Flipping Houses Ethics: Ethical Rehabbing

In wrapping up my article series on the ethics of flipping houses and real estate investing in general, I?d like to share a word on rehabbing houses ethically.

First, for those who may be unfamiliar with the term, ?rehabbing? a house is simply the act of making repairs and/or renovations to put the house into ?fair market condition? ? or, as I prefer it, ?like new? or ?better than new? condition.

The purpose is typically to build value into the property where value currently lacks ? either for the sake of equity or profit at resale.

When I rehab a house, I tend to go over and above, spend more and do more than your average real estate jockey.

When I rehab homes, I like to do them ?right.? I don?t cut corners or hide things that should really be fixed, and if you strive to be an ethical investor, neither should you.

If I encounter something that could be costly, I always explore all of my options as long as the final result will provide my customer, the ultimate homeowner, with a quality product. Though I?m not opposed to finding the cheapest way to get things done, I want the job done properly rather than just covering up defects which should really be fixed. And whenever I'm helping newer investors learn how to get started right in the house flipping business, that's exactly what I teach them.

Of course, just like settling all of your deals, rehabbing houses properly can be difficult at times ? especially if you find yourself working on a shoestring budget.

But in the end you have to sleep well at night. And you can sleep well knowing that you?ve virtually eliminated any risk of a lawsuit from an angry homeowner and created a good name for yourself in the community to boot by rehabbing something the right way. As with settling your deals, this type of reputation can go a long way, particularly if you are focused on rehabbing homes in a particular area. And shoddy work yields a shoddy reputation.

Lastly, I must caution those of you who know the types of rehabs that I do today not to get caught up in thinking that you must do full-blown gut rehabs to do them ?right.? This is just my preference, and I?ve told you in other articles why I personally prefer the ?gut rehab?.

You can do cosmetic ?paint and carpet? rehabs and still do them ethically as I?ve described. I still like to complete one of these myself every once in awhile, as it?s nice to get an easy deal here and there.

My main point is this. If you know there?s a leaky pipe in a wall that no one else can see, fix it! Don?t hide or gloss over necessary repairs, even if you think no one will find out for a long time. If you make this a business practice, it will catch up with you in one way or another.