Prehabbing Homes to Make 15k on EVERY Deal
Flipping HUD homes fast using the HUD Wholesaling system and the Buyers On Fire software are great ways to make LOTS of money. But sometimes even John, founder of Systems Saturday, gives select homes a little extra attention before he brings them to market by doing a “prehab” to increase his margins. This week John shares how he prehabs homes get the maximum return, and how he decides when he will prehab and when he’ll wholesale a home he’s purchased.
0:01K not that small 0:05video it's not a video I did everything myself 0:14and here that is not how'd he do the business 0:17and that right there is a house that I have already fled as well 0:21already know that I can flip this house to a bar on my buyers was like a strong 0:25buyers list in this area 0:30hey guys today it is system Saturday I'll be your host john cochran and today 0:35what I'm going to do something to bring you a system that you can rip off 0:37duplicate using your own 0:39local market I use this every single day something that you didn't even know that 0:42I did 0:43and real say visits are really have an expose it to everybody okay really have 0:47an exposed everybody has got plenty having homes 0:49now pre- having a house is extremely different 0:53then rehab in the house it's also extremely different than wholesale in 0:57the house it's right there in the middle 0:59now whenever you go through a new pre have a home that you really want to do 1:02cosmetic stuff 1:03okay a lot of cosmetic stuff many are you doing paint you doing carpet just 1:08fixing stuff that a buyer would just say 1:10do you know on that's really what you're looking to do whenever you free app now 1:15for number aspect of it on every single pre have that you do 1:19again you want to make them rent already or do a lot of cosmetic 1:24work to it so that the buyers will just love 1:27the actual house now are you gonna priciest homes whenever you free have 1:31them 1:31on your to price them more expensive so you're gonna express some 1:36too expensive for a wholesale they also investors are going to be out 1:40you're gonna price and to chief um for a retail buyer and then those are going to 1:45be your buyers 1:46okay you're gonna your you're right in the middle there so and that means your 1:49profits going to be in the middle as well so 1:51you not gonna make as are you gonna make more on a pre have 1:55than what you would a wholesale deal and you're gonna make a little bit less 1:59on a pre have than what you would an actual or rehab 2:02a home that you're actually gonna do to the nines and it's gonna look good 2:05inside 2:06so that's all concept a pre avenues need to make sure that 2:10your home that you're doing is going to be rent already the cosmetic stuff is 2:14done and it looks good 2:15armed the the bad way to say this is your putting lipstick on a pig but you 2:20know that we have to do that very very extremely professional but that's a 2:23whole truth 2:24really what you're doing I do a lot of reacting the reason I do that is because 2:29we end up doing anywhere between 2:31225 these I'm off and we do this pretty much in the hunt 2:34business whenever the HUD homes a word on and actually I'm 2:38I'm taking you right here 20 HUD home and I'm getting ready to take you to 2:41more 2:41some issue 3 homes today mom on this particular deal right here 2:46com we are going to have about sixty two thousand dollars in every time that we 2:50pre 2:51free have a home we want to make fifteen thousand dollars on the home 2:54that's what we want to make every time that we pre have not only do we want to 2:58make fifteen thousand dollars on it we also have 3:01a budget to where we never go above eight thousand dollars on 3:05the inside for the outside I love the actual prefab so we're not gonna put 3:09more than 3:09om a thousand dollars into the entire project 3:13and we need to make fifteen thousand dollars on the deal hand 3:16still sell it extremely extremely cheap like 20 percent cheaper than anything up 3:20on the market 3:21so that it will sell in record time and then we can make a quick 3:24fifteen thousand dollars on every single day or so we do a lot of these 3:27got about four of them going on right now this particular home we are on 3:328365 Indian Mound this is a HUD home 3:35that we have just purchased so on the outside this pre have its kinda ugly 3:39to be honest with you it doesn't have very good curb appeal now the inside I 3:42love it is nice 3:43okay so the insider this is extremely nice so com we're actually going to be 3:47an hour the same for right about eight thousand dollars is our budgets 3:51okay we've got 62 n it so we're gonna our goal is to have seventy thousand 3:55dollars and and then we're gonna resell this 3:57for 89 9 putting us I spread about twenty thousand dollars soaring to 4:02change the outside of the colorless want to give it a a good feeling to pop 4:07it doesn't really match the brick right here are to be completely honest with 4:11you doesn't really match the break at all 4:13so we just need to go through and change the outside colors to give it that pops 4:17into whenever we do sell this 4:18home and we put this on the internet we advertises to our 4:22a buyer's list it pops it looks good and that's what we need that's what this 4:26home is lacking 4:27okay that's exactly what this home is like and so going inside here 4:31got a nice I nice door right here 4:34so we have a nice door right here I which is great 4:38carpet was in great shape in here I'm so there's not that much work to do 4:42to be honest with you the windows are in great shape I'm not that much work to be 4:46done in here but that is one thing that we're gonna do that as one cost thing 4:49that we're going to do that will 4:50extremely increase the value up this home but at the same time 4:55doesn't cost that much money and it all make the buyers just 4:58be an all okay now 5:01coming inside here you have the bathroom slashing launch around 5:07OKC got the bathroom he got a half bath slash longer-term 5:10in here nice flooring right here water here 5:14is right there and me from this is actually behind 5:17that not sure how much you can see because I'm there's no electricity on 5:21right now 5:22however that's that's about not gonna do anything in there think I've 5:26house first kitchen goes om this award right here's a little bit works 5:30okay so hard what they will do is they will go through and 5:34make things as protective as they possibly can so they put a piece a would 5:38love it if 5:38over so what we're doing in this thing sense since the wood is n 5:43not the best of shape okay for this area 5:46how what we're doing is that i'm gonna take you to a home number three 5:50and whenever we pre have that home and had nice hardwood floor throughout the 5:53entire 5:54on second half of this floral we took it out 5:58about home because it was missing some so we're actually transferring that 6:01would to this particular home 6:03mom and and just put in the wood there now this the cameras also nice in this 6:08home but 6:09you can see that the red cameras for would deter her 6:12a buyer from bias okay they would deter a buyer for buying a so 6:16will go through will put a new paint on these cabinets make them look good with 6:20the counter tops 6:20and that was just get these buyers absolutely love last 6:24I'm we will go through and I 6:27do nothing in the garage obviously I'd rogers & Raj I am 6:31to be honest with you were not even paying this one okay so typically on a 6:34pre have we will do a lot of paint 6:37carpet work and then we will just do a lot of cosmetics 6:40Mazza cock cosmetic stuff you know our 6:43your stuff in the kitchen the bastard just updated increase the value so we 6:47can 6:48make end up making fifteen thousand dollars and sell them and seven days a 6:52lot 6:52so in this particular home no pain were cleaning the carpet 6:55for painting the outside painting the a kitchen cabinets make those look good 7:00come on upstairs and you'll see here 7:03um kinda what this looks like home does not smell 7:06at all which is great I'm coming here to the bathroom 7:10no mere right here so we will probably go through and put a mere 7:14and this particular home only other home so we're going to take you to on the 7:18next house 7:19I'm just gonna leave I know mir's there but that's not a big deal to a buyer to 7:23be honest when they look at their site 7:25no mere I just go to Lowes and pick up a mere not a big deal 7:28you're really trying to change things on a pre have that's out the fires are just 7:32like home 7:33gosh I just cannot do that you know things that are really not that bad 7:37but they just look at in this is kinda just the terms 7:40nice bathroom all right here um 7:43say you got a nice bathroom ice bath tub nice big sank 7:47right here believe this is probably a 54-inch alright here this probably a 7:5154-inch 7:52a vanity right here what's a cabin space 7:55I which I do I as well I'm here you got another bedroom 8:00just gonna cleaners carpet as well sting great shape these are these hud homes 8:04these are the homes you can tell they've even vacuum the carpet 8:07inside here and that's why we buy a lot of these things are so many different 8:10tips and tricks by Ni sayings 8:12that it's not even funny I mean once you know the tips and tricks to bind these 8:15things and video on these things correctly 8:17arm you can just be deadly with so here's just another Hodges hall closet 8:22all right here so I'll gonna do nothing with that 8:26I'm and then we also have these two rooms right here I'm so 8:30I've got a pink room right here and we've also got a blue room right there 8:34probably kids room something like that but 8:36ran into anything to him because this is not going to give a buyer that 8:40do I'm not buying this saying this is not a big deal to a buyer 8:45okay this is not a big deal to a buyer you know just the whole pain 8:48aspect of because it is pain and nicely so what are you gonna do guys 8:53is I really all we're gonna do not paint the outside 8:57when painting kitchen cabinets were going to wash the carpet so we're going 9:00to get the party going on here 9:02we're gonna be and out eight thousand dollars unless 1/2 9:05up right at seventy thousand dollars or less in this property sellers think 9:0989.9% 9:10Thompson this area doing the 120 East to the single file for the market 9:14at 89.9% I've probably already got a buyer on my buyers less using the bars 9:18on fire 2.0 software 9:20and that's how we sell his property so doing pre hands can extremely 9:24a boost up your profits and make you a lot more money on these deals on again 9:29we do a lot of these deals 9:30each never seen them off I'm not just wholesaling kinda have to do you both 9:33have a good 9:34solid business I start of wholesaling once I started building up my capital 9:38then I started going through and do a lot of free having to what I want to do 9:41now 9:41I want to take you to house number two and then we've got house number three to 9:44go to 9:45right after that so check out house number two hi guys we're here at house 9:49number two now the first thing I want you to look at 9:52this is a home that we have opry have for sale would you look at we got one 9:56for sale sign out there this is a property that so 10:00we've obviously do all the white signs you know out in the yard we got busted 10:04on this home and I were not allowed to do it I and this and this area so the 10:08white signs in this aspect under we don't 10:11does not do it all right here okay so they're actually right there so 10:15if for some reason you cannot do why signs in your area which we have done 10:19pissed 10:19passes in Saturday's on you cannot do white signs in your area because maybe 10:23might be a nicer area 10:25put them in the Windows putting in the Windows you put anything in 10:29out the window so this is another pre have another home that we bought 10:33oMG and here it is so what we did inside here 10:36is we've got about two hundred seventy-five dollars in this free app 10:39now what is was with that to our son if I but actually three hundred fifty 10:43dollars 10:44cocaine is because we're doing something else too I immediately whenever we 10:48bought this property you can see here right up here 10:50%uh that drywall okay so this dry wall right here is actually getting fixed 10:55okay so this dry was actually getting fixed now when I bought this property 10:59you know literally a week ago om there was a whole there and then there was 11:04insulation right down here on the bottom 11:06house carpets and very pretty good shape okay the carpets in pretty good shape 11:10you can see hud even vacuum this carpet for me 11:13thank you very much fun %uh but anyways 11:17there's a as soon as you walked in and you never want this what buyers as soon 11:21as you walk in a hole in the ceiling that's what buyers that want 11:24so we decided free have this home change things like that so that the buyers were 11:29freaked out does not that big a deal just a piece of drywall but in a buyer's 11:33mind 11:33is a big deal UK so is big deal so we just pass out of 11:38got somebody here to pass a drywall other working on that as we speak 11:42they pass another Sheena driving right here did a little bit of 11:45%ah you know money right here up but this is this home is very very cosmetics 11:51and 11:51news just a little bit of drywall work so on less than four hundred dollars in 11:55this entire home nice power here 11:57got nice stainless steel appliances cats are nice 12:01just little things that you can do like the drywall that was a trove 12:05fire from this property and keep them to saint do I don't want that property 12:10you know 22 going through the same and that's a nice solid called 12:14this particular home we're getting to show each and every single day 12:17on so here's the dining area right here I was a woman dirty inside I'm not gonna 12:21lie to you its a little bit dirty inside 12:24you got a grudge right there okay so it's a little bit dirty inside so 12:29up we don't have much money and this 12:33but I just wanted to show you around just let you know what we've got going 12:36on so we're not gonna paint this home 12:37when I get a car for this home we're just getting the eyesores away from the 12:41buyers which was basically the drywall 12:43and I you come in here into the bathroom 12:47got a nice nice Vandy right there palm no mere us there were not even gonna put 12:51me right there that's a mere 12:53right here is not a big deal to acquire that you're going to get an extreme deal 12:57for its not that big a deal 12:59%uh the drywall it was all a big lie sources so we had to go through and do 13:03that 13:04I'll give you the numbers on this year's second federal one two and three 13:08you can see that nothing wrong with that nothing wrong with this federal nice 13:11carpet as well 13:12and then you've got a better number one and you'll see that white sign in here 13:16because again this is the very front love om 13:19the home not check out here look at my moms out here my mom look oh she's doing 13:23she has seen monkey yes iPhone 18 months to get me he didn't know that 13:28she coos a she's holding my monkey right now 13:33checked that out so what you doing here of the master you just have the 13:37about the master bath right here that was attacked again there's no mere in 13:42here 13:43not that big a deal but let me tell you one other thing that we have are doing 13:46to this whole 13:47since this home does have some drywall issues 13:51and whatnot we have been getting feedback from power fire since we're 13:54going about two showings today on us 13:56and I'll let me just say the numbers first K we have fifty nine thousand 14:01dollars in a song 14:02case we've got 59,000 were selling this home 14:07for about 75074 night so 14:10you can do the math on and see the spread and however 14:14on this is a killer killer deal on this area homes in this area go 14:17a little bit over into the hundreds okay now what we have gathered from all the 14:22showings was that 14:24these people this is not an issue to these people anymore cuz we fix that 14:28that's not that big a deal about all they gotta do is paint not a big deal 14:31for what we did see was that it's a little bit built inside I mean it's a 14:35little bit dirty inside I mean if you go in here 14:37I'm you can see that it's a little bit very it's a little better see all that 14:41is turning see this it's dirty 14:45it's a little bit dirty so what we decided to do 14:48was not only are we gonna fix at drywall but we're also going to go through and 14:52just get quite 14:53just bring it in here have somebody who got the water turned on 14:58just liver have somebody come in here and scrub this thing down. make it shine 15:02make it nice make a claim paid somebody I think 75 to 100 dollars to clean this 15:06entire thing for us 15:08and that is going to get one of those two wires 15:11okay that we get one of those two buyers to write contracts on it cuz that's the 15:15only thing that they're just 15:17that is distracting as a nice house not much to it though it's a killer killer 15:21deal 15:22okay it's extremely undervalued but it's just not clean inside we needed to fix 15:25eso 15:26guys doing perhaps I can tell you can increase the value 15:30a home for sure get viruses banging you 15:34to go through and by the sounds of you can make a lot more money 15:37doing these things and now what I want to do as I wanna take you home number 15:40sorry 15:42our guys we're here at the third a house and this is the third free happy 15:47you to recognize this house you're gonna recognizes house for a reason 15:50this was on our system Saturday session of seven days and so why should you all 15:55the different marking 15:56strategies that we used in order to sell every home in seven days or less now 16:01with this particular home getting ready to take you inside the show you 16:04what we did to this but I need to tell you why we did what we did to this soap 16:09this particular home we decide we got offers at this home for full price 16:13okay and we're gonna end up making about sixty five hundred dollars on this whole 16:16selling this home of 16:17what we realized cocaine and i ended up change my mind and not accepting any 16:21those offers because if I could do a pre have 16:24I can literally make anywhere between fifteen eighteen thousand dollars on 16:27this 16:28by just doing a couple things to this is increasing the value just a very 16:32short amount of time so as a society where shots 16:36roughly two weeks ago okay and we're here today 16:39and we're just about done we got two days from this thing being complete 16:43so I put in about a week I'll time you know with the higher the one here put a 16:47thousand dollars into this probably 16:49and then we're gonna increase instead of makin in over six thousand dollars on a 16:53whole song often make up to 18,000 that's why we did this 16:57okay so what that's why we did it so I want to take you inside 17:00I love this property so that you can see what we did to us so the first thing 17:03that we did you gonna notice is that the landscaping 17:06com we have changed okay so we did not you know do anything crazy to it however 17:10this 17:11is going to have maltz on okay so this is gonna have also here so we'll 17:14we clean this thing up right here UK so common insiders wanna show you what we 17:18have done 17:19onto the inside of this property so there's people here right now so 17:23om that's that we're gonna put a new railing 17:27up right here if you remember from last time it had hud's railing and there was 17:30just a two by four so that is one other things that we're doing 17:33of carpet and paint throughout this entire home so remember that whenever 17:37you are 17:38i doing these pre has you need to just make sure their rent already 17:42okay you're doing of cosmetic work to this so I'm you can see here that's how 17:47we've worked all of 17:48on the floor in up here was doing new carpet and paint up 17:51you know do new carpet in here actually putting new linoleum 17:55are right here inside here last time 17:58you're in this house we up as far as the cameras they're kinda 18:02outdated I guess you'd say their outdated but they just need a pain 18:05so weird we just pennies a white and then we're also putting 18:09om new hardware on new hardware does a lot 18:13to these job properties I can tell you that there were also put in a new 18:16a countertop so yes we did get rid of the orange countertop in here 18:21comp so that's it we're going to go out to the outside here in a second so 18:24that's inside here 18:26I'm just pain in the brick on here that's all it need to be done so it's 18:28just a lot cosmetic stuff paint 18:30carpet you change a counter tops a lot of cosmetics up to increase the value 18:35city even make another 12 twelve thousand dollars 18:38know literally just stuff I do a couple things a to this and that's why I love 18:42these preamps I so I crazy till 18:44to use bathroom you can see that is just painted I'm right outside their 18:48as well which is painted in there Scopus new caulking on their 18:51I everything there the times around everything me I 18:55everything's gonna remain the same com 18:58coming in here is just another one of the bedrooms mom 19:01it is an extreme system every time that we get into them to win the song 19:05is an extreme system we always uses color on the walls 19:09on this is a and antique white from from Williams 19:13then there is also a we also just use a somewhat lost in the mornings everywhere 19:16semi-gloss 19:17mornings doors everywhere is a white somewhat loss and then we always do the 19:22same call on wall that's what we found that everybody likes 19:25I'm so we do the same thing with here look at the difference 19:29it makes just by paying and from a buyer's perspective 19:32even know that we had offers on this where we're going to make you know a lot 19:36of money just 19:36also missing of this just a couple things that change the buyer's 19:39perspective 19:40where they go inside these homes in there just like that's a nice house 19:44I wanna buy that thing and I'll pay for that so the truth of it why we 19:48I ended up Donna Prue have on this home was that 19:52we realized thats 19:55even though that we could increase value and makes you know 19:59I anywhere like twelve thousand dollars XR on this property 20:02we can also still sell it cheaper than 100 headed up on the market for so 20:07not only are we gonna make more money since I bought a property in this county 20:11gonna go through and sell the SIGCHI from work what happened upon the mark 20:14for 20:15it's just they just fly off the market and that's why we do these perhaps so 20:19I'm downstairs here from this is %ah just being painted down here 20:23just about done you know I love what we did in here so if 20:26away actually adding to Windows these wonders complete Johnson ran into one 20:30does 20:31is what is called a couple hundred bucks apiece I'm right here so they cost 20:34couple hundred bucks apiece 20:36just a lot of pain that's it we're gonna put come through here with all new 20:39carpet 20:40a corporate is a one of our biggest expenses in here 20:43on because ills it ended up being about 127 yards of carpet scan because the 20:47size of the home 20:48I think are pretty handjob the fine on everything all ended up costing close to 20:53thirty five hundred dollars just in the soma long 20:55one thing you're gonna love why we increase the value of this home so much 20:58even though we're still gonna sell it cheaper than 100 21:01head up on March 4 still be able to profit you anywhere between fifteen 21:04eighteen grant 21:05taken notice right here I'm 21:09back when he saw this before this with this is extremely different 21:13we added a bathroom here we had a bathroom in here to increase by so when 21:16you came in here the last time 21:18this bedroom right here this was all one round 21:21okay if you remember rails there's a room over there and then it was all one 21:25room under the new shape 40 21:27well what I decided to do was I'm gonna make this to 21:30bedrooms down here so not only does it have three up top is going to have 21:34%uh two bedrooms downstairs while so we frame these closets and 21:38right here for you coming here tomorrow 21:41we just put a wall up basically there and then we put a wall up here to put 21:45these two clubs to make to 21:47a nice eyes cause us because you have to have our closet in order to make it a 21:51legitimate better 21:53okay so we ended up not only did we had a bat until we added 21:56to legitimate bedrooms are not making it a five bedroom 2 full baths 22:00they were still so much cheaper so when you coming here 22:04we do the same thing and here 22:07with this closet so this was all just one room with his friend and 22:11and we just made one our closet up 22:14making another better then up inside a 22:18love here this is where we added the 22:22the bathroom you know we had in the shower and hair so 22:25this is how a lot a huge selling feature in this is why we ended up free have the 22:29song because 22:30we saw the weekend increase take this from a so-so four-bedroom 22:35one and a half bath 252 and then we can still sell it cheaper 22:40inmates you know twelve thousand dollars more um that's why we do that so 22:44we just went through we at in the shower in here om 22:47frame that and they actually took a drain line 22:51right here they from the toilet say they actually took her from right there 22:54and we just made another shower out that so this this home is literally 22:58virtually almost done and %uh just within a couple days thats 23:02that's what it looks like so of 23:05that's a guys that's that's exactly what these 23:08these homes look like completely free hab but I remember it's not a full rehab 23:14okay so it's not a for rehab it is not a wholesale 23:17you just kinda making a rental ready to a lot a cosmetic stuff so you can see 23:21everything that we did in here in reality I 2013 with that come up 23:25coming back here pushy one more thing guy 23:30so you just do a lot of cosmetic stuff 23:33okay to make its rental ready 23:36you doing a lot a cosmetic stuff to make sure thats 23:39arm it will public somebody can be able to get 23:43up %uh financing on this not cash probably 23:46here's the last thing that we did to this privacy should check up right up 23:49here 23:50ennui we actually added a roof to the back love this house 23:53to the backers house we added the roof because in the last time 23:57it was very swayze in the middle were all that plumbing as it was very 24:01%uh the plywood was you know warped basically so 24:05we ended up going through and replacing the back to the roof because the from 24:08the reverse 5 24:09affront to the roof is is absolutely fine we're place a back to the roof 24:13on because we couldn't pay for the whole type for the roof we can pay 24:17you know seven thousand dollars in a whole roof stonov 6500 bucks 24:21get the whole rutan so we had to go through 24:24and just do the back in the room so that we could Benn out 24:28make it so that somebody can get financing on this 24:31and sell their property and sell his property and in no time 24:35so that is what a ninety-five percent 24:38free habbo looks like when in this ninety-five percent No 24:42I guy so that is what a pre have looks like ninety-five percent done you don't 24:46have to go through 24:47and I just keep in mind a pre have is not a wholesale deal 24:51it is right in the middle you're just getting a rental reading you're going 24:54through into a lot a cosmetic work paint carpet 24:57no sat in a couple features to it I you know adding the countertop in their pain 25:01carpet 25:01know do a couple cosmetic things and we put the closets and for to 25:05the half bath and didn't cost a lot of money you need to be and an outer these 25:09things 25:09eight thousand dollars or less need be making about fifteen thousand dollars on 25:13every perhaps it's a little bit 25:15I love more than where you can make it also deal and less than what you're 25:18going to make money 25:19legitimate rehab for you can turn this thing squid because 25:23the thing is a pricing investors out on the market on this investors can buy 25:27these things 25:28however you're making them extremely cheap I with the way the price um 25:32um into other retail market and it typically always going to get a finance 25:36biomass 25:37but I can tell you there that your for your profits or I'm really really big on 25:41the service this is the fourth one that we've got going on right now 25:44oMG you know a lot of people don't know that I knew this you know but we do 25:47just make our profits a lot fatter I'm and and do that so 25:51here's what I want to do I want you to comment on this video below and let me 25:54know do you want to know 25:56our formula okay to know whether we should really have this 26:00free have this for wholesale this of do you wanna know that what do you think in 26:03the system Saturday's 26:04a bit have a virtual assistant it out see you on monday and let you know 26:08bomb our formula if you comment on this video so 26:11that is today system Sarah hope you guys enjoyed it make sure the sign up for the 26:15systems are a city can keep getting these free now gets 26:17and %ah mouth see guys good