Estimating Rehab Costs

[Dylan Robinson]

Hey everyone,

I'm new to REI and I'm wondering if you guys have any advice to share on coming up with rehab estimates when you're just starting out, and don't have a long track record to go off of? Obviously you need something within reason (if not exact numbers) to plug in and figure out if a deal pencils or not. Is it just a matter of reaching out to GCs and asking for a list of generalized estimates for common rehab work? Is that something they'll do prior to looking at any potential deals under contract? Any insight would be greatly appreciated!

[Jonathan Greene]

You can not do it if you don't know the numbers yourself. It takes a very long time to even get in the ballpark. This is why most wholesalers are terrible because their numbers are never even close on the repair costs. You can read The Book on Estimating Rehab Costs by @J Scott as a guide, but the current numbers for your area will be different.

Don't let someone tell you that you can just do per square foot. That does not work and is only for experienced renovators who know their buy box and know they will always go to the studs and redo everything.

Just get out in the field, see every dump on the market, take sneak photos to show to a contractor, and get some investor and contractor friends who will be in the ballpark on the costs.