top 5 Common Rehab mistakes by new and growing investors

[Dallas Kidd]

Here are the top five things that, in my opinion Investors do wrong on rental rehabs,  and why I believe they are costing themselves more money in the long run.  What would you add to this list? 

#1 - Not including necessary cap-x items in the initial bid/repair cost.  Why not replace these items up front  while you have the initial financing in place? You will also greatly reduce unexpected costs during the holding process. Eventually this skimping to make a "deal" a "deal"  will catch up to you and deplete your reserves. 

#2 - Buying builders grade fixtures.  We are all tempted by these sweet deals, you know, the 6 dome lights for $4.99 and $10.99 faucets! 

DO NOT DO IT! You most certainly will be getting multiple service calls during your tenants stay. Spend the few extra dollars up front and have less issues down the road.  

#3 Hiring cut rate contractors that are unlicensed or uninsured. Besides the obvious issues like work not getting done timely, correctly, and the horror stories of contractors leaving with the deposit money. They leave you with an unrealistic expectation of cost that will eventually catch up to you as you try to scale. 

 #4 Under/Over bidding - One leaves you second best on every deal and the other leaves you coming out of pocket for repairs. 

#5 Security Systems- Some contractors offer these as part of their scope of work and some investors do also. I think they are worth the money when you are dealing with high end fixtures and appliances. 

[Alexander Felice]

These all sound like 5 versions of the same mistake:

CHEAP

Investors are supposed to make money, but new investors definitely try and do it cheaper. While not a horrible strategy, it does open up to lots of pitfalls you've mentioned. Paying for quality service is a hard lesson to learn, but an important one.  buy nice, or buy twice

The biggest mistake I see new investors make is waiting for the BEST deal instead of getting A deal. I understand that every beginner wants a great deal, but its' unlikely to happen and it's not necessary for success. When you're new you don't know what a great deal is usually, you also don't know the right people to get those deals fast enough, and when they MIGHT come across a great deal inexperience and fear incapacitates them from making a lighting fast decision. So reduce the pressure and just get A PROFITALBE DEAL instead of waiting to get the best deal in the world. 10 singles are far better than 1 homerun.