Pre-Rehab Hold (Phase 0)
The gap between closing and rehab start where you carry costs with no progress.
Phase 0 is the dead money period — you own the property and are paying the loan, insurance, taxes, and utilities, but renovation has not started. Every day in Phase 0 adds to your cost basis without moving the deal forward. Common causes: permit delays, contractor scheduling gaps, material lead times, or simply not having the crew ready on day one. The best operators minimize Phase 0 to under a week. The average is 2-3 weeks.
Phase 0 Cost = (Monthly Loan + Insurance + Taxes + Utilities) × (Hold Days / 30)
The four-phase holding cost engine tracks Phase 0 separately and flags deals where pre-rehab hold exceeds 14 days. Timeline data from completed deals feeds the market intelligence engine to set realistic Phase 0 estimates for future deals.
You close on January 5 but your contractor can't start until January 23. That's 18 days of Phase 0. At $1,200/month in carrying costs, you burn $720 before a single nail is driven. Over 10 deals a year, that's $7,200 in avoidable cost.
Line up your contractor and permits BEFORE closing. The best investors have the crew walking in the day after the deed records.
Educational content only. Consult a CPA or attorney for advice specific to your situation.