duplicatable strategy repair, time estimate, flipping, agent.GC

3 Replies

What is a reasonable,  most successful, duplicatable strategy and procedure in getting fairly accurate baseline numbers on repair estimate and time estimate for properties to potentially flip or hold, that need repair, rehab, updating... Pre offer and post acceptance.

(regardless of using hard money or not, or investor is in town or out of town)

* Do you pay a general contractor to run over there, for an hour time frame?

* DO you offer payment to an experienced contractor, if close on deal?

* a GC or experienced agent as project manager to give estimate?, how to compensate for initial estimate.

* or do you trust an agent with flipping experience, they run over or each time being part of commissioned deal .. and if under contract, then have a contractor go over there after offer accepted?

(Having any agent take a look, or even if I went and looked beforehand , would be irrelevant to me each time, and frustrate another)..

What is best strategy to duplicate, and incentive this crucial part of getting trusted eyes and detail report of time and cost, to make an offer on... (or know to back out if accepted) .

matt

Raleigh NC, Osaka Japan..

investor

You need to build a relationship with a good agent or contractor. I think it shows professionalism when you (the investor) prove that you value the agent/contractor's time by offering to pay a fee for the service. If you just need baseline numbers for your pro-forma there are many independent estimating services out there that use secondary data sources such as, RS Means. I would much rather deal with an investor who shows that he or she values my time rather than just trying to get free advice.

Not really agent OR contractor, but agent AND contractor, and a few other people too.  A good strategy that worked for me flipping remotely was to filter my potential properties through my napkin heuristics based on pictures and advertised info, then if it passed that test, then have my trusted agent do a walkthrough with me on facetime while we go down the checklist of items and estimate them, and if it still worked as a deal, then we would offer, and after acceptance the crews go out and bid on it.  Of course that depends on you having enough experience and ability to be able to estimate well, which comes with time.  If not, then a strategy of paying for bids pre-offer works as well. Depends on your market, but around here you can pay around $300 for that service.

It really depends on your relationships.  If you have repeat business with the agent, they'll be willing to offer more help up front.  With the agent it's easier as you won't be shopping around when you find a good one.  For a GC, or subs you should shop your bids, so unless you both know that you're definitely working together, you're likely to pay the trip charge for them to come out pre-offer.

I always go see the property first without a contractor. If it's a listed property my Realtor will go with me. If it's a private sale I will go without him. 

I do my walk through, take photos and notes, and then go home and sit at my computer to determine my estimate. By this point my Realtor will have sent me comps based on what I intend to do to the property (i.e. take it from a 3/1 to a 4/2). 

I include an addendum in my purchase contracts that state that a seller must allow me back into the property within 24 hours of ratification. At this time I take my GC with me and I've already completed my scope of work and rough design plan. We walk it together, talk at a high level, and then he leaves and writes up an estimate. 

I know my farm area well. I know what a bathroom costs me, a kitchen, refinishing hardwood floors, painting, plumbing, electric, HVAC, roof, etc. This is what helps me determine if I can buy even before I have a GC estimate for the work.

Good luck. 

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