How Do You Keep Rehab Costs Under Control on Your Flips?

[Deborah Wodell]

Hey everyone!

One of the trickiest parts of flipping houses, at least for me, has been figuring out how to accurately estimate rehab costs. It feels like there’s always a surprise—whether it’s skyrocketing material prices or finding something unexpected during the demo—that eats into the budget and profits.

I know there’s always more to learn, so I’m curious—how do you approach rehab budgeting? Are there any tools or strategies you swear by? And what’s one mistake you’d tell someone new to avoid?

Let’s swap tips—I’d love to hear your thoughts!

[Peter Mckernan]

I get quotes as much as I can before we close (sometimes this does not work). After the demo, there really is not much you can do to save outside of thinking outside the box on fixing whatever that might be that has come up. 

To save those costs, you might want to stick to some year build and older, for example, if you cannot do inspections on the properties that you are buying due to off-market deals or something else that is hindering you (all sellers I buy from do not want anyone in the home till we close). I would try to buy properties starting at a specific date so not large ticket items come up. For example, if you are buying in an area that is in are 1980s and above, you might run into a roof that is tile and the paper under the tile needs to be replaced the day you close. If that is the case, can you start to buy places that are built in the mid-90s to stay away from those big issues? The other thing could be tracking what you have had come up on the last 5-10 projects after closing, i.e. the water heater was at the end of life when we bought the last 6 out of the last 10 properties. Okay, let's allocate $1500-$2,000 for this repair that will need to be done.