Estimating Repair Costs

Wholesaling
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Estimating Repair Costs

E. Jacobs
Real Estate Investor · Chicago, IL · Member since 2009 · 91 posts · 22 votes

Hi everyone- I'm trying to start my wholesaling business this summer but I must say I have absolutely no experience or knowledge about rehabbing or its associated costs. I want to be able to walk through a house and know what to offer based on accurate repair estimates and market value using comps. But if I don't know how to estimate the repair costs, what should I do? I know I will eventually learn from experience but I don't want to let this slow me down. Should I try to add a contractor to my team at the beginning to do walkthroughs with me and estimate the repairs? I could refer business to him from my investor network and also give him a cut if I close on the deal. Or should I ask the seller to estimate the repairs and pass that number along to potential buyers and tell them that's what the seller estimated? Does anyone have any advice here?

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Sage Jankowitz
Residential Real Estate Agent · Somerville, MA · Member since 2009 · 195 posts · 32 votes
16y

I'm a fairly new wholesaler with about six months experience and I ran into the same problem. About three months in I connected with an experienced general contractor who has worked on a number of rehabs for many successful investors in my area. He's looking to get into his own rehabs ASAP, so we came to an agreement: Anytime I find a qualified property he'll check it out with me and estimate repairs free of charge. He'll have first dibs on any property I get under contract, but if he doesn't want it or can't get the funding within a week, I open it up to anyone on my buyers list. It's win-win because he gets to look at qualified leads for free all the time and has first dibs on every property I come across. And I get free estimates and a wonderful education in the process.

I've learned quickly that it's all about forming partnerships and alliances to help one another out. Find out who you need on your team and then ask yourself, what can I do to help them? Offer your benefit to them first and then ask if they can help you (most newbies get this reversed). You'll have much more success then trying it the other way around!

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  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    14y
    Originally posted by Kevin Tunney:
    Hey E. Jacobs,

    ......um..Kevin? This post is two years old, and a quick check of E Jacobs profile will tell you he hasn't been active in over a year.

    Besides, this thread is about estimating repair costs, not finding partners and making deals. There is a place for that. The only reason I mention it is that this is the way you get negative influence, and if you're trying to network, you surely don't want that.

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    14y

    If you do rehab of your own buildings or properties you know what things will cost.

    Being an investor and a commercial broker helps me analyze a deal for a client on a deeper level versus just a broker that has no clue about investing or what things cost.

    With experience you will learn.You can pretty much walk in and say 10 light switches at 78 cents if you install yourself,1.40 if you use a handyman,or 2.00 if you use a licensed professional.

    This is just an example and not what these items would cost.

    You always estimate on the high side with a contingency based on actual costs to what your knowledge of things cost.

    This way if you come in lower the returns are above your goals.If you come in as expected no loss.If you base buying on low estimates and go over then your returns are now diminished.You never talk yourself into a marginal deal.

    If you want to be respected as a wholesaler you need to know costs.If you send out a bunch of junk deals to serious buyers they will think you are a flake and cut you off.

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  • Account Closed
    Wholesaler · Chicago, IL · Member since 2011 · 219 posts · 38 votes
    14y
    Originally posted by Jerry Puckett:
    Originally posted by Kevin Tunney:
    Hey E. Jacobs,

    ......um..Kevin? This post is two years old, and a quick check of E Jacobs profile will tell you he hasn't been active in over a year.

    Besides, this thread is about estimating repair costs, not finding partners and making deals. There is a place for that. The only reason I mention it is that this is the way you get negative influence, and if you're trying to network, you surely don't want that.

    Jerry,

    Sorry for not doing a "background check" before making a post. I realize this thread is old and is primarily about estimating repairs. Are we forbidden from talking about anything but repairs here? I did a quick search on wholesaling properties here and came across this post. I saw someone who was trying to start their own wholesaling business (which is exactly what I've done) and was reaching out to them. Just trying to help others out.

    FYI the negative influence is because I'm new to BP and didn't know the posting rules.

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  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
    14y
    Originally posted by Kevin Tunney:
    Are we forbidden from talking about anything but repairs here?

    Yes. The purpose of having specific threads for specific topics is so people interested in that topic don't have to read off-topic stuff (like this discussion).

    If you have another topic you'd like to post about (for example, networking for partners) start a new thread in the appropriate forum. And if people come to your networking thread and start trying to discuss repair costs, I promise to scold them as well... :)

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  • Account Closed
    Wholesaler · Chicago, IL · Member since 2011 · 219 posts · 38 votes
    14y

    Sorry for the inconvenience. I was just trying to spark up an old thread.

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  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
    14y
    Originally posted by Kevin Tunney:
    Sorry for the inconvenience. I was just trying to spark up an old thread.

    Sparking up old threads is great...just keep them on topic!

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  • Account Closed
    Wholesaler · Chicago, IL · Member since 2011 · 219 posts · 38 votes
    14y

    Will do Scott. Still learning the rules. No harm intended.

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