Best approach for estimating repairs

5 Replies

How should repairs be estimated on a potential buy:

1. Bring a general contractor with you to give an estimate before purchasing.

2. Bring different contractors for each area of repair before purchasing.

3. Get an inspector to check out the property and run his analysis by a contractor.

4. Conduct a visual inspection yourself and make your own guesstimate.

5. Other (please explain)

@Rob Lee I think you are on the right track getting the inspection done first and then going from there. This will help you assess what needs to be done to the property.  Once the inspection is done bring different contractors for each repair to cut costs. 

Originally posted by @Rob Lee :

How should repairs be estimated on a potential buy:

1. Bring a general contractor with you to give an estimate before purchasing.

2. Bring different contractors for each area of repair before purchasing.

3. Get an inspector to check out the property and run his analysis by a contractor.

4. Conduct a visual inspection yourself and make your own guesstimate.

5. Other (please explain)

Hi Rob,

#4 Ideally, you need to be able to inspect the property, create a list of everything that needs to be repaired/replaced and put together an estimate yourself.

The problem with options 1, 2, & 3 is that they just take way too much time.  Real estate is fast paced, and you will likely be competing against other investors to get the property.  You need to be able to act quickly on a potential deal and you can't afford to be wasting time waiting on a Contractor/Inspector to show up to the property and put together an estimate.  

Contractors are also extremely busy right now, so if you don't have the property under contract you shouldn't expect any contractor to waste their time giving you a free quote for a project that has a very slim chance of actually happening.

So ideally, you should be able to inspect the property, create a SOW and create a preliminary estimate upfront for the property so you can make an accurate assessment of what the property is worth and what you should offer for the property.

Once you get the property under contract, you will generally have a 10 to 14 day window to perform inspections/due diligence where you could have an Inspector or Contractors out to give you quotes...but again Contractors are extremely busy, so it could take a week+ to get Contractors coordinate and get a quote back.

Once you get your Contractor quotes back you can re-evaluate the deal and make a 'go/no-go' decision or renegotiate a price reduction.

With that said, you could wasting a lot of peoples time by not knowing your numbers up front and making bad offers that you can't stand behind.  

To add on to my post above, this is my boilerplate response to people for learning how to estimate rehab costs:

#1 Read 'The Book on Estimating Rehab Costs'

JScott's 'The Book on Estimating Rehab Costs' is a great resource for new rehabbers to learn how to Estimate Repair Costs on 25 common rehab repairs.

https://www.biggerpockets.com/store/the-complete-g...

#2 Explore Lowes and Home Depot to Learn About Material Pricing

Take a tour through Lowes and Home Depot (or their websites) and look at finishes materials and fixtures that you will consider using in your rehab projects. This will help you get a better idea of what tile, hardwood, carpet, plumbing fixtures and light fixtures costs for your rehabs.

#3 Contact Local Contractors for Labor Pricing

Call local Subcontractors and get budget pricing for common repairs on your typical rehab project.

For example, call a roofer and ask what their average cost per Square of Architectural Asphalt Shingle Roofing would be on a 1,500 sf house, with a 6/12 pitch.

Note: Some contractors will be reluctant to share pricing without seeing the property, but tell them you are just looking for a rough budget number you can use on future projects.

#4 Compile Your Prices into a Spreadsheet or Estimating Software

Once you start to get a better understanding of Labor and Material costs you will want to store this data into a spreadsheet or software that you can use to help you streamline the estimating process.

The Book on Estimating Rehab Costs comes with a spreadsheet that you can use to help you populate your own database of labor pricing and material pricing. Or you can download my estimating templates I have in my Biggerpockets fileplace:

Simple Estimate Spreadsheet

Detailed Estimating Spreadsheet

There are other Estimating Softwares available as well which can help you manage the Estimating process as well...

#5 Practice, Practice, Practice

Walkthrough potential rehab properties (or find properties virtually online) and practice creating detailed scopes of work, quantifying repairs and estimating rehab costs for the projects.

#6 Get Your First Rehab Project

You can practice all you want, but ultimately you will learn the most about estimating rehab costs by actually rehabbing a house. Getting your first rehab project will require you to create a SOW, talk to contractors, compare and review bid proposals, review budgets, & make countless trips to Home Depot.

​You will inevitably make mistakes and underestimate things, but you will learn 90% of what you know by just doing your first rehab!

If you aren't comfortable estimating costs on your own or aren't willing to put in the work to learn how to estimate rehab costs then you need to Team-Up, Partner, Or Hire Someone Who Can Help You Estimate Rehab Costs.

Pay A GC For A Consultation And Property Walk Through

You can hire a General Contractor to provide a consultation to walk the property for you and provide an detailed estimate breakdown of what they would charge for the repairs to the property. Expect to pay between $100 to $300 to have a contractor provide a consultation.

Partner With Someone That Has Construction Experience

To get your feet wet, you could partner with another house flipper, contractor or construction professional that could help with Estimating Costs.

HI, A inspector should get you a pretty good overview of how safe and sound the property is and what should be repair or replace, in Florida we provide some estimated in the report. Try using www.homewyse.com to estimate your repairs it is pretty good.

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