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3 Ways To Beat Rising Rehab Costs


Q: Hi Gerald, My rehab costs have really been going up lately. It’s affecting my ability to do profitable rehab flips. What can I do? Lance, Fort Lee, NJ

A: I hear you loud and clear, Lance.   A useful way to analyze rehab costs is to separate the cost of renovation into its parts, which are labor costs and materials costs.  The cost of both labor and materials varies from place to place, but I can certainly attest to higher labor costs lately in my market.

Here are 3 ways to beat rising rehab costs: 1) buy building materials in bulk–you’ll save money, it may even make sense to team up with other rehabbers you know out there who are also doing rehab flips like you 2) on some jobs, ditch the general contractor and manage the rehab yourself–this will also save money but will require more of your time and 3) shop around, contractors will often test you because in the same way you’re trying to get  a job done as cheaply as possible, contractors are trying to maximize the money they earn, so don’t necessarily take the first quote you get and remember that most things in life are negotiable.

Thanks for your question, Lance.  Good luck!

For more real estate tips and information visit my blog at geraldlucas.com.

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