Allow a lot of financial room on your first rehab.

The first major rehab project that I did cost me a lot more than I originally planned. It turned out that I just did not see everything that came up. Luckily for me I got the property at a good price and did most of the work myself. When I started the project I thought I had a good group of people working with me, but later I came to realize that they were in fact much more expensive than I thought. For example I hired a guy that stopped by and said he was a roofer working on the side, and wondered if I needed the roof redone. The best part about him was that he was cheap (or so I thought he was). The price that he gave me was dirt cheap and I took him up on the roofing job. Well I found out the roof leaked when I was in the process of selling the property. So the agent that presented me a offer, and put roof repairs in the contract. So It turned out that I had to get a licensed roofing contractor to correct the problem. As you can imagine the total bill for the roof was more that if I hired a professional in the first place. Over time a real estate investor will start to get a good group of contractors and helpers that they can trust and get the job done right the first time with no surprises. With out the experience in doing a lot of investment property rehabbing I missed a lot of hidden costs that if I had to hire it all done would have amounted to a very large bill. Doing most of the work myself helped in this matter a lot because I was able to keep the total costs down. I found that I tended to underestimate the cost of materials needed for the various projects around the house. This included everything from amount of paint required to drywall etc... I think that a big factor in this was that I wanted so badly to get into real estate investing that I underestimated the costs so that the deal would be even more attractive to me. Now I go out of my way to estimate my costs a little on the high side so that I don't have any surprises down the road. It turns out that if a property still looks good after a high set of estimates it usually is a great investment.