rehabber. I don’t want to overdo it and drown with with too much information in this article. What I want you to do is to start identifying neighborhoods that you believe people want to live in or are even obsessing over. Then find out what the beautifully rehabbed homes are selling for. This will give you a good base for the next few months and training articles.

Remember real estate is cyclical and the new cycle is pointing towards rehabbing.

Excited about 2012,
Dylan Tanaka-Founder

The #1 Mistake You Can Make On Your Website

Are You Ready to be an Equity Bandit?

Real estate is cyclical. Which means different buying techniques are called for depending on what part of the economic cycle real estate is in at that particular time. 5 years ago, before theMichigan foreclosure boom, one of the best ways to buy a house was from a seller who had equity and needed to sell fast. There were many ways to find that particular buyer, direct mail, internet advertising, or most investor’s weapon of choice “We Buy Houses” signs.

As equity evaporated, less and less investors were going after private sellers and focusing on the brokers who controlled the foreclosures. It was the general belief of Michigan real estate investors (yours truly included)-that your chance of finding a seller who has enough equity for you to be able to offer them a fair price while leaving meat on the bone for yourself was 100 times more difficult than offering on a bank owned home and getting it accepted.

It seems that this spring’s buying season has seen a rash of investors both new and old going back to the “We Buy Houses All Cash, Any Condition, Any Situation” bandit signs. Sometimes you’ll see good signs and other times you’ll see something scribbled on the sign by some arrogant punk that gives all of us a bad name. I’ve personally been using bandit signs for close to a decade and I caution you that BEFORE YOU PUT SIGNS OUT ON THE ROAD FOLLOW THESE 3 STEPS

1. Make sure you find out what the local ordinance is for each city/township-you can and will get tickets and have to appear in court if you do things wrong (trust me!)

2. Your “message” -what you write on the sign is super important
•keep it short-passers by have 5 to 10 seconds to read it understand it <–most important & write down the number or website
•the phone number on the sign should be as easy to remember as possible-if you’re buying in 248 than use a 248 number, 313, 586,517 etc
•if you have a website make sure the domain name is as short and easy to remember
•write big and simple-here’s an example of what successful investors are using