How to estimate cost of repairs

Question

Hello BP.

After some research I believe that the BRRR method is something that i'm interested in pursuing. I am contemplating weather I should market for this property via direct mail, online sources, or yellow letters. Or link up with a wholesaler to find one. The only problem that I encounter is that I have no experience with construction.Therefore it would be difficult for me to estimate the cost of repairs. On the same note I cannot tell weather a wholesaler is "fudging" the numbers or not. What is the safest way I can approach the situation to ensure that I don't lose money?

Kuba F. · Answer

@Daniel Roman you should expect most wholesaler numbers to be bad, often because they don't know any better, often because they're not digging deep enough.  The aforementioned book is a good start to get your estimating legs.  After you find a property that's worth pursuing on paper, make sure you walk it with a trusted contractor and get a bid. Ideally you would get several bids as they can vary greatly.  Additionally, it's up to you, not the contractor to decide what to work on, so you'll need to educate yourself on what buyers expect. Once you get a few properties under your belt, you should start getting more comfortable with it.

J Scott · Answer

http://www.biggerpockets.com/flippingbook

Kuba F. · Answer

@Daniel Roman While it's always more profitable to cut out the middle man, wholesalers can fill a certain part of the process that you may or may not need filled.  Wholesaling is primarily a sales and marketing job trying to source properties and get them under contract. You may find that you're not very good at it and decide to leave the hustle to them.  A good many wholesalers don't know what they're doing, so if you use them, then yes, it's up to you do your due diligence to see if the deal works for you.  But this really goes to anyone that you deal with, not only wholesalers, but also realtors, contractors, etc, with the cardinal rule being to never delegate responsibility for your own success.  If you paid too much, it's not your realtor's fault for giving you bad comps.  If your rehab is costing you twice as much as your contractor bid, it's your fault not the contractor's.

Daniel Roman · Answer

Thanks,

So once I get educated on this subject, I should scout for my own properties? Rather than go through wholesalers? Or Do a little bit of both, and when I go through a wholesaler I should just make sure that all the numbers provided are correct?

@Kuba F.

How to estimate cost of repairs

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