Don't assume that your local retail home improvement store is the place to go for all of your needs- remember, every dollar spent in excess is a dollar lost.Make sure that your figures work out, and give yourself some financial room for the unexpected expenses that almost always come up when dealing with rehabs.Establish a good business relationship with wholesalers in your area.

What happens if you have unexpected expenses and have to borrow, short term-high interest rate, because that money is tied up?

I have and will continue to do my due diligence on prospective properties to make sure there is a profit even if the unexpected (which I'm sure will happen) comes around.

Don't forget to factor unexpected repair costs, closing/financing costs when buying, closing costs when selling, PITI (Principal, Interest, Taxes, and Insurance) payments while you are fixing up and selling, and realtor and/or advertizing fees to sell it.And now I'll give you by far the NUMBER 1 newbie mistake in real estate investing. . .. . . buying a property too high and TRYING to sell for even higher.So, Alex, to summarize my input:Experience tops book knowledge.

Working in a financial planning firm full time, holding my series 7, 66, life, accident, health, and NH real estate licenses.

Do not forget that any depreciation recapture income tax liability would be taxable in the year in which the relinquished property was disposed of.Careful Planning Required This short-term tax deferral strategy provides an excellent income tax planning opportunity when a 1031 exchange transaction does in fact fail unexpectedly.

Or you may have to sell unexpectantly when you had no plans of doing so.

Sure you got to look for the unexpected, but “if” is a big word.

It is not by accident that I work with the president and vice-president.

I would advise adding 20% to your budget as contingency for the unexpected and make sure you're not going to have any moisture seepage issues before building everything out..