Some questions regarding rehab estimates and offers?
Quick question BP!
Assume I'm looking at REOs
When I'm looking at a property my agent sent me online and I want to determine whether or not the property is worthy of visiting, how do I do a quick estimate of rehab costs to plug into the flipping calculator? For examples sake, lets say I like the area and have found my comps, but now I need to decide what my bottom line is for offering and whether or not the deal's numbers make sense! What are some strategies for doing this?
Another question I have is, would having an inspector and a few different contractors visit a property before offering make sense? I know deals go quite fast, but since I am a newbie I really do not know what I'm looking for when it comes to rehabs and it would heavily benefit me to get a rough SOW from an inspector and then bids from different contractors based off that inspector's SOW as well as their own findings. As David Greene said on BP Podcast 257, "Do I really know what I'm looking for when I look under the hood of my car? I'd rather just ask an expert." I'd clearly pay everyone for their troubles, but having a legitimate list of what needs to be done, along with an actual price for the rehab would clear any doubts I have on my first deal and ensure my offer is adequate.
I know the standard procedure is to get your offer accepted and then go about your due diligence, but even after calling around and finding labor/material costs I'm not confident my numbers would be accurate. So I really wouldn't know what I needed to offer to even get it accepted to then go about my due diligence.
I am a newbie, but I'm extremely committed to real estate because I see the freedom it can offer. I have invested my money wisely elsewhere and will have the funds necessary to start looking for my first deal later this year. I'm just looking to get my understanding of the entire process down so once I am able to start my first deal, I can.
Thanks!