Rehab and Repair expense question

[Amro Hamza]

Hello everyone,

Long time lurker, first time post.  Last year I ventured into real estate and purchased 4 homes to begin my flipping/rental journey.  I had worked with a contractor who did flat price rehab and repairs and never provided receipts for material.  I just paid them the agreed upon price.

In doing research online, repairs and rehab costs should be separate and so should material.  If I paid the contractor a lump sum (say $20k to get a house in flip condition), do I just write off $20k as a rehab cost?

Thanks in advance for the replies.

-Amro