Non-GCs - how do you estimate property repairs for a home?

Question

For those of you who are not flippers, but rather ordinary W-2 folks who are trying to househack or build wealth through RE, how do you estimate how much money it will cost you to fix up a home? Do you first buy it, and then start calling general contractors, or do you have them take a look during the inspection period?

Thanks!

Jonathan Greene · Answer

You don't or you can't. Only experience will get you there because if you don't have the experience and you are trusting a GC you found somewhere, how will you even know if their estimates are reasonable. You want to learn costs from networking with other investors, but still you can't apply that knowledge without experience. So, for first-timers, you need to have investor friends that you trust that can help tell you when your subs and GC are juicing you because they know you don't know anything.

Kevin Hart · Answer

@John Anderson when I was starting out, I always had a contractor walk through before closing. Its very difficult to estimate rehab until you've done a bunch of projects. If you can't find any contractors to work with you yet since you're new, I have used home inspectors (paid for the service) to go do an inspections and I tell them to give me the most brutal inspection report possible. Then you can take the report and pictures to a contractor and try to get some bids. Crawlspace/foundation, roof, and mechanicals are usually my most expensive items to look for

Jon Schwartz · Answer

I have contractors come during the inspection period.

After helping a number of clients with house hack reno projects, now I know what things cost in my area. Replacing electrical or plumbing is in the $6-8K range for a one-bedroom apartment. A full cosmetic facelift for the same apartment will run about $20K. I just know the ranges now.

If you're doing your first deal, I recommend you first take a few weeks to find the absolute best agent for your situation -- one who is involved in house hacking or flipping and can give you good ballpark estimates.

Then have contractors come in during the inspection period!

Best,

Jon

Rob Bergeron · Answer

I'd checkout J Scott's estimating repairs book!

Jim Kalish · Answer

First never, and I mean never, buy without knowing all of your costs. It's the quickest way to lose your shirt. @Christopher Orr pointed out a great book. As he said you have you have current and local data. This book is a great way to not only get a good idea on what its going to cost but also lays out what you should be rehabbing. But when you make the offer and are into your due diligence phase having a contractor walk through with you is the best way to go until you get good at it. The contractor will not only give you real solid numbers but will give you insight into things you may not see that could cost you some big dollars.

Good luck and let us know about your first success.

Scott M. · Answer

If this is your first or one of your first rodeo's it is very difficult to do this yourself. not only do you know know what to look for but you don't know the current rates or costs of anything, probably. I mean, I have been doing this for 20 years and I can get within a few hundred on most homes for my local area but ask me to do that for another state and I am lost. I have on idea what someone pays in NY or CA or Kentucky for anything.

Only way to do it is find a friendly contractor, pay him if you have to, get them lunch, whatever it takes. even if you don't move forward the experience will be invaluable. You will learn, okay, they charged X to paint a home that is Y SQFT and now you have 1 data point for painting.

You need local people to tell you and help you learn.

Christopher Orr · Answer

J Scott wrote a book estimating rehab cost, it has a good break down of costs. I bought the book several years ago and took the digital cost estimator and have been updating the prices as i have been going.

Id say get the estimating rehab cost book, and walk thru with a handyman or a contractor in your due diligence.

Non-GCs - how do you estimate property repairs for a home?

Non-GCs - how do you estimate property repairs for a home?

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