Rehab Pitfalls...coulda shoulda woulda

[Chris Sills]

Hello Everyone,

I would like to hear from the new to seasoned investor about the rehab pitfalls you have run into. That One thing you wish you had of known before you started or that "A-HA" moment. Things that would have saved you time or money.

Try to keep it short but informative, I hope everyone learns something. Thank you

Chris Sills

[Jaden Ghylin]

Pitfall 1: Hire a thorough inspector to go through the place after you've rehabbed it to give you an idea of what a buyer's inspector is going to find. Try to repair as many of the findings as possible to minimize the "red flags" to potential buyers. Inspectors flag the goofiest things (i.e. bird nest in attic is a health hazard, etc.) that can absolutely kill a deal especially with a first-time homebuyer.

Pitfall 2: Don't ever tear into a wall or ceiling unless you absolutely have to. Use paint, tile, texture, whatever to make walls look nicer, tear them down as last resort. All these flipping shows love to tape people with sledge hammers ripping walls down. Usually it's not necessary and has the potential to expose a lot of problems that would have been out of sight/out of mind had the wall never been opened up. I tore a wall down in one of my rentals to learn that I now had to bring the entire room up to code, meaning new arc-fault breaker, new 3 wire romex everywhere back to the breaker box, additional outlets to reduce spacing between outlets, wired in smoke alarms, etc. What I thought would be a small wall project exploded into a huge electrical project due to code. Know your code before starting any major rehab!

Pitfall 3: rent a large roll-on dumpster and get it as close to a door or window as possible before you start rehab. This will save tons of time walking back and forth and keeps the place as clean as possible during the rehab. I made the mistake of "saving money" by not getting a dumpster a couple of times and I assure you that you will pay for it in the end with labor and dumping costs.

Pitfall 4: Do NOT let a realtor or anyone else associated with selling retail properties look at the place before the rehab is at least 95% finished. For some reason, Realtors just cannot imagine what a place will look like when it's finished. Don't try to get a market value estimate until it's finished, because it will almost certainly come in low. I made this mistake and just wasted my time along with the realtor's. I got an estimated value 20% after rehab being finished than I did during the rehab (even assuming that it would be finished to retail quality). The property then sold in 3 days for this higher value.

Pitfall 5: Reuse cabinets whenever possible, but do not paint them by hand with a brush or roller (this takes forever to get everything inside the cabinets painted.... days....). Spray them with a professional quality paint gun (or hire someone else to do it). You can paint cabinets white inside and out with 2 coats with just a couple hours of labor. This can save thousands of dollars vs. buying new cabinets and can actually look pretty good depending on the price of neighborhood your selling in.

Pitfall 6: Do not ever buy cheap paint. Cheap paint is very expensive in the long run. You will use more of it, be forced to put on multiple coats (as many as 4) and end up with crappy paint on the walls. Buy the good stuff right away and put 1 coat on if possible. I like the Behr stuff with primer in it. Works pretty well with 1 coat.

Pitfall 7: Don't install carpet until just before the first open house. Keeps it clean and new carpet smell is great for showings

Pitfall 8: Whenever possible, keep the baseboard trim, label them so you can remember where they go, paint them and reinstall with a pneumatic brad nailer. Trim can be expensive and usually painted trim looks pretty good. Also, the old trim is already cut to length for you so it reduces labor. Paint with a professional-grade air system.

Pitfall 9: Do not try to laminate over the counter top or the cabinets. Buy a new countertop that looks like granite they are very cheap ($200) and look quite nice. They are also very easy to install. Don't laminate cabinets, just paint them or replace them.

Pitfall 10: Don't do mudding/taping of sheetrock yourself. This can be very time-consuming and is not fun. A professional can do it 5 times faster and 5 times better for $10-$20/hr. Go live life and let a skilled professional do the dirty work.

Wow, I didn't realize I had made that many mistakes, yikes! That just means I have less to make in the future. If this saves someone else from making a mistake, then mission accomplished. Good thread!

-Jaden