Rehab analysis problems

6 Replies

When you are starting out and doing deal analysis after analysis how are factoring in rehab cost each time? Do you stick with the number in your budget and then wait till inspection to see if it actually works out?

Each rehab is different. So, you have a budget, but also you have to know your numbers for a good estimate based on what you have researched on the property.

@James G. If you haven't read J. Scott's books on Flipping and estimating rehab costs I would recommend you do so. That will give you a good starting point. From there I would network with others in your area to see what they are experiencing for costs and adjust accordingly. Whatever your end rehab number is add 10% 

If you want to have better numbers to refer to in your rehab, you can just go to Home Depot and check out prices for tile, carpet, etc. Also, talk with a few general contractors to get estimates on a bathroom/bedroom addition along with other repairs that you could come across. I created a spreadsheet based on the Flip calculator on BP. They have every section and repair detail for rehabs.  You don't need a number on everything, but get a general idea. I know that in my area I can do an addition for about $3000-$6000 depending on the size of the rooms.  Having a general idea for estimates is good when doing the initial analysis.