I can’t count the number of times investors new to the game ask me what they should do if their rehab goes over budget. It’s a valid concern! For a lot of investors, the fear of going over budget is actually preventing them making deals!
How To Stop The Fear Of Going Over Budget Dead In Its Tracks
Rather than let the fear of going over budget stop you from doing deals and making money, there are a few ways you can alleviate the stress. After all, I should know! After my first rehab project turned out to be a complete nightmare, I knew it was the perfect opportunity to learn from my mistakes.
Before You Start A Rehab Project
First and foremost, make sure you are prepared in the event your rehab budget does go over. Ask yourself what you are going to do in the event there is an overage on the construction.This will allow you to establish several possible solutions and help ease the anxiety of the “what if ” situation.
You probably have more options than you realize! Though some are certainly better than others. If you’re at a loss of where to start, be sure to check out the video below. I’ll go over a few scenarios and weigh their pros and cons to give you a better feel for how to handle such situations.
Know The Loan To Value Ratio On Your Rehab Project
Another essential thing to help you prepare for a rehab project is to famililarize yourself with the concept of Loan to Value Ratio, or LVR. Simply put, it’s the percentage of the after-repaired value that you’re willing to borrow. In the video below, I’ll go into more detail on how you can determine your LVR, but it typically ranges from 65% to 75%.
Already Over Budget On A Rehab Project?
But what if you’re watching this video and it’s too late–you’ve already found yourself in over your budget on a rehab project and you’re not sure what to do?
Let’s take a look at the video for a more thorough explanation…
Have you ever had a “deal” but didn’t have the paperwork to tie the deal up? Here Are the “Magic” Forms & Agreements I Use to Make$1,000 – $25,000 Per Wholesale Deal.
To YOUR Success,