How do you estimate repair cost?

4 Replies

I’m new to everything still and I’m trying to figure out repair costs. I saw a house that is completely outdated. Kitchen, bathrooms, carpet. Basically it looks like 1960s still. What would be a good way to get a ballpark number for repairs? Im located in the Cumberland County area in NC if that helps.

There are books out there that will get you in the ballpark of what costs what (J Scott has a good book on estimating rehab costs), but you will want to shadow a GC on a walkthrough when you have a property under contract and ask tons of questions. You may have to compensate them for their time (like $50-$100) but just consider this the cost of tuition. Take notes and keep a log/spreadsheet of what he/she says and you should be able to learn slowly how expensive or cheap items and labor are in your area.

If you are looking for a quick method to provide a ballpark estimate, there is an easy formula.  You can use this prior to obtaining an actual estimate which may allow you to determine if you want to put more time into the numbers.  

For a light rehab factor 5%

For a moderate rehab factor 10% 

For a heavy rehab factor 15%

This is by no means an exact rehab estimate, but it can guide you when attempting to determine if the home has some value.  Always back it up with an actual contractor bid

@Matt Kurkiewicz are these 5, 10 & 15% rehab budgets based on anything, previous rehabs you have done?

Is it based on ARV?

Is 15% the highest you would budget for a major renovation?

I only ask because 15% wouldn't cover my cheapest and easiest renovation and I do a lot of the work. To the original poster, I would be very careful on sticking a blanket % or SF cost at a budget. You could really lose on a deal fast!