Today’s REI Classroom Lesson

When a bid is created and reviewed, there are lots of small items that can easily be missed but that will ultimately need to be repaired or replaced.

REI Classroom Summary

From simple window screens to broken sewer lines, there’s a list of items that are commonly missed when creating a bid for a rehab project that will add to your cost.

Listen to this REI Classroom Lesson

Real Estate Investing Classroom Show Transcripts:

Mike:Welcome back to the REI Classroom, where experts from across the real estate investing industry teach you the quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Ron:Hi everybody, my name is Ron Carlson, I am with Renovation Gurus. Today, I will be your host on the REI Classroom, and I want to talk to you today about items that are easily missed on a bid.
Mike:This REI Classroom real estate lesson is sponsored by, FlipNerd’s private investor coaching program and your blueprint to investing access.
Ron:There is a plethora of them. I’m not going to go into too much detail on why they’re missed, but more give you, “Hey, make sure you’re calculating for this because if you don’t calculate for it now, it’s going to come up later, and it’s probably going to add some money to your rehab.”
So for some reason, we see dead trees and the yard a lot and nobody calculates to remove them but they are hazard for FHA, and some lenders won’t lend if there are dead trees in the yard. So if you have a dead tree, you probably have to cut it down, depending upon the size of the tree.
Fence post or pickets. It’s another item that it could be rotting out and you just don’t know it until you start getting into it, you start doing some landscaping, the wind blows. It seems that once you start the rehab, then everything falls apart, but prior to that it stayed together for years and years and years. A part of that’s because you have a lot of foot traffic going through there. So a fence post or pickets, we just miss them for some reason.
A Federal Pacific electrical box. If your house has a Federal Pacific electrical box, the inspector will say, and this is true across all states, as far as that I know, that it’s an electrical hazard and it will probably burn the house down. They’ll something along those lines. If you have a Federal Pacific electrical box, you are probably going to have to remove it, or exchange it, or replace it with something better. It will get flagged on the inspection when you sell the property.
Low power lines, I don’t know what the line is, but I think it’s 13 feet from the ground in most places around here anyways. If your power lines are lower than that, sometimes they’re grandfathered in, sometimes they’re considered a safety hazard, and most of the time the client or the owner of the property is responsible for power lines from the pole to the house.
Appliance cords. You can get appliances but some appliances do not come with cords, and cords can go anywhere from $20 to $50. It’s just an additional expense and every $50 or $20 adds up and you want to make sure that your appliances are corded with appliance clip cords. Some people also charge an additional fee to install appliance cords if they’re not already on the appliances.
GFCI outlets. If you have a wet area, a bathroom, a lot of times in the garage or in the kitchen, you need GFCI outlets and you need it on the first line of the rest of the electrical track, so that way it can pop if something else goes wrong.
Garage door openers. A lot of houses have garage doors but they don’t have garage door openers.
Light bulbs. You’ll be surprised how many light bulbs are in a house, and once you actually purchase the light bulbs, the . . . I mean you literally spend $50 to $100 just on light bulbs, that’s not even including installing them.
Broken sewer lines, it’s really hard to catch. A lot of houses that we look at are investors, and they don’t have plumbing on, and they don’t have water on, they don’t have electric on, so broken sewer lines are really hard to catch until you start working on the house and start using the bathrooms.
Plumbing leaks, same thing. This is kind of an easier one to catch. If the water is on, a lot of times you can look at the water meter. If the water meter is spinning and all the water is off on inside of the house, you probably have a plumbing leak.
Insulation, a lot of lenders won’t lend unless the attic is properly insulated.
Two-prong electrical outlets. You’re walking through the house, the house is clean, it’s dated, you may or may not see that it actually has two prongs, but a lot of buyers will frown away from the two prongs, and the proper way to fix it is to ground it.
Windows screens, you can have good windows in the house but you might not have good window screens.
And doorbells, nobody ever pushes the doorbell on the outside and 80% of the time it doesn’t work for some reason. Sometimes it’s the wiring on the outside, sometimes it’s the box on the inside, and sometimes there’s a converter that converts from 120 volts to 12 volts, hidden somewhere in the closet or the attic and that seems to be the problem.
And then exterior wall spigots. So you have the water spigots on the outside of a property, a lot of times they don’t work, they don’t turn on, they’re jammed. When you do turn them on they stick, they break. It’s an easy repair but it’s just something that you want to fix before it starts leaking and causes a problem later on.
My name’s Ron Carlson, I’m with Renovation Gurus. If you have questions or want to contact me, you can call us on our toll-free line, 855-99GURUS. I think that translates to 4-8-7-8-7. Or you can email admin at You all have a blessed day.
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