I really don't like to use the word rehab for this property, because most of the stuff is just cosmetic.
I managed to get all the locksets changed, which was my initial priority. My in-laws helped me clean a lot of the inside. The previous owner must have been a smoker. You can't tell by smelling the place, but just one stroke on a window with some Windex will show youthe proof (black). I also had to replace all six smoke detector batteries.
After my RE agent let me in in the morning, we talked for a good 20-30 mins. She said if I was really considering this venture, I could really save a lot of $$$ in the long run and get my RE license. She said the commission I have to pay now really eats into the profit. She also dropped off some comps for me. Looking at them last night when I got home, I see that my $130k estimate isn't bad at all. In fact, it may even be slightly lower per sq.ft. than the recently sold properties. We also talked about pushback from spouses. She recently bought a HUD foreclosed duplex, and said her husband fought her every step of the way. I told her how I could definately relate. She said I did real good on my first property, and I should do everything I can to keep it longterm. Even my MIL said the same thing later. She said she would try to convince my wife to keep it as a rental, too (which surprised me a bit - of course that was after I told her all the benefits of holding properties).
A lot of my time yesterday was making trips to Walmart and back to my house for 'things'. Today will be spent mainly cleaning the outside (siding, yard). I also need to install the coach light out back, since I didn't have any mounting screws to do it yesterday. My MIL said that I should wait to have the microwave installed until the latest possible, since it is easily exposed to people peeking in the window. Good idea, but I'll definately need to get it in before I put it up for sale.
One thing I am have read a lot about and slowly realizing is the temptation to put more in the house than needs to be. The carpet has a few stains and needs shampooed/steamed real bad. I had a moment yesterday when I thought about just replacing it all. Ugh! That would be a $2000+ waste. I'm also fighting whether or not to repaint the inside. Knowing the precious owner was a smoker, I can now see why the paint has a faint yellow tint to it. I figure if I paint it myself, all I would need would be about $100 in supplies and probably 15-25 gallons of paint. I can get get cheap earthtone paint for about $85 per 5 gallons at Lowes. So, I'm looking at about $500-$750 to repaint the whole place inside. I also thought about painting the outside, too, as it has a lot of imperfections (caulked holes, wear & tear). It would be easier labor-wise, and would probably cost another $500 or so in paint, but it may really make a big difference in csometic appeal.
Lot's to still do and a lot more to still think about.
BTW, a fellow REI stopped by yesterday to introduce himself. It was a brief introduction as both he and I were busy doing other things, but it was nice to finally put a face to someone who posts replies to my blog.
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One thing I like to do is get good lightbulbs. The rooms should look bright with the lights on. Some places have really low powered ones and the whole place seems gloomy, getting soem high powered bright daylight style bulbs generally helps it show better I think. As far as your RE license, I've heard that it causes you to have to make some disclaimers when dealing with people, but I don't really know. Personally, I have never bought a house through a real estate agent (except my very first personal one)and really, I doubt that I ever will, unless something really great comes along. I just try to avoid it as much as possible. Agents do take a decent chunk out of your margin, and becoming an agent yourself would half that, but its still leaving some cash on the table. Besides, I'd rather negotiate with the seller directly. I realize on HUDs you can't do that, but I've never done a HUD home. They seem to always go for more than the starting bid around here, and I feel I can homes cheaper on my own.
I have a friend who does maintenance for apartment complexes. He said they add a teaspoon or so of vanilla extract to the paint before painting to help overcome the smell that smokers leave behind. Also, it makes sense that the ceiling gets the worst of it.
Yes, if you do get your RE license, you will need to disclouse that to all the people you buy from. This could lower your negotiating power since they may assume you know more than them and are trying to cheat them somehow. (Of course, you probably knwo more than them anyway, even without the license.)
Well, I thought about getting a license myself. I came to the conclusion (which is the same as Robert Kiyosaki from the Rich Dad/Poor Dad books) that it would take my focus off passive income and make me think more in terms of active income. Besides, I've found a great agent who is a solid member of our community, knows everyone, and is an expert investor himself. In fact, he only sells real estate just to have play money. He's teaching me as we go. So, I feel that by being my own agent, I would have ended up costing myself money in the long run in terms of knowledge being power.
...Not to mention, in the state of Oklahoma, obtaining and keeping a license is expensive and requires dozens of hours of classes each year.
Oh, also, I would recommend fresh paint for the interior of your new property. Nothing makes a place look new (and therefore desireable) like a fresh coat of white paint on the walls and ceiling. You could rent a paint sprayer, if you don't already have one, and get the job done in a snap. The paint will also cover the smoke smell, if there is any. For any dark surfaces, you'll need to use Kilz first.
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