Remodeling an investment property and then selling it is a very common strategy these days and one that has attracted many investors. Some will remodel and sell immediately, but others will remodel and maintain the property for a couple of years after they have installed tenants.

The term “you make money when you buy” is well known because when it comes to investing in property it is advantageous to buy the property at the lowest possible price. This attitude annoys some sellers, but on the other hand there are hundreds of sellers who ‘need’ or ‘want’ to leave a property very quickly and a cash investor is just the person they need to help them out of their predicament.

The question then is, “Where do you find those properties?”

There are hundreds of properties that come on the market each year where the owner is prepared to sell below market value. Of course there are circumstances that cause this situation and range from:

A job transfer

A marital breakdown

A state

a financial crisis

More other forced situations

When these situations occur, the homeowner is more than happy to sell below market value because it suits their situation and they are prepared (sometimes happily and sometimes not) to bear the cost of the lower sales price.

renewing

If you’re buying the property to renovate, you’re well in advance if you can get, say, 15% off market value at the time of purchase.

Let’s say you bought a property for $170,000 and it was worth $200,000, you spend $45,000 on a quality renovation that takes 3 months, and you sell it for $295,000, you’ve made a sizable profit: $80,000 less costs to sell and buy.

On the other hand, if you paid full price of $200,000 and renovated the property for $45,000 and sold it for $295,000, you’ve only made $45,000 less in purchases and sales and costs, earning much less for your work.

Make money remodeling investment properties.

Now see how you can earn profit from a job.

Here is a process you might consider to make a lot of money remodeling your real estate investment full time if you have enough capital behind you.

1. Go to the lease for property #1 in a 60 day lease and get busy making your remodel plans.

2. Liquidate the property and take 3 months to do the renovation work.

3. When you have liquidated property no. #1, go hire property #1. #2 for a 90-day deal and get your remodel plans drawn up.

4. Complete and sell property #1 and then move to the lease for property #3 on a 90 day lease.

You can see how by rolling over contracts and allowing time between contracts you can do 3-4 renewals a year with a satisfying profit each time.

If rehabbing properties is your thing and you really enjoy it, chances are you’ll consider doing several a year and living off the income as well. Many real estate investors have quit their day job and dedicated themselves to investing in property full time using this strategy.

Always remember to err on the side of caution, perform thorough checks before you buy, when writing your material checklists, and at all times during the process. Make sure your contractors are registered and insured for their work. Keep some margin up your sleeve, as not all renovations go as planned and you may need some extra cash for incidentals to complete the job. Otherwise, enjoy the experience of remodeling an investment property.