What software or method are you actually trusting for first-pass rehab estimates?

Question

I am not talking about the final contractor bid. I mean the stage before you pay for a walkthrough, when photos are incomplete, access is limited, and you are just deciding whether the deal is worth chasing. Are you relying on your own spreadsheet, per-square-foot rules, contractor relationships, DealCheck / RepairPricer / PropStream, or no software at all? Where does it still break down most for you right now: local pricing, hidden scope, ARV confidence, dispo confidence, or something else?

Jake Baker · Answer

@Ali Kalaei

I personally use Deal Check. I have templates set up for specific property types that are in my buy box. This allows me to have a repeatable system for estimating a rehab based on pictures that a wholesaler may provide, pictures on Zillow, Google street view, permit history, and any other public data that easily accessible via the internet.

Jeff S. · Answer

To clarify, @Ali Kalaei, are you asking when it makes sense to pursue a flip, or how to estimate rehab costs? If you’re asking whether a flip is worth chasing, nothing beats the 70% rule-of-thumb.

This rule-of-thumb is useful for quickly screening potential deals from the bad, and it works so well so that we make loan decisions involving our own hard-earned money with it. If a deal passes, our detailed numbers, which we always run, will show an acceptable profit for the borrower and a safe loan for us.

The formula is Max Purchase Price (MPP) = 70% x ARV - Rehab Estimate. For ARVs above about $300k, we use 75%, which typically yields about 12% to 15% of ARV profit.

The issue here is the rehab estimate. Without a walk-through, we see rehabs averaging 15% to 20% of ARV since COVID (10% to 15% before). This is not a rule-of-thumb. We always track our borrowers’ numbers, and these are what we actually see on average, even though I agree that all flips are different. To be conservative, use 20%.

Sorry to be a wonk, but substituting 20% of ARV for the Rehab Estimate: MPP = 70% x ARV - Rehab Estimate = 70% x ARV - 20% x ARV = 50% x ARV (or 55% x ARV if ARV > $300k)

So, without seeing the inside, pass on deals priced well above 50% to 55% of ARV. A little over is OK, a lot is not. Ask an experienced house flipper, and they’ll agree that this is challenging. Deals get done every day, but a lot of rehabbers are losing money now, so it’s best to be conservative.

No calculator needed - you can do this in your head. Recall that this is for screening only. Don’t buy unless you can walk inside.

Your local friendly private/hard money lender will usually have a spreadsheet they’ll provide which estimates all the expenses associated with a flip that you can use to compare against the 70/75% rule-of-thumb to confirm it works.

Best of luck to you, Ali.

Rick Albert · Answer

The challenge here is literally every property is different. A great example is you can put a calculation in for flooring, but stairs cost more. You would have to get so granular. This is why some flippers focus on one type of property so that they can better control their costs.

With that said, you could do a high level spreadsheet where you input basic information and add a large contingency at the end.

J Castro · Answer

Hi @Ali Kalaei, welcome to BP!From a lender’s perspective, most experienced investors aren’t relying on one “perfect” tool at that early stage—they’re using simple, conservative screening + experience to decide if a deal is even worth pursuing.

What we see work best for first-pass:

• 70–75% rule as a quick filter
• Rough rehab assumptions (15–20% of ARV) when you don’t have access
• A basic spreadsheet to sanity-check numbers

At that stage, it’s less about precision and more about eliminating bad deals quickly.

Where it consistently breaks down:

• Hidden scope (mechanicals, structural, layout issues)
• Local labor/material swings
• Underestimating complexity from limited photos

Even the best software (DealCheck, RepairPricer, etc.) is just directional. The deals that work are the ones that still make sense with conservative inputs and a healthy contingency.

Use rules of thumb to screen fast—but don’t trust any estimate until you’ve walked the property. That’s where real numbers (and real risk) show up. Best of luck!

Marnit Brown · Answer

Before going deeper, check:

1. Rebuild NOI from scratch with market rent comps, not seller's numbers

2. Run debt service at current rates + 0.5% as a stress test

That gives you a realistic floor.

Richard Golding · Answer

For first-pass rehab estimates, I would not trust any tool blindly. I would use a repeatable structure and then calibrate it against local contractor pricing and your own completed jobs.

My first pass is usually a scope checklist by system: roof, foundation, exterior, windows/doors, HVAC, electrical, plumbing, kitchen, baths, flooring, drywall/paint, layout changes, landscaping, permits, dumpsters, and contingency. Then I mark each item as cosmetic, required, unknown, or deal-killer risk.

A tool can help keep you from forgetting categories, but it still needs local pricing. A $15K kitchen, $25K kitchen, and $60K kitchen can all be “right” depending on market, finish level, layout, and labor. Same with roofs, HVAC, and bathrooms.

For offers, I would rather be directionally conservative than falsely precise. If the deal only works because the first-pass number is perfect, it is probably too thin.

After every project, compare first estimate, contractor bid, and actual cost by category. That feedback loop matters more than the software. Over time, your own cost history becomes the best estimating tool.

Kenneth Garrett · Answer

@Ali Kalaei

If you are just starting out you need to get your eyes on properties to create a rehab estimate. Yes, you can do it with pictures, but it will be your best guess. I don’t like those general rules; 70%, 50%, 1% etc.

When you are new, look at properties to get a feel for the conditions. Join a local REIA and look at properties with an experienced investor. Many REIA’s hold open houses during rehab with members that discuss what they bought the property for, the rehab they are doing and the cost of it, plus the potential profit if it’s a flip or the cash flow and or the forced equity through the rehab.

It takes effort and time to learn. That will benefit you way more than rules of thumb that work in some cases and absolutely don’t work in others.

Best of Luck.

Peter Mckernan · Answer

I am going off today's values of materials and labor. There is a price estimator for this larger inspection company I work with and they have an IA bot due the estimates. For traditional clients I have used it and it is always off on the cost, but it is a great tool for negotiating the repairs and everything. That being said, you/your PM needs to walk the property to make the right things know for the bid and rehab costs. Of Course things due come up, but you need to have this real time by real people getting the data to get the numbers accurate. Until robots are walking the properties it is on you to get the real walk in and do the estimates.

What software or method are you actually trusting for first-pass rehab estimates?

What software or method are you actually trusting for first-pass rehab estimates?

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