Rehab real estate investing has been a hot topic among Reddit investors. In this article, we summarize the best tips and strategies on rehab investing shared by experienced Reddit users, with a focus on critical factors like estimating rehab costs, managing risks, leveraging tools and platforms, and optimizing profits. By learning from other investors’ perspectives and experiences on Reddit, you can make more informed rehab investment decisions.
Accurately estimate all rehab costs to avoid budget overruns
Reddit investors emphasize doing thorough cost estimates before starting a rehab project. Underestimating costs is one of the biggest mistakes first-time rehabbers make. When budgeting, account for materials, labor, permits, utility hookups, unexpected repairs, carrying costs, and a contingency buffer. Get multiple contractor bids and understand what is covered. Using rehab calculator tools can help model costs more accurately.
Manage risks by starting small and having project control
Rehab projects often take longer and cost more than expected. MITigate risks by starting with smaller projects to gain experience. Maintain control as the general contractor to closely oversee contractors, payments and timelines. Conservative underwriting, getting funding lined up, and having reserves and exit strategies are also critical risk management steps per Reddit discussions.
Leverage rehabber tools and financing platforms
Reddit rehabbers recommend using all-in-one tools like PropStream and DealMachine to find profitable deals, pull permits, assess ARV, generate quotes and manage projects. For financing, peer-to-peer lending platforms like LendingHome and Groundfloor offer rehab loans. Hard money lenders also provide funding for experienced rehabbers with a solid business plan.
Optimize profits through value-add renovations and cost efficiencies
To maximize profits, focus on value-add updates like kitchens, bathrooms and landscaping advises Reddit users, along with sweat equity. Building a reliable contractor network is key to controlling costs. Wholesaling deals, utilizing mixed funding sources, and timing exits with market cycles can also improve gains.
In summary, successful rehab investors on Reddit recommend comprehensive cost budgeting, thorough risk assessment, leveraging the latest tools and financing, and value optimization strategies. By learning from the reddit rehab investing community, new investors can improve their chances of profitability and avoid common pitfalls.