BiggerPockets

When wholesaling a property to your prospective buyers, how are you able to estimate the rehab cost to them (and for yourself) so that they have the general idea of what it will cost and their ARV without having performed an inspection which your buyer does? Or do you do an inspection as well before you report your figures?

Good answer Kevin! and to both of you, welcome to BP, I've missed posts lately. Bill

How do you know it's a good deal for your end-buyer if you haven't estimated the rehab costs and figured that into your determination of a purchase price?

If someone tries to wholesale a deal to me, and can't give me a ballpark estimate of the rehab costs, I don't assume the price they're asking is reasonable.

And no, I don't really care how close they are to the actual rehab costs (I'll probably spend 5x what they suggest), but I want to know if they consider it a paint-and-carpet rehab or a complete gut. That tells me a lot about how accurate the price might be and whether I should bother looking at the property or not.

Great idea Peter. That seems to make a whole lot of sense since most rehabbers already have specific contractors in place to do their repairs, or know material cost for doing it themselves.

Do most wholesalers have an eye for what needs to be repaired or do they rely on the motivated seller to disclose the majors and minors of what's wrong with the property?

Thank you.

Agreed with Peter that having a list of issues is as good as having a rehab cost estimate (potentially better). This list can be used to generate your own estimate, and thereby be used to determine a reasonable wholesale price, and then can be given to the end-buyer for their estimate.

LAst week an agent told me about a REO property that fit my property criteria to a "T". A drive by revealed it was a nice neighborhood and the house itself, from the street, seemed to be in great shape. I am told many people just do a drive by and assume a well kept exterior means the inside is equally well kept and use a standard $X/sq ft. I went inside and was shocked at the damage and the amount of repairs (not up-grades) this property needed. The property wasn't vandalized, I think the people just lived that way. Anyway, my buyer appreciates a lst of what needs to be done but also likes my pricing the work, kind of like a reality check for his estimate. i use the 65% ARV - repairs- assigment. My offer was 52% of list. The property was bought for 22% above list by someone that never went inside the property. Ouch. I told the agent to call me as soon as this falls out of escrow.