Many properties you deal with in this strategy need at least a little work. Some more than others.  Repairing and remodeling apply more to retailing properties than wholesaling them. However, even basic and critical repairs can net you significant profits if done judiciously. What Improvements Matter Most?  This is a good question, and the answer is different for different markets. What you want is to do the things that will cost the least, and yield the most. 

Rule #1 is to realize that you are doing this to make money and not necessarily live in it yourself.  If it ain’t broke, don’t fix it. In other words, don’t spend time remodeling the inside of an out-building if it’s painted the wrong color and needs a work-bench.
The condition of an out-building will have little if any value. So what do you do? Our suggestions follow:

Focus on the Outside Curb Appeal First:

1.    Trash out the yard, power wash the structure
2.    Trim all shrubs, green up the lawns
3.    Paint the exterior trim and base coat
4.    Replace screens and do other cosmetic fixes
5.    Repair the roof
6.    Add house lettering, new light fixtures and a mailbox
7.    Install a decorative front door
8.    Plant new shrubs, flowers, fresh bark, etc. (within reason)

When someone pulls up to the house, they have to want to come in. You can have a palace inside, but you have to get them to come in and see it. People judge a property by its curb appeal. Do NOT underestimate the power of this. If you are on a limited budget, make it look good outside first.
Fix Up For the Woman in the House The next thing to remember is that the women buy the house. I know this may sound sexist, but it’s true. If the wife hates the bathroom because the tub is discolored and the toilet seat is cracked, you won’t be selling it to that couple anytime soon.  Always put new toilets in, for obvious reasons.

After the property is free of all trash, yucky car-pets, etc., and the outside looks good, then make sure all the mechanicals are working properly.  Replace or upgrade if necessary.

Check all of the following:

1.    Plumbing
2.    Electrical
3.    Heating / AC (Don’t forget to check the hot water heater. They often go out if the water is shut off, and the power is still on.)
4.    Kitchens and Bathrooms: I cannot emphasize this enough! Kitchens and bathrooms make or break a sale every time. If appliances are old and outdated, replace them. If cabinets are not clean, scrub and paint them. I have seen people ignore this because of cost. The house sits for months. The extra interest cost alone would have more than paid for the improvements.
A)    Make sure they are clean and sanitary
B)    Replace toilets
C)    Replace tubs if necessary and install a door enclosure
D)    Replace fixtures, etc.
E)    Paint and change flooring or counter tops
5.    Repaint interior where needed.
6.    Update fixtures.
7.    Install new floor coverings, or clean the existing ones.
8.    Change electrical switch plates, outlets, heat vents, and mini blinds.


The little details make a big difference and don’t cost much. This is by no means a complete list, but it can help you get started on your repairs. Repairs like this do not have to take a lot of effort on your side. They key is to establish a good relationship with reliable contractors and professionals to help you do the work you can’t or don’t have time to do yourself.  Obviously, if you are handy with repairs and you have the time, it can save you a significant amount of money. However, you are trying to move property quickly here, and you want to maximize your return. It isn’t really the time to start experimenting with plumbing or electrical work unless you know what you are doing.

In the beginning, stick to properties that may only need some paint and carpet and a little yard work.  Easing into projects in the beginning is critical to your success as a new investor. It takes time to assemble all the players on your team. As you build your track record, you will find many good and helpful professionals, but in the beginning, it is just you, and remember, you want to get this done quickly.
Know What Materials Cost

A great source for materials is your local Home Depot, or other discount lumberyard. Go down to the store. Shake a few hands. Get catalogs of everything they sell in the store. Spend a little time with the catalog so you know what things cost and how to call things by their correct name. You’ll earn the respect of your contractors when they think you know what you are talking about. You can also set up an account for materials.

What you want to do is create a template of the type of repairs you do and the materials you want to use. Remodeling does not have to cost a ton of money. You don’t need imported Italian tile to make a bathroom floor look good. If you are educated in material costs, when your contractor says you need to replace a sink or toilet, you know what your materials should cost. You should be able to do a complete bathroom - tub shower, toilet, vanity, sink, flooring etc. - for $500 in materials plus some labor.Here are some general rules of thumb in deter-mining your repair costs. Your actual bids may vary, based on location and market, but try to use these at least as a starting point in your planning.  See also, the Repair Cost Guidelines Worksheet at the end of this section.

Standard Repair Cost Guidelines

CLEAN-OUT: This is the process of getting rid of garbage, both inside and out. The main costs to consider here are disposal, generally defined by the cost to rent and empty a dumpster.
Price Guidelines
·    10-yard dumpster: $150-$250
·    30-yard dumpster: $400-$650

Most cities or landfills charge extra for excess weight, so be sure to check on limits and requirements as you make the arrangements.
You can also hire 2-3 temps to come in and help with the clean-out. It costs some money in labor, but it gets the job done much faster.  EXTERIOR PAINT: The price for exterior paint varies widely, based on the current condition, the painting surface, and the amount of scraping, priming, and preparation required. The height of the building is also a factor as taller building require scaffolding or ladder work which adds extra costs.

Price Guidelines:
·    $1.50 - $3.50 per square foot A two-tone paint scheme usually pro-vides the best curb
appeal. And don’t forget to add shutters along the windows (at least the windows visible from the curb) and nice, visible house numbering.

WINDOWS: Check all windows and glass for bro-ken panes, damaged or worn-out frames, malfunctioning latches and opening mechanisms, etc. You shouldn’t need to replace all the windows on the house, but you should replace or repair those that are broken or damaged.

Price Guidelines:
·    Replacement window (frame and glass): $100-150 each with 20-30 minutes installation
·    Broken glass: $30-40 per window for labor and materials
·    Glass sliding doors: $550-1000, installed Any time you replace window frames, there may be some touch-up work required on both the interior and exterior, so be sure to account for that in your estimates.

INTERIOR PAINTING: Interior paint is one area where many people can save money. However, most of these deals are time sensitive, so it often pays to hire someone else to do the work.

Price Guidelines:
·    Ceiling and walls only: $1.00 per square foot
·    Include trim: $1.50 per square foot
·    Priming and misc. patching: add $0.50 per square foot The average cost for a 10x12 room should be in the range of $150. As you select your paint, be sure to choose a satin or semi-gloss. They stay cleaner, show better, and are more versatile in their use.

CARPET AND VINYL: Carpet and vinyl installation is quoted in square yards. To figure your area, calculate the room length x width, in feet, and then divide by nine (9 square feet to a square yard).

Price Guidelines:
·    Carpet: $10-$14 per square yard
·    Vinyl: $12-$14 per square yard

Pricing includes installation, pad (with carpet), and materials. The carpet should be a step up in quality from the standard builder grade. Be sure to use at least 6 lb rebound padding. The vinyl pricing does not include installation of a sub-floor. If you need a sub-floor, add $1.00 per square yard.  KITCHEN CABINETS: Cabinets are another high-impact item that can dramatically improve the look of a kitchen. We generally look for cabinets made of Chadwood and/or Oak.

Price Guidelines:
·    Basic 72” starter set (upper and lower): $675
·    Basic 84” starter set (upper and lower): $800
·    Basic 108” starter set (upper and lower):$1050
·    8” deep sink: $89
·    Counter top: $15-16 per foot
Always buy cabinets pre-assembled and ready to install. Your total cabinet cost should never be more than $100-$125 per foot.

DOORS: When replacing doors, always get pre-hung doors.

Price Guidelines:
·    Interior door 6-panel door, with door jam, pre-hung:
$125, installed
·    Exterior door, with door jam, pre-hung: $250, installed
·    Screen door: $160, installed

LIGHTING: All interior lights should be clean and in working order. If you need to replace them, keep the lights simple, but nice.

Price Guidelines:
·    Interior ceiling lights (13.25” frosted gold rim):
$10-18 each
·    Dining room, entry chandelier (two tiered): $55-
$80 each
·    Porch lights: $35 each

APPLIANCES: If you need to replace appliances, it is best to use reconditioned units. As long as they look nice, are not too old, and work well, that is all you need.

Price Guidelines:
·    Reconditioned refrigerator: $175
·    Reconditioned stove: $175
·    Reconditioned Dishwasher: $150 BATHROOMS: As we mention above, a nice-looking and clean bathroom is imperative to getting the best price out of your purchase. However, you don’t need to go overboard. The overall range for a bath-room overhaul should be between $500 and $2000, complete.

Price Guidelines:
·    Vanities:
24” with sink top: $100 plus $35 for faucet
36” with sink top: $180 plus $75 for faucet
48” with sink top: $350 plus $75 for faucet
·    Medicine cabinets (24 x 24): $45
·    Toilets: $65-95 with the seat
·    Bath tubs
5-ft fiberglass tub: $100-$125 (no steel tubs, they chip)
wall kit: $125
diverter and shower head: $175
A complete bathroom make-over should break down as follows:
·    Materials: $750
·    Framing walls: $250
·    Labor: $1000
With a maximum cost of $2000, finished.  However, you will need to plan some expense to refinish the sheetrock and paint after the new fixtures are installed.

HEATING: Heating system repairs and replacement vary, depending on the type of fuel, heat distribution, and the condition of the existing ductwork.
The three mail heating fuel systems are:
·    Natural gas
·    Fuel oil
·    Electric

The main heat distribution systems are:
·    Forced air
·    Hot water (with wall or baseboard radiators)
·    Steam
If the heating system uses water or steam as the heat distribution system, you will need to check carefully for leaks or freeze damage. This is particularly important if the home has been unoccupied during the cold months.

Price Guidelines:
·    Heating unit only: $1500-$3500
·    Heating unit with new ductwork: $4500-$6500 If you are replacing ductwork, you will need to figure in some costs for repair and touch-up of walls and ceilings as they run the new ducts.  ELECTRICAL: There can be a significant difference in electrical requirements for a single-family home vs. a multi-unit dwelling. This is one area where a good outside opinion can be invaluable, unless you happen to be an electrical expert yourself.

Price Guidelines:
·    Service upgrade: $500-$1,500
·    New wiring in walls: $100-$1,500
·    Emergency lighting and code violations: $500-$1,000

EXTERIOR SIDING: This is one of the more expensive repairs on the list, just because it takes quite a bit to cover a house, including siding, soffit, and trim. The price range below includes materials and labor for the siding, but not the soffit and trim.

Price Guidelines:
·    Vinyl siding: $250-$300 per square (1 square = 100 sq. feet)
Siding installation on an average 1500 square foot home will take approximately three days with a crew of four.

ROOFS: Prices are quoted by the number of squares of shingles required. Squares are calculated by multiplying the length by the width to get the number of square feet. One square is equal to 100 square feet.

Price Guidelines (includes materials and labor):
·    Tear-off with plywood: $260-300 per square
·    Roll-over without plywood: $200-225 per square
·    Shingles only: $100 per square

Valleys (the connecting of different roof angles) can require as much as six squares of shingles to replace. Also, beware of the disposal cost of the old shingles. They are very heavy and it will increase your dumpster fees (if you use one).  Cedar shake removal can be very time consuming because of the extra preparation required.  Make sure you are educated in local requirements, particularly how many layers of shingles are allowed in your market before removal and replacement is necessary. Always hire an experienced roofer and make sure they are licensed with good references. Take the time to check the references and the license. You’ll be sorry if you don’t.

MISCELLANEOUS ITEMS: Here are some odds and
ends that are good to know as you make your repair and fix-up estimates.

Price Guidelines:
·    House numbers: $15
·    Kick plates: $10-$20
·    Bark for flower beds: $15-25/yard
·    Flowers: $10-$20/flat
·    Shrubs (3-5 gallon): $10-25 each Also, Blend Color Schemes

Choose a color pallet so that your paint, carpet, cabinets, etc. all blend in the same color tones.  Many new investors underestimate how important this can be in the overall appearance of their property.  A potential buyer can walk into a room and it may have a cool-tone carpet with a warm-tone paint color. In a subtle way, something just doesn’t feel right. If you have no idea what I am talking about, you definitely want some guidance in this area.
Talk to a professional decorator. Have them give you three color schemes with carpet and vinyl choices so you can move quickly. It is real obvious, when you get the hang of it. You can see the builders that are blind to this compared to the builders that coordinate color schemes. It doesn’t cost any more, and will actually make you money when you factor in how much faster you will sell your house.

Junk Doesn’t Sell Just remember, when you are remodeling, junk doesn’t sell. People like to buy pretty, cute houses.  I always replace carpet and paint at the very mini-mum.  It’s quick and cheap to do and gives a property a new feeling. You always make your money back in increased value or save it in interest by selling faster.