How to Make Sense of Rehab
Buying Multi-family is not buying real estate—it’s buying a business. Every dollar that you spend, 30 cents should cone back to you. If you don’t get a return on investment, why spend the money? I bought 192 units recently. Originally I thought we were going to fix 48 units which would cost $480,000. Now we are doing just 10 units spending $48,000 creating the illusion we are spending $480,000. It’s not about taking short cuts—it’s about being smart about cutting costs that aren’t needed. Create the illusion you are spending money. What do you need to spend to increase rents? Does it make sense to rehab the whole place? Maybe you can fix things by changing 1 or 2 things. Partially rehabbing a place can be just as effective as rehabbing the whole thing. Bottom line, if you are going to spend money, make sure you will get a return on it.