Do you attach a repair estimate with offer for a rehab?

Question

I have heard folks say on several different occasions that they submit a repair cost estimate with their offer. How do you typically go about this? Do you think it helps to show the seller that you have done your due diligence?

Do you just slip it in with the rest of the paper work?

How detailed is it? Is more detail the better?

Do you show your maximum purchase price calculation on how you came up with your offer?

I have attached a picture of my template to show you what I have so far. My information pulls directly from my MPP calculator and detailed repair cost estimate on my spreadsheet.

Let me know your thoughts.

Thanks.

Shane Woods · Answer

That makes sense. There are many flippers on here who are able to get the bank price lowered on short sales and REO's when substantial repairs are needed. They don't care about your holding costs or profit. Their singular goal is to get rid of the property for as much money as possible, to minimize their losses. They're not very smart about it sometimes either...

Check out J Scott multitude of posts on here, and his blog http://123flip.com for several instances of this.

Also Will Bernard (@Mentions not working for him for some reason) has some good stuff too.

Check out J Scott multitude of posts on here, and his blog http://123flip.com for several instances of this.

Also Will Bernard (@Mentions not working for him for some reason) has some good stuff too.

David Robertson · Answer

Thanks.

The titles are Trajan and the main content is Myriad Pro Light. I'm not sure if these fonts come standard on all computers, but it is on my work computer using Microsoft Excel 2007 on Windows 7.

Shane Woods · Answer

On a side note, what is the font you used for your spreadsheet? I love it.

David Robertson · Answer

Good input Shane,

I guess I was thinking the repair estimate would be a good idea to include for offers to banks for foreclosures or short sales. I included profit and holding costs because you would think that banks of all people, would understand you are in the business to turn a profit.

Making an offer to a homeowner who is down on their luck would probably require a different approach.

Thoughts?

Shane Woods · Answer

I think this looks great, up to the part where you mentioned "profit". In most cases where you're presenting to a motivated seller, you need to be helping them out, offering them some sort of solution to their problem, their needs. This spreadsheet is a tool, to help them understand why you're offering such a low amount. If you include any other figures in the presentation, like holding costs, etc...and ESPECIALLY profit, they're going to see you as looking to make money off their bad luck, not wanting to help them out of a bad situation. It makes the whole conversation about your needs instead of theirs.

To get the low offer accepted, it has to be about their needs, so they can leave feeling good, not feeling like they'be been taken advantage of.

Do you attach a repair estimate with offer for a rehab?

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