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First real estate rehab sparks debate

Diary of a real estate flipper

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Last week, you may remember, my partners had nixed my first rehab candidate, a small house in North Newark, arguing that the neighborhood was too shaky. (The house is at www.gsmls.com, #2083653; as a non-member of the MLS, you can find it by searching for $175K houses in Newark City in Essex County.) Anyway, I asked readers to comment on the house – and boy, am I glad I did! I learned more from the dozen e-mails I got than I have in weeks of walking around my target neighborhood. The general consensus was a) I don't know what I'm doing; b) the key to a successful rehab is not selling high, but buying low; and c) the neighborhood should be judged not so much by absolute standards as by the direction it's moving in. Those points are important enough, I think, to look at one by one. a) I don't know what I'm doing. As Paul, an experienced flipper, put it, "you play the game like an amateur." There's nothing I can do, really, but concede this point. I have overseen renovation...