4 Tips for Becoming a Better Negotiator
Over the years that Tarek and I have been running our house flipping business, we’ve learned quite a lot about what to avoid when rehabbing. In fact, I was thinking just the other day about how many mistakes we made on our first few house flips, especially when it came to rehabs.The thing about home renovation mistakes is that they almost always seem like really good ideas at the time. I thought when we first started “Oh, this’ll save us so much money!” or, “This is going to take so much less time!” Then I learned the hard way that my “great ideas” were actually going to cost us a lot.
Since I’ve been reminiscing on all of those bad mistakes that seemed like good ideas at the time, I thought I’d share some of them with you to help you avoid learning those lessons the hard way.
Over-Rehabbing to Make Up for Paying Too Much
We’ve all been there. You fall in love with a property. You just know it’s going to be completely gorgeous when you get done and that it’s going to sell for an insane profit. Then you find yourself in a bidding war, and before you know it, you’ve spent an extra $5,000 to $10,000, and your rehab budget is completely shot.
This happened to us on one of our early flips, and Tarek and I thought, “Well, this isn’t a big deal. We’ll just make it so beautiful that no buyer could resist it, even at a higher market price.” If I’d only known how wrong we were!
As it turns out, you can’t out-rehab the market. Houses in a given neighborhood are going to have a specific price range, and over-rehabbing yours won’t get you out of that price range. It’ll just eat up your rehab budget and leave you with a house that’s sitting on the market going stale.
Trying to Do It All Yourself
When we started flipping houses, Tarek and I were confident that we could do a lot of our rehabs ourselves. I’m always up for a challenge, too, so I thought we would have no trouble saving some money on contractors by doing things like laying tile and knocking out walls on our own.
Again, we were so wrong! I don’t want to admit how many times we had to basically pay for a job twice because we messed it up the first time and then had to have a pro come back in and do it right. Fortunately, we learned our lesson, and now we both know how much time and money we can save on our flip houses by letting the experts do their jobs on things like plumbing, flooring, and even demolition.
Having Pros Come in and Do Everything
On the other end of the spectrum, I’ve seen house flippers who decided that their time was just too valuable to waste on any of the work that needed to be done on their flips. This might seem reasonable at first, but when you see what it can cost to get a professional service to come out and clean the floors or do final cleanup after construction, you’ll think again.
For some things, it’s just best if you take a little bit of time and do them yourself, especially if you’re just getting started. You might be surprised at just how much more you can add to your profit margin if you’re willing to get your hands a little dirty now and then.
There you go – three rehab mistakes that always seem like a good idea at the time, but never are! Avoid these, and you’ll be ahead of the game!
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