Rehab Mistakes you need to Avoid as an Investor

Oct 16, 2013 by

There are certain mistakes that can eat up your profit when you buy properties.  Take a look at the most common rehab mistakes investors make.

Top Rehab Mistakes Investors Make

  1. Purchasing the property for too much.  Paying too much for a property undermines your entire intention of generating a profit.  Know the local market, the cost of repairs, and bid accordingly.
  2. Buying a property that has structural damage.  Always have homes you are interested in inspected for structural damage as structural repairs are costly.
  3. Not properly estimating the cost of repairs. Repairs will eat into your profit margin, and you want to make certain you calculate the repair costs accurately.
  4. Not performing a termite inspection.  Termites can cause terrible damage to a property, and damage that is costly.
  5. Not getting quotes from more than one contractor.  Obtaining multiple quotes on all repairs is important.
  6. Forgetting to have an exit strategy.  Always prepare for the possibility that you may not get the home sold.  Have a backup plan.  Will you wholesale it?  Rent it?  What will you do?
  7. Having shady contractors perform the work, which could end up costing you more in the long run.  Be sure to hire licensed and experienced contractors.
  8. Not marketing the home properly.  You want to get the home sold fast so your profit isn’t eaten up by monthly mortgage payments.
  9. Not rehabbing the property to BUYER standards.  Your goal is to fix up the home and turn it quickly for a profit.  Fixing up the home to YOUR liking is always a mistake.  Make the property marketable and get it sold.