Estimate the Sales Price First

Never forget: Buyers (tenants) determine the price at which you can sell (or rent) your rehabbed property. Never add your costs to your purchase price to estimate a future sales price. Cost-plus pricing doesn't work. Yet how many times have I heard sellers say, "We have to get $395,000. We have at least that much invested. We just put $40,000 into the kitchen"?

Folks, no one will care how much money you put into the kitchen. Buyers only care whether you're offering the best value for the money. When you plan for profits, start with the price that a reasonably well-informed buyer will pay for your creation.

Beware of pricing your beautifully rehabbed property as if it were located in a more upscale neighborhood. To stay on the safe side, aim for a sales price that sits at least 20 percent below the highest-valued property on the block. The closer you push toward (or above) the top price limit of the neighborhood, the more difficulty you will face in trying to get your price (or rents)—even when your property shows clear superiority over the others.

Credit Score Booster

Credit Score Booster

There are many misconceptions about credit scores out there. There are customers who believe that they don’t have a credit score and many customers who think that their credit scores just don’t really matter. These sorts of misconceptions can hurt your chances at some jobs, at good interest rates, and even your chances of getting some apartments.

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