How do you estimate rehab conservatively before you ever see the interior?”

Question

When looking at flip opportunities—especially off-market or auction deals—I’ve been focusing more on conservative rehab assumptions before ever getting interior access.

Rather than trying to itemize everything early, I’ve been using:
Rehab bands (cosmetic / moderate / heavy) instead of line-item guesses
Age-based assumptions for mechanicals (roof, HVAC, electrical, plumbing)
Exterior + vintage clues to anticipate interior scope
Padding for unknowns rather than hoping they don’t exist

It’s helped me avoid deals that only work if everything goes perfectly.

For those actively flipping: how do you approach rehab estimation when interior access is limited or nonexistent?

Shuja Ali · Answer

Estimating rehab without interior access is very common, especially with foreclosures and off-market deals.

A conservative approach:

1) Assume a full cosmetic rehab as a baseline ($25–$40 per sq ft depending on the market).

2) Budget for major systems (roof, HVAC, plumbing, electrical) even if not confirmed.

3) Add a 15–25% contingency buffer.

4) Use recently renovated comps in the same area to avoid over- or under-improving.

5) If exterior condition is poor, assume interior condition is worse.

Once interior access is available, the estimate can be refined line by line.

Robert Street · Answer

@Peter Mckernan

That’s a good point — there’s no substitute for seeing real bids and real work.

Spending time onsite with contractors builds intuition fast, especially around systems like HVAC where numbers are fairly consistent once you’ve seen enough projects. That experience is what makes conservative assumptions possible when access is limited — you’re not guessing, you’re pattern-matching from past jobs. I’ve found that once you’ve seen enough of those bids play out, the early screens become less about precision and more about knowing whether a deal is even worth advancing.

Peter Mckernan · Answer

I would really suggest if you do not know these numbers really well.. I would be going onsite with contractors either at jobs they have to go bid, or jobs that you are wanting them to bid. Seeing what their workup is and getting a really solid number on the rehab costs. For example, I know that if the AC needs to be replaced (not ducting, just a condenser/forced air unit) this is $8,000-$10,000 for the switch out. This comes with seeing a ton of homes and going into seeing what the bid is and with current numbers.

Jake Baker · Answer

@Robert Street

Here are some of my approaches to dealing with hard-to-access properties.

I assume full-system replacements: For properties over 30 years old, budget for a new roof, HVAC, plumbing, and electrical, unless recent upgrades are documented.I add an Unknowns Premium: I include a 10–25% contingency buffer to account for hidden issues such as mold, structural damage, or layout surprises.I anchor my ARV to low comps: Protect your profit margins by basing your ARV on the lowest valid comparable sales in the area.

Robert Street · Answer

@Jake Baker

That’s a solid framework. What stands out to me is that all three of those steps do the same thing — they remove hope from the underwriting. Full-system assumptions, an unknowns premium, and anchoring to low comps all force the deal to work under stress instead of optimism. In my experience, if a deal can survive that kind of pressure test, it usually converts cleanly. If it can’t, it was never really a deal — just a scenario.

Ken M. · Answer

I made my first million by buying pre-foreclosures before the sale, using creative finance. The lesson I learned very quickly, pre-foreclosures always have a lot of deferred maintenance. I assumed the worst, and typically was right. I learned to get access, willingly by the owner, before the sale.

Robert Street · Answer

@Ken M.

That makes a lot of sense — especially the part about process.

Having interior access and seller context changes everything. Pre-foreclosure with cooperation gives you control over condition, expectations, and structure in a way auctions never can. I’ve noticed most of the blowups people talk about come from skipping those steps and trying to solve uncertainty after the fact.

Different paths, but the common thread seems to be eliminating unknowns before committing capital.

Robert Street · Answer

@Ken M.

That lines up with what I’ve seen as well. Deferred maintenance is almost always worse than it looks on pre-foreclosures, especially when owners are under stress and pushing repairs off.I’ve found the same thing — assuming worst case early keeps you honest, and getting access (even limited) before the sale is where real clarity shows up. Exterior clues usually tell you something, but interior access is what confirms whether the deal survives conservative underwriting. Appreciate you sharing that perspective — especially the emphasis on access before committing. That lesson seems to repeat itself for a lot of investors.

How do you estimate rehab conservatively before you ever see the interior?”

Most Popular Reply