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What Is a Real Estate Rehabber

Jan 21, 2008
If you're unfamiliar with a real estate rehabber, this refers to someone that purchases a property with the sole purpose of fixing it up, renovating it, or otherwise upgrading it in order to sell it for a profit. A real estate rehabber typically has little or no interest or intent in actually living in or on this piece of property, and may hire out much of their work to a contractor or team. In addition they usually put a lot of their own time and energy into the property as well.

Obviously there is a certain amount of money that is needed to start out as a real estate rehabber. While you may be able to purchase a property with a short-term, low-interest rate mortgage that pretty much just gets the deed in your hands, you need to be aware of the fact that you will have a mortgage regardless of the amount of time the repairs on the property actually takes.

Depending on the amount of damage and needed repairs to the property, there is also a lot of investment income needed for the contractors that will assist you, along with materials. Even if you are very handy around the house and perhaps have been doing renovating for years, chances are there will be something - plumbing, wiring, roofing, landscaping - that will be outside your area of expertise. And of course no one can work alone, and even if you have friends and relatives help, their time is still worth something and you may be expected to compensate them in some way. And any experienced rehabber will tell you that there is always some unexpected repair or replacement that needs to be made - once you start tearing up carpet or pulling down walls, you never know what you may find. Having an adequate amount of capital or credit available is an absolute must.

There are of course legal considerations for any real estate rehabber. While there is no license that you actually need to simply purchase a home and resell it, there are permits that are required for renovating work and for doing anything that involves coming near the gas lines or water mains. You want to remember too that fixing up a property doesn't necessarily guarantee that it will sell for a profit, or that you'll recoup your costs, and the home may sit on the market for some time before it sells. Some real estate rehabbers have found that they have had to pay on a property for much longer than they expected, and of course your continued mortgage payment cuts into your profit margin. It takes years of experience to be able to maximize your profit but many people have found rehabbing as a great way to enter the real estate market.

Many have found that being a real estate rehabber is not only profitable, it's an incredibly interesting and satisfying way to make a living. And if you do it right, you can easily make a handsome profit as well.
About the Author
David Cowley has created numerous articles on real estate investing. He has also created a Web Site dedicated to real estate investing. Visit Real Estate Investing
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