What’s the biggest rehab mistake you’ve made?

Question

Let’s be real, every investor’s got at least one rehab story that still stings. 😅 Maybe you trusted the wrong contractor, skipped an inspection, or blew the budget halfway through.

What’s the one rehab mistake you’ll never make again? Let’s help the next investor avoid the same headache.

Bruce Woodruff · Answer

Usually budget related.....even as a GC you can still easily go over budget. Very easily......

That and running over schedule. Which can push you into an unfavorable Real Estate market.....

Luka Milicevic · Answer

I've been rehabbing for a while and never made the "one" big mistake. What I have done on my first deal ever and see EVERY single new person make is way under budgeting their renovation expenses. I went 3x over my first house. Good thing is that the renovation was just small cosmetics so it wasn't bad, but I've reviewed budgets for first time flippers and their cost is usually half of what it should be. That's one common mistake that I see.

Gabe Waldrep · Answer

In the early days of operating in DFW, we would repair foundations without testing the plumbing after. This led to several properties having sewer leaks which turned into full sewer repipes on occupied houses. It's painful to see a house that was renovated and rented, to then be torn up by jackhammering through the slab in multiple places so that the sewer lines could be replaced. Then replacing flooring, repainting several areas, redoing bathrooms because the tub had to be pulled, and replacing cabinets that were pulled and damaged when removed.

It's not the one story, but it was definitely a painful, learning curve.

It's not the one story, but it was definitely a painful, learning curve.

Peter Mckernan · Answer

Budget or oversight. Not the biggest, but things to look out for..

1. Big ticket items for deeper review by GC: roof, windows, AC, foundation, plumbing, electrical and more..

2. Comps.. know your comps, if you buy it off the rec of someone else's numbers of what you are going to get, you should not be doing the flip.

3. Not having a lined up contractor to start day one, or a project manager. These delays can cost you a lot of money and time.

Katlynn Teague · Answer

Honestly buying a mid-reno house... it has become the biggest headache and money hole.

Wade Wisner · Answer

I had my biggest fix-n-flip mistake last year in NC area. I am a very hands-on person and particularly with rehabs, but I read a book from BP and decided to experiment with a fix-n-flip property 5 hours from my home. The property failed for 3 reasons:

1. I overpaid VA for the "As Is".

2. It had a crawl space with rot issues, and I didn't get an inspection up front because.

3. I have a recommended contractor (who was a flim flam man) who thought that he knew the crawl space and other issues in the house but didn't.

The deal turned out to be mostly a break-even fix-n-flip and needless to say I won't be doing an more rehabs at a distance. I have don't a lot of other real estate deals and ownership at a distance, but rehabs can just easily go wrong - even in my back yard - but at a distance everything gets complicated quickly and never to my advantage. Chalk that one up to never again.

Doug Clark · Answer

That’s a tough one, Wade. Distance flips can get tricky fast, especially when you can’t keep an eye on the work. Definitely a valuable lesson, appreciate you sharing it.

Doug Clark · Answer

I agree with everyone. It's why it's also important to have a large enough margin to allot some budget for unexpected expenses so you don't end up breaking even or worst losing profit on a deal.

Jaron Walling · Answer

We recently made the mistake of missing a damaged AC unit. The unit worked but the coils were damaged by dogs. The efficiency was terrible and it couldn't cool the house.

Added another $6k to the renovation budget.

What’s the biggest rehab mistake you’ve made?

What’s the biggest rehab mistake you’ve made?

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