What’s Your Most Valuable Lesson From a Rehab or Flip?

Question

Hey everyone,

I’m curious — what’s the single most valuable lesson you’ve learned from rehabbing or flipping a house?

Maybe it’s a tip on managing contractors, spotting hidden issues before buying, budgeting tricks, or creative ways you added value without breaking the bank.

Or maybe it’s a mistake you made early on that changed how you approach projects today.

I’d love to hear your stories, successes, and even those “learning moments” that helped you become a better flipper.

Let’s share insights so we can all improve our rehabs and flips!

JD Martin · Answer

Don't over improve. Know your market and what you will and won't get paid for. This is really tough for a lot of people starting off, who tend to overspend on things you can see and underspend on things you can't - and that should usually be reversed given the choice. Remember that the quality of your finishes will always depend on the quality of the substrate.

Lateefah Mathews · Answer

Hey Ellisa,Going into a rehab, one of my biggest lessons has been to walk the property with a contractor, yes, but get a pre-inspection from a certified inspector before you start work, period. Even the best contractor in the world can miss things that a property inspector will catch.

If you’re flipping, your buyer will likely get their own inspection, and you don’t want surprises on a rehabbed property that weren’t in your contractor’s SOW, so it’s better to find and address those items early.

I now add major inspection items to the SOW up front, which cuts down on change orders and can save thousands.

Alan F. · Answer

Be generous to the neighbors, they can be valuable allies for the security of the house and possibly lead to referrals.

Jules Aton · Answer

Great points. My most basic thought is that the money is made when you buy not when you sell. And in most cases a quality neighborhood is worth the premium.

Dan H. · Answer

#1) Higher psf areas have the potential to add more value. A year ago I did a rehab in an area with ~$2k psf value. I added a half bathroom using existing footage. Comps show this half bathroom added $50k value. How much value do you think a half bathroom added can add in a market where the psf is $100?

#2) Older properties cost more to rehab. Lathe and plaster is difficult and heavy. Plumbing and electrical work is expensive. Replacement windows are expensive. Older units need more work. good luck

Mark Cruse · Answer

Its hundreds of things to know, and hundreds of moving parts to make any project go sideways. its hard to say what is number one. However, a huge one is knowing your numbers. That impacts it all. if you don't, you most likely fail. Know your comps. If you don't know what it will sell for. your imaginary number can sink you. Same with knowing your ARV. If you are 100k off, a loss one way or another is at your feet. Understand your budget. If you are 50k off, that is on you. Understand how to incorporate time into your numbers (budget). If you think it will take you 3 months but it takes 9, the holding costs and over runs can triple your expenses. Understand how much it will take to get it done. Understand how much the repairs will cost and what it takes to make it happen. What are the numbers for your trades, construction and contractors? What are the numbers for unknows? in terms of what you set aside. What is the numbers for your permits? It goes on and on with the numbers.

Sultan Ali · Answer

For me, the biggest lesson was to build in more time and budget than I think I’ll need - almost every flip I’ve done has had at least one surprise that cost extra. I also learned that having a reliable, go-to crew is worth its weight in gold. It’s tempting to chase the cheapest bid, but in the long run, consistency and trust save you money and stress.

Andy Sabisch · Answer

I would comment one thing on Lateefah's post. Many inspectors are jack of all trades and master of none. I have yet to see one find an issue that a tradesperson would have missed. We have gotten good at walking the property and figuring out the reno costs but for things such as the roof, HVAC and at times electrical and plumbing, we call the trades people we use and they come out usually at no cost since they know they will be getting the work. If we see the electrical is suspect, we figure a total rewire in teh estimate. Same with plumbing - old galvanized pipes or jury rigged additions, plan on a total re-pipe. The thing with inspectors is that what they are required to have varies by state and many simply require online training and you are off to the races . . . if you doubt that, do a search for home inspector training and you will see the training and software that prompts the inspector to look at specific items and generates a canned report in under an hour.

What have we learned? The biggest thing is to ALWAYS include a contingency in the estimate - we use a minimum of 10% and more if we have unknowns. Jobs will always run over and finding out you are underwater is not where you want to be.

The other lesson is to never over improve a flip. Sure granite counters and real hardwoods make a heck of an impression but if the area does not support the expense, you will have a hard time selling the property on a flip. Remember, everything has a price - for some it might be $0 but the issue is will the price be what you need it to be at the end.

What’s Your Most Valuable Lesson From a Rehab or Flip?

What’s Your Most Valuable Lesson From a Rehab or Flip?

Most Popular Reply

8 Replies