Hi I am starting my journey with real estate investing and I've gotten stuck when it comes to analyzing whether a house is a good deal or not?
How do you know whether things in the house needs to be repaired or not when you are out of state? refrigerator need replacing? I tried filling out the BRRRR calculator and came up stuck for a lot of it such as how much repairs will cost?
Where do you live? In my area (Seattle) a full rehab not including exterior work and electrical/ plumbing/ drywall costs $30/sq ft. Example for a 1500 sq ft house:
1500 sq ft x $30 = $45,000
General costs of additional items are as follows... of course this can vary greatly, but will give you a start:
Roof = $15,000
Electrical Panel = $5,000
Landscaping = $5,000
Exterior Paint = $6,000
Basic Deck build = $5,000
So your formula to calculate total rehab is:
Area x $30/sqft + Additional Item Costs
Typically once you have an offer accepted you would want to add an "inspection contingency" with your offer. This gives you the ability to get a professional home inspection from top to bottom of the property. Then you will get a 70-90 page report showing everything wrong with the condition of the property. After that you can hire contractors to come to the property and give you a bid or quote on how much it will cost to replace or repair problems in your home inspection.