How to Rehab a Home

You've got a house, now the question is "What to do with it"?   The best first step is to evaluate the neighborhood.  If the neighborhood has shingle roofs, vinyl floors and basic amenities in the homes, you don't need a tile roof, ceramic tile and gold plated fixtures.  The objective when doing a quick cost-effective rehab is conformity with the neighborhood.  Carpet, paint and some landscape are almost always a requirement to freshen the appearance of the property, after that, your rehab should focus on getting the most improvement for your investment dollar.
Structural Rehab- I strongly advise against a new investor purchasing properties needing structural rehab.  If there are sagging floors, cracked foundations, fire damage, unpermitted structural changes, water or dryrot damage, stay away from the property.   While these kinds of property can be purchased very often way below market value, the rehab cost to bring them back can make your investment a non-profit effort.  The difficulty in evaluating cost of repairs means this type of property should be left to more experienced investors and contractors.

Beginning Cosmetic Rehab - You've evaluated the area and know what the house SHOULD look like, now how do you get it there?  If you start on the outside first pruning back overgrown trees, cutting shrubbery back and getting any lawn back to a normal height, that's the first step.  Watering on a regular basis after your trim back will allow plants and trees to start to grow in an attractive fashion.  You start with vegetation first, because you can control the speed of interior projects, but you can't make plants grow any faster.  A freshly painted exterior on a home greatly improves it's curb appeal.  Since you have the existing plants cut back, now is a good time to proceed with exterior paint.  Again, keep in mind you are looking for conformity with the area, colors should be in the same range as other area homes.

Inside Cosmetic Rehab - There are three basic inside area types - kitchen, bath and living.  Kitchen is the most expensive to rehab, bath is the second most expensive rehab and living areas are fairly inexpensive to rehab. 
Starting with basic living areas , pull the carpet from each room, roll it and store it in the center of the living room.  You can leave the padding.  It's much easier to paint without carpet, the living room is usually the largest room and closest to the front door.  The new carpet installers will haul it off when they install the new carpet.  Window coverings, electrical outlet covers, switch plates, light fixtures, door knobs and hinges can all be pulled.  Please keep in mind the power should be turned off at the breaker box anytime you are working around electrical fixtures and outlets.  Mark all the doors on the top edge (no one ever sees the top)   identifying which room they belong to and put them all in one room.  You should be able to see every imperfection in the walls at this point, now is the time to patch, clean and prep for painting.  Mask off doorframes, cabinets and window frames.   When you've completed the prep, start the painting.  Sprayers are the fastest method of applying paint, since the house is gutted, overspray isn't a major problem except around your masked areas.  Ventilation is important though, so you'll want open windows wherever you're working.  Living room first, then bedrooms, hall area last.  Re-inspect each room 1-2 hours after painting to make sure everything is covered and even, retouch any problem areas. 
Time to get an accurate count of outlets, switches, hinges,knobs and light fixtures.   Go through the whole house counting everything you removed or will remove.   Every lightswitch and cover plate should be replaced along with all outlets and plates.  Every living area light fixture(don't forget bulbs) should be replaced, determine whether kitchen and bath light fixtures need replacement or are serviceable.   Every door will need new hinges and a knob.  Do you have to change everything?   Maximizing returns is about impression.  Used hardware will be discolored, scratched, have paint on it and not match throughout the house.  A new knob(with striker plate) and hinges, a new light fixture, new switch, outlets and paint should cost less than $60.00 per room.  For a standard 3 bedroom home that's $300.00 for the living type areas.  Everything will match, be brand new and make the home much more desirable.
Doorframes, window sills, cabinets and doors are usually going to be a semi-gloss enamel paint.  Since you are now done with interior wall paint, lay doors(in the door room) on the floor, 3 or 4 at a time.  Prop one end up about six to twelve inches and you can spray one side and the two edges people see.  Keep overspray off the walls.   When they are dry, flip them over and do the other side.  Brush or use a small roller for doorjambs and cabinets.  Install light fixtures and outlets while paint dries, as doors dry, take them back to the room where they belong.  After doors and jambs are completely dry, they can be re-hung and hardware installed.  There's no need to rush, you can complete painting and installation as you rehab the bathrooms.
Bathrooms need individual attention.  In many cases, fixtures have been upgraded through the years, so a full gut and rehab isn't necessary.  Use your judgement.  It's easier to paint and replace flooring if the toilet and any sink cabinet are removed.  Re-install with new plumbing and seals and you will have a fresh bathroom with no water leaks or built up corrosion.  New handle sets and/or spouts will sometimes be enough so you don't have to replace everything.  Cabinet handles and hinges should all be replaced.  Flooring and paint should be the same if there are multiple baths, often there will be different fixture styles in each, that's fine as long as everything matches in each. 
At this point, you need to clean all the windows in the house, inside and outside.   Pick up anything remaining in the rooms and take it to the kitchen or remove it from the property.   
Kitchens are important.  Clean and paint is the first step if you are keeping the existing cabinets.  If existing cabinetry can be salvaged by intense cleaning and/or refurbishing, that will be your biggest cost savings.  Cabinet handles and hinges should be replaced unless the existing ones are in extremely good condition.  Counter-tops (if ugly or damaged) can usually be changed fairly easily, professional installation is worth it for a finished appearance.  Flooring should be installed after any necessary cabinet work, whether it's cleaning, refurbishment or replacement.  The sink should be free of stains and corrosion, the plumbing underneath should be the same, if it's not, change it out.  Clean and put down shelf paper in all the drawer and cabinet interiors.  Make sure the lighting is adequate, if not, change fixtures or have additional fixtures professionally installed.  If the oven or stove need replacing, there are stores that sell used appliances, these can be a good deal. 
Carpet gets installed during kitchen rehab.  As soon as the kitchen floor is down, get the installers in.  You can schedule installation when bathroom and kitchen floors are done, you should be done with paint and all of the "messy" projects.  Everything remaining shouldn't get the carpet stained or tracked up.  Any remaining tools or supplies should be in the kitchen, the rest of the house should be clean and empty.
Marketing the property can be started during kitchen rehab.  When you have carpet in the property, a "for sale" sign can go in the front yard.   The windows are clean, the property is immaculate and since you will be on-site anyway finishing the kitchen and a few other things, leave the front door open and place an "open house" sign in front while you are there.  Any remaining rehab to the kitchen should not adversely affect a buyer's decision.  They will be able to judge the quality of work by the rest of the house.

Finishing Cosmetic Rehab - It's time to finish the front of the house.   Flowers should be planted where appropriate, either rehab or replace the mailbox, porchlight, house numbers and doorbell.  Keep in mind any plants planted close to the house might die if the house needs tenting for termites.  Leave some room at the base of the house if possible.  Take a critical look from the street, is there anything that stands out as being unattractive?  Is your property now the best or one of the best looking on the street?  If it's one of the best, there's nothing unattractive and you've priced right for the area, it will sell quickly.
You're still not done, so you can't rest yet.  Smoke detectors need to be installed and you need to check all the systems (electrical, plumbing) to make sure they work properly.  Window coverings need to be installed where appropriate.  Just a note, you will sometimes have an offer in before you get the window coverings installed, if you have made no promises to install and it's not written in the contract, you have no obligation to provide them.  It's happened more than once! 

How long does the process take? - Depends on how much time you want to spend and how much you want to contract out.  Doing one at a time, cosmetic rehabs shouldn't take more than 30-45 days total.  If you are doing multiple rehabs or require roofs, driveways, major debris removal, these can all cause delays due to scheduling problems.  You can reduce the time by contracting interior and exterior painting, use day labor for exterior cleanup and use supervised day labor for some interior work.  Most rehabbers start to contract out the labor intensive jobs as they progress.  It's often most cost effective to find a new project rather than spend the time actually working on the projects.

How much will it cost?   Time for you to spend some time at Home Depot.  Get your local prices for knobs, hinges, switches, outlets, cover plates, light fixtures, bulbs, mailboxes, plumbing supplies, sinks, toilets, water heaters,   faucets and paint.  Write the prices down, after a few trips, you should have a decent knowledge of material costs.  You'll add to your knowledge as you go along and every time you purchase more supplies, you'll see other items and add to your knowledge.  Always figure on carpet, paint and fixture replacement.  Then you'll only have to add specific items as needed for individual properties.  If you can't get a close estimate of costs because there is major work, let the deal go by, there are always other properties.

For Tapes and Courses on this and other Real Estate Investing Topics, please visit our Online Catalog