Fix and Flip Nightmares: How to handle rehab disasters

When Things Go Wrong in Your Rehab Project: What to Do Next

Real estate rehabs never go exactly as planned. At some point, something will go wrong. The key to surviving—and still making a profit—is knowing how to react when disaster strikes.

First, let’s break down the two types of bad things that can derail your project.

1️⃣ Bad Things Beyond Your Control

Some things are just out of your hands, no matter how well you plan. These include:

 ✅ Permitting Delays (bureaucracy at its finest)

 ✅ Unexpected Repairs (because that “solid” foundation wasn’t so solid)

 ✅ Illness (yours, a key worker’s, or an outbreak affecting your crew)

 ✅ Bad Weather (hello, six weeks of nonstop rain)

 ✅ Natural Disasters (hurricanes, earthquakes, and the occasional tornado)

 ✅ Worldwide War (rare, but if it happens, you’ve got bigger problems)

What to Do?

You can’t control these problems, but you can adjust to minimize the damage:

✔️ Budget Adjustments – Plan a contingency fund for surprises.

✔️ Timeline Adjustments – Add buffer time into your schedule.

✔️ Profit Projection Adjustments – If things go south, reassess your numbers.

✔️ Scope of Work Adjustments – Can you scale back renovations to offset losses?

A good investor plans for setbacks—it’s the difference between staying in business or losing your shirt.

2️⃣ Bad Things Within Your Control

Some problems? They’re on you. Or at least, they could have been prevented. These include:

 ✅ Permitting Delays (yes, again—because sometimes it's your fault)

 ✅ Contractor No-Shows (MIA after getting their deposit? Classic.)

 ✅ Visible and Obvious Defects (like that "custom" tile job that looks like a jigsaw puzzle)

 ✅ Off-Schedule Work (two weeks behind, and the demo crew still hasn’t shown up)

 ✅ Contractor Under-Bid, Now Wants to Renegotiate (conveniently, after demo is done)

 ✅ General Dumbassedness (yes, this deserves its own category)

What to Do?

These issues require direct action—no excuses. Here’s how to handle them:

✔️ Observe, Note, and Confront – Keep records and call out issues as they happen.

✔️ Notify of Default in Writing – If a contractor is failing to meet terms, document it.

✔️ Fire Them Under the Terms of the Agreement – If a contractor isn’t performing, cut them loose legally and efficiently.

✔️ File Complaints as Appropriate – Report bad actors to licensing boards and local investor groups to warn others.

✔️ Forgive Them (Really) – Sometimes, people just mess up. If they own it, try to salvage the relationship—but only if it makes business sense. If they are unrepentant, forgive anyway. Holding a grudge is heavy only to the holder.

🚀 Final Thought: Plan for Chaos, Profit Anyway

No rehab goes perfectly. Something will go wrong. What separates successful investors from broke ones is how they react when it does.

✔️ Expect delays.

✔️ Budget for surprises.

✔️ Be tough, but fair.

✔️ Cut bad contractors fast.

✔️ And never let a setback turn into a total loss.

Because at the end of the day, profit comes to those who problem-solve, not panic.