Estimating Rehab Costs before making an offer
Dear BP-Community,
I read J Scott's book about how to estimate rehab costs. That is a really great book and I find the technique he describes very helpful.
However I feel like there are a few items where it's going to be hard to estimate their cost by myself, even with the described technique. Specifically, I'm thinking about issues that will only become visible after an inspection by a professional. The items with open ended costs J lists in his book are septic, foundation, leaks below slab and mold issues. I'm sure there are possibly others like the plumbing or electrical behind walls.
How do you estimate the costs for such items before making an offer? After all I don't want to pay an inspector or contractor to get me a bid before I made an offer. That would slow me down quite a bit and cost a lot if I needed to make 100 offers to close on one.
Do you just estimate an "average" cost for those items and if something unexpected comes up during the inspection, would you just renegotiate the deal (making use of the inspection contingency in your offer)?
Or do you rather assume the worst case and estimate a high cost and make your offer based on that?
As always, I'm looking forward to hear your opinions!