Investor Ray Cusano figured the concrete block home in Arlington Hills would need $20,000 to $25,000 in repairs to be retail-sale ready.
It was less than other houses he’d walked through that day.
“It appeals to me to get in and out of a deal with the least amount of upgrades,” he said.
And, the listing price, $74,900, was not a bad deal, considering the estimated value after repair was $130,000. Though, he’d offer less, of course.
He’d update the kitchen and bathroom, replace the home’s 12-inch-square linoleum tiles, and paint it inside and out — there would be no more dark purple trim.
Cusano forgot to mention, though, what he’d do about the faded above-ground pool and weathered deck in the backyard. And his instructor, Cameron Gaskill, didn’t give any hints, either.
The home was a final exam for the 80 or so students who took part in the Jacksonville Real Estate Investors Association’s rehab Boot Camp and Bus Tour.
The annual three-day course taught budding real estate investors — and a few seasoned pros like Cusano — how to size up rehab deals.
The first two days were spent in the classroom learning how to find rehabs, estimate repairs, perform the work and secure financing.
“Some people think they can’t do this because they have no money,” said Gaskill. “But, you don’t have to have a pocket full of money to buy a house.”
On the final day, students boarded a bus and toured six Jacksonville homes in various stages of renovation.
A few were houses only a true investor could love — with plywood replacing missing windows, a blue tarp nailed to a leaking roof, missing ductwork, light coming through rotted wall sheathing and rooms with no cabinets, appliances or finished flooring.
In one Riverside home, the gutted kitchen was the size of a large closet.
“You couldn’t throw a cat in this room,” student Peggy Richard said when she saw it.
As the students paced through, they snapped pictures, took notes and compared assessments. Instructor Melissa Marro drew attention to problems.
“Did you notice there’s no back door in this house? That’s a fire hazard,” she said. “You won’t pass inspection unless you put one in. So, figure out where it should go.”
To decide whether to rent or flip a home, look at the neighborhood, Marro said. Junk cars parked on lawns? A rental. Manicured landscaping? A flip.
New investors often have some experience in real estate. But there are gaps in their knowledge.
A common mistake, Marro said, is not paying attention to details. Missing doorknobs, cabinet pulls and light fixtures seem small, but add up quickly.
“If you pay $30 apiece for 10 doorknobs, that’s an extra $300 that’s not in your budget,” she said.
New investors also struggle in their judgment calls, Gaskill said. One of the biggest problems is simply buying the wrong house.
“You have two extremes — analysis paralysis, where you overthink the deal and the house sells to somebody else,” he said. “Or, you’re overly excited, and you buy when the numbers just don’t work.”
Gaskill, a 20-year renovation contractor, admits when he began investing, he over-analyzed.
“I missed a lot of houses,” he said.
That fear is also what has stopped students Shannon and Adam Niemiec from picking up a rehab deal.
The couple began investing 10 years ago as wholesalers, which means flipping a house to another investor.
They returned to wholesaling after the recession, but haven’t leapt into rehabbing yet.
After the $299 JaxREIA boot camp, the fear of doing so is gone.
“It’s been life-changing,” Shannon Niemiec said. “It made me realize, you don’t need to know it all to do this. You just need to know the people who know it all, and put those pieces together.”
For the Niemiecs, a young couple who want a flexible lifestyle in which to raise their kids, the course taught them how to think like investors.
For Cusano, an investor since 1991, the payoff was different.
“I try to get the broad stroke of what the trends are,” he said. “I hadn’t done a bus tour in Jacksonville for a long time.”
Two homes on the tour that were already rehabbed gave Cusano new ideas on styles and color schemes.
Also, Cusano was impressed by one Arlington subdivision on the tour. The 1960s-era homes have floorplans more adaptable to today’s modern layouts, he said.
“It has opened my eyes to that neighborhood,” Cusano said.