Question and/or advice.How would you handle a Rehab when the Design and Budget clearly are not in line with each other?

I just received a message from the Rhode Island Association of Realtors that said:"The real estate conveyance tax that is paid at closing by sellers of homes and other real estate will increase by 15% on July 1, 2014 unless you act today.Article 12 of the state budget will increase the tax $2 per $500 of the purchase price to $2.30 per $500.

.): $1,500Paint (most rooms need paint): $1,000Roof Shingles: (may or may not need to do; roof missing a few shingles near gutter): $300Dryer Duct (missing a piece that connects from laundry room to outside, quick fix): $100Hot Water Heaters (electric) x 2: $2,000 (which is probably way high, but trying to be conservative).TOTAL ESTIMATED REHAB BUDGET (which is probably sky-high): $9,400ESTIMATED CLOSING COSTS: $5,000 all-inPROJECTED CASH-ON-CASH RETURNS: 14.91%=====================SECTION 8 PROGRAMI really need to educate myself on the Section 8 program. 

The fire chief is requiring me to put in sprinklers in my duplex because he says his fire truck can't make the turn into the alley/fire lane.

Copies of any Governing Documents and Budgets shall be provided prior to closing.;6.

One thing I would be careful of is not knowing, or underestimating, your repair costs which can take a big bite out of your budget and profit.

I would try using this calculator and input conservative numbers for your pro forma rents, repair budget, taxes, insurance, vacancy, and other misc costs.Also, I was listening to the blog, reading posts, and previewed 100 homes over a 6 months process before I pulled the trigger.

Mistakes are certainly part of the learning curve, still it's nice to avoid them.I think the one thing I would tell myself would be to not skimp on due diligence: get bids when need be (especially while learning to budget accurately), get expert advice on questionable foundations, scope the sewer lines in older homes, check the utilities, etc.What one lesson would you tell your pre-investor self?

Congrats on getting your first deal.Have you given yourself a budget for rehab?

I am really considering a budget for getting started.