When I was just getting started as a wholesaler, one of my greatest fears was that I was not going to be able to estimate repair costs accurately for my end buyers. I had no prior rehab experience, and the thought of learning the costs involved in rehabbing an entire house was extremely intimidating to me.
What I soon found out was that rehab estimates can vary greatly from investor to investor, depending on what their exit strategy is.
For example…some buyers prefer to rehab properties from top to bottom and sell to retail buyers, while others will only do the minimal amount of repairs necessary to get the property ready for a renter. The rehab estimate for the rehabber is obviously going to be quite a bit more than what it would be for the landlord.
For this reason, when I am presenting a deal to my end buyers, I do not usually include an exact number for a rehab estimate. Instead, I give them a general idea of the condition that the house is in, and let them come up with their own rehab estimate when they go out to inspect the property. Most seasoned investors prefer to do their own due diligence, anyway, and will not be relying on my numbers to make their final decision.
While it is always a good idea to learn as much as you can about the costs involved in a rehab, just keep in mind that as a wholesaler, it is not an absolute necessity to have every single cost nailed down to the penny.
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Article Author:
Stephani DavisStephani has written 15 articles for us.
Visit Stephani's Website: http://www.flipthiswholesaler.net/
Joshua Dorkin
Charles Feldman
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Great advice, Steph. As you said, any rehabber is going to want to get their own estimates (or at least figure it out themselves), and so as long as you, as a wholesaler, can give enough info to get some interest, what more do you need to do?
Excellent point Steph. The reality is that for the investor, the issue isn’t the estimate. It’s the scope of work. When I am looking at a rehab for rental purposes, the largest any estimate has gotten is 3k. When it is for resale, 20k.
What Steph said, I alway thought it should be. I just take a lot of pictures and videos so the potential buyers can have a fairly good virtual tour, which will tell them more than I can put in numbers.
Great advice Steph! Great timing too. I just walked through a disaster this morning that had me a little intimidated, so this makes me feel a bit better! Keep putting out those great articles and blogs!
Thanks for the advice. I’m slowly learning the real world costs for rehab projects, but the thing about wholesaling is that you can leave all the estimates for your end buyers to figure out while you make money selling them great deals.