Unexpected repair issues

[Sharon Patterson]

Have you ever encountered unexpected repair issues during a flip, and what was your approach to resolving them?

[Russell Brazil]

Yes on every flip Ive done. I went ahead and made the repairs.

[Kevin Sobilo]

@Sharon Patterson, any rehab is a "project" and basic project management principles state that there are 3 key interrelated aspects to all projects: time, scope, and cost. Often times you can (if you wish) adjust other aspects to compensate for a needed change.

An unexpected repair is a change in the "scope of work". So, you could just increase the cost of the project to pay for this repair. You could adjust the scope of work in another way to reduce the costs to compensate for this addition perhaps by using a cheaper flooring for example. You could increase the timeline and possibly save money by having other people do some of the work. For example, hiring a handyman to do some work instead of a contractor. 

So, you while many unexpected repairs are not avoidable, if you know where the flexibilities in your project are you can manage the project to completion by making these sorts of decisions along the way. 

[Michael Dumler]

@Sharon Patterson, is this a hypothetical question or an actual problem you're dealing with? If it's a current project, what is the repair issue? 

[Katie Smith]

Absolutely, unexpected repair issues are quite common during a flip, and having a solid strategy to handle them is crucial. In my experience, getting financing that covers the cost of rehab can be a game changer.

[Peter Mckernan]

Quote from @Sharon Patterson:

Have you ever encountered unexpected repair issues during a flip, and what was your approach to resolving them?

 Yes all flips/remodels etc you will experience this and they will always happen when you think it will go smoothly! lol. You will start to get the hang of it and put processes into place to stop or change the situation up, or just not buy the property because you know what they may run into. 

[Evan Polaski]

@Sharon Patterson, welcome to the risks of flipping.  And to echo the others, yes they always arise.  And yes, you need to find a way to handle them.  Actual approach is very much contingent on the issue and the timing on the project.  

If you are early in the project, you can often scale down other parts of the renovation to cover the cost, i.e. that terrazzo tile that would have been perfect is no longer in the budget.  

If it is later in the project, and most of the money is spent, well that is where reserves come in (hopefully those aren't blown through).

If you have more time than money, you go in and do work that you would prefer to have hired (i.e. cut new beds and put down mulch yourself versus paying the landscapers...).

[Bob Stevens]

Quote from @Sharon Patterson:

Have you ever encountered unexpected repair issues during a flip, and what was your approach to resolving them?

 Of course, , approach?????  You fix it, Not really sure what else to say? 

[Venson Nunnaley]

I usually put a 10% buffer in my rehab estimates to cover any unexpected costs that may arise.