Me and my investment partner have been listening to podcasts, books and any other information we can get our hands on. We have are looking to do our first flip in the near future. We find great value in the flip calculator that bigger pockets has. When we analyze a flip it ask for rehab cost. As a new investor what is the best way to know how much a rehab will cost or how much materials cost? Do I need to shadow a contractor? We want to start off on the right foot so any helpful advice or suggestions would be appreciated.
You can start with the BiggerPockets book:
I would definitely read the book. Shadowing a contractor would be great. You need to be with someone who understands the cost during the time they are walking the property and taking notes. Then you need to be able to go through the estimate line by line, so you can ask questions and get clarification. It's a process.
Just make sure you understand what is really going into the rehab and what the costs are. You need to have a good grasp of this BEFORE you ever purchase the property. Maybe find something with more minimal rehab and graduate yourself up to something larger.
@J Scott 's books are all great reads with loads if useful and insightful info. I have been using the House Flipping Spreadsheet (google it) and it is a really great, relatively simple tool. He includes pricing for each category that is in the ballpark for the actual prices I get. You could look at his categories and the pricing (laid out by SF, LF, per, etc) and call a bunch of contractors and hopefully have 3 contractors provide their pricing for the items in the categories and use the average.
Sure it's a lot of leg work, but you will end up with a pretty accurate price chart for most of the categories used in your flips and will be able to get a pretty good estimate of rehab costs.
Best of luck!