Renovation Gurus

Real Estate Investor Rehab and Residential Renovation and Remodeling

Category: Uncategorized

Will your next Real Estate Investment be a Flip, or a Flop?

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Is it a Flip? Or a Flop?

During a flip there are often problems not foreseen at the beginning of the project. These problems often cause issues with timelines and cash flow – two things that investors don’t like and things that can cause a project to sink.  The difference between a flip and a flop is often the contractors you use to get the job done.

We recently worked with a new investor client on a rehab and found some issues. This created problems on all sides, but the good news is we all worked together to overcome the issues and get the job done.  We have shared their letter and testimonial below.

If you need an investor friendly whole home rehab company, please call Renovation Gurus today. We want to help you through your next project or flip.

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Hi Roman,

I (Marcus Thomas) just wanted to make sure you understand how grateful we are that you were able resolve all of the issues we had today. I’m sure you can imagine all of the scenarios running through my mind as my wife kept me updated on the communication issues she’d been having over the past month. We were certain that partnering with Renovation Gurus was the right choice and glad to pay to leverage your knowledge and experience but the service and value did not seem to be as advertised. Alot of things were extremely difficult to stomach and the plumbing misunderstanding had us broken emotionally. But as always, it seems there was a bigger plan that we could not see. Had those things not happened, it would have been highly unlikely that we would have been aware of the issues you found before it was too late. I cannot imagine what we would have had to do if we could not sell the home. Words cannot express how thankful we are.

Beyond the gratitude, our perspective on this whole experience has changed due to your initiative. The distinguishing quality of great people and companies is not perfection but the ability to handle adversity with integrity. Had this whole rehab gone smoothly from start to finish, we would have indeed been happy but the resulting testimonials and reviews would not be as passionate, and our referrals not as solid. You have not only earned our business but our trust.

Additionally, we now feel better educated to work with Renovation Gurus going forward to mitigate the issues we encountered with this flip. I would love the opportunity at some point when this flip wraps up to give some feedback on our experience; it may give you some ideas on improving your existing processes and systems by getting inside the mind of another new investor while its still fresh. Just let me know.

Grace & Peace,

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Making Sure Your Contractor Writes a Bid That Protects You

Ron Carlson explains how having a contractor write a bid correctly can protect you if things go south. By being detailed in the work that’s being done, there’s transparency for both parties.

Click below to watch the video and learn more about why the bid writing process is so important, especially if you run into issues with the contractor. By having everything detailed out in the bid, it’s clear of what’s owed by both parties.


Picture of a chalk board and Ron Carlson with a lesson on real estate investing with contractors



How to Focus on Real Estate Investing


Or maybe you are like most real estate investors and you feel like all three at the same time?

Let’s be honest, the reason you got into renting houses, flipping houses, and such is that you want to make money. You are a real estate INVESTOR. Unfortunately many times a real estate investor gets so caught up in being the landlord or repairman that they can’t focus on their primary purpose. This means they are spending time fulfilling tasks that shouldn’t be a concern instead of finding the next investment and running the numbers to see if it is a good deal.

There are also others who direly want to get into real estate investing but they know nothing about evaluating a home’s true condition, much less how to repair one. Or perhaps they don’t want to get involved in managing properties and tenants. Therefore many people who might be great investors avoid real estate altogether – despite its’ potential returns.

Buying, Renovating, and Selling Real Estate Investment Properties for Landlords
Don’t Get Caught in the Middle

So the trick to being a great real estate investor is to stick with the investing. Don’t know much about construction or can’t find dependable contractors for a good price? Find a company like Renovation Gurus that specializes in home renovations for real estate investors. Renovation Gurus provide whole home rehab at an affordable price. No need to deal with schedules, contractors, etc. Renovation Gurus takes the pain out of real estate investing.

Renovation Gurus can provide a full detailed listing of problems in a home as well as a price to repair all issues. No problem is too big, Renovation Gurus handles termite damage, foundation problems, roofing issues, hoarder homes and more. No job is too big or too hard.

The best part about sub contracting the work out to a company like Renovation Gurus is that they are really fast, as well as professional, insured, and licensed. Using a company like Renovation Gurus lets you focus on real estate investing without having to worry if you found all the problems with a home, if construction is on time or on budget.  Instead you can focus on the buying and reselling.

Warren Buffett told CNBC that “If I had a way of buying a couple-hundred-thousand single-family-homes, I would load up on them. It’s a very attractive asset class now.”

Despite the upwards potential, investors everywhere are scared of buying homes because of lack of information or skills. Have you wanted to invest in real estate or are you a current investor but keep getting caught up in the middle? Let Renovation Gurus handle the process for you so you can focus on what makes you successful and what makes you money.

How to Find Investment Properties in Texas

Are you new to real estate investing and having a hard time finding good deals to buy?  Or are you a seasoned investor having a hard time getting new inventory in today’s hot market?

Investors often get discouraged because of a lack of inventory in North Texas or it is purchased literally minutes after they find out about it.  Many investors and flippers get upset and begin to believe their town is too small to flip homes or too big and competitive.  Even though every market and area is different, there are almost always good real estate deals to find and to flip.

Below you will find some of our favorite methods for finding great real estate investment and property deals.

Photo of a billboard that reads Property NOT For Sale



HUD and VA Homes –

HUD stands for the Department of Housing and Urban Development.  HUD helps provide housing for lower income families by providing lower rate loans.  It also enforces fair housing laws.  There are many other things which HUD does as well.

VA stands for the Department of Veteran Affairs.  Like HUD, they also help provide lower rate loans to help veteran’s and their families obtain housing.

Like with normal bank financing, there are also HUD and VA homes which go into foreclosure.  They are usually referred to as government foreclosures.  A HUD property is a house with a FHA (Federal Housing Authority) backed mortgage that goes into foreclosure.  Likewise, a VA property is a VA backed mortgage that went into foreclosure.

Most HUD and VA foreclosures are extremely cheaper than comparable market properties.


Distressed Deals 

Ever had foundation problems or roof leaks with a home you have owned?  Or perhaps ran into a hoarder home or mold during a property flip?  These issues can be a real pain and potentially expensive.  Especially when you run into several of these issues at the same time combined.

Properties that have roof or foundation issues, fire or water damage, tornado damage, back taxes owed, hoarder problems, animal or pest infestations, etc. are defined as distressed properties.  A distressed property could also be a home that is just really ugly or needs a tremendous amount of work.

Often owners of distressed properties are overwhelmed and don’t have the time or finances to fix the house.  Or perhaps they have inherited a distressed party as part of a trust or will.  Trying to sell a distressed property through conventional means is very difficult and few people want to even view the house, much less consider the cost to rehab it.  It would cost the average home owner far more than a professional contracting company to renovate the home.

A home investor however can use a great home renovation company, like Renovation Gurus, to quickly turn the impossible into a positive investment.

Distressed property owners often have to sell and sell quickly.

Bank Owned Properties – Major U.S. Banks are motivated to sell their foreclosure properties.  Why?  Because when a home is in a banks inventory there are fees due each month called “carrying costs”.

Carrying costs include items like insurance, maintenance, taxes and more.  If a home isn’t maintained or checked on, it could become a target for squatters.  Additionally, if a home isn’t maintained it may look or feel abandoned and is more likely to fall prey to vandalism.  Theft is very probably too as copper prices continue to rise.  A copper thief can quickly cause thousands of dollars of damage to a home – and the bank has to cover these costs and risks!

The longer a house is tied up in inventory the more opportunity costs the bank incurs.  For instance, instead of $100k being tied up in a house that isn’t moving and is costing money – the $100k could be loaned out to a business with good credit and make a good annual percentage return.  So instead of having their money on the street earning more money – the money is tied up in a house and costing them money.

Banks are therefore likely to sell a home quickly and at a deep discount if the property has been on the market for any lengthy amount of time.


So if you are a real estate investor and are having a hard time finding inventory, or affordable inventory – try these methods to find quality homes at affordable prices quickly.  And remember, if the home needs considerable repair, consider Renovation Gurus to come in and handle the rehab for you and thus save you peace of mind and time.



Flipping: What Repairs Are Most Important?

Are you looking at flipping a house and worried about what repairs will pay off and what repairs will be a waste of money?

It’s true many repairs are expensive and result in little if any return on investment.  However, there are other repairs that are extremely important to increasing your return and helping the home to sell quicker.  A quick sell avoids monthly fees that can be costly to the bottom line.  The choices you make during renovation will determine the amount of money you make in the end.

According to Remodeling magazine’s annual cost vs. value report, some of the best renovations are those done on the exterior of the home—siding, paint, window, and door replacements.  This is because exterior renovations can immediately improve a home’s curb appeal.  Curb appeal should never be underestimated.  It can make a potential buyer fall in love with a house before ever stepping in.  The first impression is always the most important.  Buyers usually believe that homes that are properly maintained outside, will be properly maintained inside as well.

Renovation projects with the BEST ROI:

Attic rooms: According to Remodeling, you’ll recoup 73 percent of your investment when turning the attic into a bedroom. However, this also ranks as one of the most expensive projects, averaging $50,148 nationally. An additional bedroom adds square footage and any extra square footage will increase the selling price.  Extra attic space could also be turned into a media room, office space, or even a playroom.

Paint: Paint is a cheap and easy upgrade. If the walls have a lot of minor flaws in them, use flat paint. Otherwise, use eggshell. Always use earth-tones for best wide audience appeal.

Kitchens: Kitchen remodels return only 66 percent on average.  However, kitchens are typically the first room a homebuyer looks at.  Kitchen remodels can be expensive for typical homebuyers and an outdated kitchen can scare buyers off.  For flippers, getting a great contractor with great pricing and access to high quality materials at a discount is important.  Just don’t go too far with a kitchen remodel as you don’t want to price your home out of the local market.

For instance, you don’t want to gut the kitchen if it is in decent shape.  Sometimes basic updates like upgrading appliances, putting in new, brighter LED fixtures and refinishing surfaces works well enough.

Baths: Investing in a bathroom remodel yields a 62 percent return on average.  The first thing to consider is to increase the size of the bathroom.  A full bathroom is more desirable than a half bath.  Potential buyers like larger master baths with two custom sinks and a custom shower with bright lighting and mirrors.  Again, bright lighting can go a long way.  LED fixtures are cheaper now than when they were first introduced and can make an immediate impact.

It is important to get help or pay attention to the latest trends in decorating.  Bathrooms can easily look outdated so you need to make sure you have a good, modern plan.

Flooring: in most flips, it is advisable to use laminate hardwood flooring in the major living areas, and carpet in the bedrooms. Laminate hardwood flooring is
difficult to tell apart from real hard wood. It is not only more durable and scratch resistant; it is also less expensive.  Each house is different so be open to ideas (stained concrete, alternative floorings, etc.).

Landscaping: It is amazing what rocks, trees, and shrubs can do to increase the perceived value of a property. A good rule of thumb is to budget 1% to 2% of the final expected sale price of your home for landscaping.  Plant a couple flats of fresh flowers the day before putting the house on the market. This simple, inexpensive final step can help put extra cash in your pocket.

Back patio: The patio is an often overlooked but very important area. A simple $1500 deck with two chairs, a small table and a couple of glasses sitting on the table paints an awesome picture in the head of the potential buyer.

A picture of an upside down house

Renovation projects with the WORST ROI:

Home offices. A number of people work from home, but most don’t need a full-blown office. If you do convert a spare room to an office, opt for removable furniture rather than built-in cabinets. Built-in furniture gives the buyer fewer options with what they can do with the room. A home-office remodel recoups only 43 percent, on average.  It would be better to leave the space open so the buyer could convert it into a room that suits their needs.

Sunroom additions: You may recoup some if you live in a region where the sunroom can be used all four seasons, but in most cases, adding a sunroom will get you nowhere near a dollar-for-dollar return. Sunroom additions were among the lowest on Remodeling‘s list in terms of recouping costs—46 percent. Rarely do homebuyers list a sunroom in their top three desires when house shopping.

Garage: Other than paint, do not spend much money here.  A few cheap hooks for tools, such as a rake and shovel work great.


What’s popular now changes about every five years—contractors call this “stylistic depreciation”—so consider the latest stylistic trends.  Check out the local do it yourself centers for design ideas.  Read magazines and catch up to date on the latest.  Many people believe they are great designers but honestly there is a reason potential buyers turn their noses up when seeing the results.  Ask others for input and list your strengths and weaknesses.  If design and managing contractors is not your strength – get others to help.

Also, don’t get carried away and do too many renovations. When you are done remodeling the home, it should have a price on par with other houses in the neighborhood.  You shouldn’t be flipping the most expensive house on the block.

Most importantly, if you are a real estate investor your time should be spent on finding the next house to purchase and flip and arranging financing.  You don’t want to get too involved with renovations (especially if that is not your core strength).  Some investors have a great do it yourself attitude, but the truth is an outside company with contractors can often get better pricing on both material and labor.  A great renovation expert can save you time and money and get the job done right the first time.  They will also be aware of the latest design trends and are also very quick.  If you would like to help from the best in the business, call Renovation Gurus today.

Investing Hard Money in North Texas

What is Hard Money?

Are you interested in Real Estate Investing but confused by various financing options and terminology?  Have you heard the term “Hard Money” but not sure what it means?  Ever heard the idea of getting rich with “other people’s money”?  Well, Hard Money is something along those lines but no money is ever free and a hard money loan is like any other loan – there are important characteristics you should understand and which could be costly.

One way to think about a hard money loan is this, a real estate investor may have time to find a home, rehab a home, and sell the home – but not a lot of capital.  The hard money lender may be someone who has very little time but may be very wealthy with plenty of capital and looking at taking on a higher risk for greater reward.  Hard money loans are methods of bringing these two entrepreneurs together.

Hard-Money-Sign-Fort Worth TX

Imagine a bank or traditional financing method.  They will loan you money based on the price you buy a home, not what it could be worth after repairs or including the money to make those repairs.  Traditional methods are also very slow and not flexible.  Traditional methods consider your credit history, your income and more.

Hard Money loans are typically private loans from a private investor vs. a bank.  They are favored by real estate investors because obtaining hard money from a private investor can be faster and more flexible than more traditional methods.  Additionally, some homes do not meet conventional underwriting guidelines.

Hard money loans often go by several names or variants such as:

  • Cash out Loan.
  • Rehab Loan.
  • Bridge Loan.
  • Asset based loan.
  • Buy, Fix, and Sell Loan.

When To Use Hard Money

There are many different situations in which hard money is a great option if available to the real estate investor.  Most important is speed – many deals are made or lost based on time and having financing lined up.  Hard money is also a great option on distressed properties.

Hard money loans are great for taking a “cash out” or when being used as a “bridge”.

A good real estate investor has to be able to move fast on quick deals and often needs cash in hand.  Additionally, the real estate investor may need money to borrow to repair or rehab an ugly or distressed home (think bad foundation, bad roof, termites, hoarder home, etc).  This is where Hard Money Loans become important.

How Hard Money Loans Work

First, all hard money lenders have different rules and requirements.  The following is a basic guideline of how many will operate.

There are three basic numbers you need to know (or have a really concrete estimate of):

  1. What are you buying the home for?
  2. How much will it cost to rehab / repair the property?
  3. How much should the house sell for after repairs (ARV – after repaired value)?

If you are new to real estate investing, number 2 and number 3 can be scary.  You have an idea but without a track record and experience you only have a semi-educated guess.  This is why hard money lenders prefer investors with a positive track record.  The more homes you have flipped with them and the more money you have made with them, the better your loan terms will be.

The hard money lender will loan you enough money to cover the purchase price of the property and will sometimes include rehab funds and all carrying costs including interest typically for 6 months.  Six months should be plenty of time to bring a property back to market as a sale property or rental.  If not, hard money loans can be a bad idea.

The lender will balance their risk typically with a first lien on the property.  Therefore they are protected by the equity in the property.  This means the borrower’s job history, credit history, assets and such are less important.  So the amount of equity for each specific deal is extremely important because that and your track record will make the lender more comfortable with a hard money loan.

Different lenders will operate in different ways.  Some may loan a percentage based on the appraised repaired value, or just a percentage based on the purchase price. It is better to find the lenders that will loan on appraised repaired value. Most will loan no more than 70% ARV.  There are three important numbers the hard money lender will share that are important:

  1. Loan Points.
  2. Closing Costs (Escrow Fees, Document Fees, Notary Fees).
  3. Interest Amount.

The best way to explain this is with an example.

Sample Loan Amount Calculation

  1. Purchase price = $70,000
  2. Rehab budget = $30,000
  3. Total capital = $100,000
  4. ARV = $120,000 (amount house should sell for after repairs)
  5. 70% of ARV = $84,000 (amount of loan)
  6. 5% down at closing = $4,200 (“points” the borrower has to pay for getting to use the lenders money).
  7. $500 document fees (to pay for paperwork processing and filing fees).
  8. Some loans may have an interest only balloon payment when the home is sold or 6 months is up.

If the loan amount is less than 70% of the ARV, the investor may be able to borrow money for the repairs as well.


Here’s the typical hard money lending process:

  1. Talk to the private investor or hard money lender.  Find out what they need to qualify you, how much they would be willing to lend, and what types of deals they prefer (usually whichever ones make the most money the quickest).
  2. Find a good home for sale that you think good money can be made on and put it under contract.
  3. Talk to the lender again and inform them of the deal you found, the sell price, the cost of repairs you have estimated (make sure you add some wiggle room), and what you believe the ARV should be.
  4. Typically the lender will either send out an appraiser or have you get the property appraised from an approved list of appraisers.
  5. Documents – at this stage, various escrow documents and more may be required.  The less experience you have with a lender, the more that may be required.
  6. Decision time – the lender will agree or not to fund the loan and if agreed should provide the amount and their terms.
  7. Close the loan.  This is just like a typical loan at a title company.  The loan amount is in escrow at the title company.  The title company ensures all paperwork is completed correctly and timely and will issue checks as needed.

real estate investing hard money

How to Find Hard Money Lenders

There are many sources of hard money.  A simple search on the internet may turn up several local lenders as well as many online directories of lenders.

  • Specialized Hard Money Lenders
  • Individuals or group of individuals
  • Mortgage pool or investment fund
  • Self-directed IRA
  • BiggerPockets hard money lenders directory.
  • Attend a local real estate club meeting and find out from other investors who they have used successfully.