Hi all! Would love to hear your perspectives on this.
I am thinking of taking a deal from a wholesaler and this would be my first wholesale deal in addition to first time using hard money.
I’ve only viewed the property via photos and when I asked whether I could coordinate a contractor walkthrough to get his estimate on repair costs, was told this could be difficult because the current owner had been burned by a wholesaler before.
Part of the wholesale contract has a provision for a full inspection. While this is good to establish a scope of work, it does not establish the price of said work. IMO the repair estimate of a wholesaler without a construction background could deviate significantly from the actual cost.
Give the contractor the address and have them give you a rough number from what they see online and the type of finishes you want done he wont be able to give you an itemized estimate but a good contractor can look at the sqft and the general information and give you an idea on the renovations. ( Also pay your contractor for this estimate, when you do that they take their time and give you a more accurate number, my husband is a contractor lol)
Give the contractor the address and have them give you a rough number from what they see online and the type of finishes you want done he wont be able to give you an itemized estimate but a good contractor can look at the sqft and the general information and give you an idea on the renovations. ( Also pay your contractor for this estimate, when you do that they take their time and give you a more accurate number, my husband is a contractor lol)
The current owner was burned by a wholesaler so he is selling it to another wholesaler? Sounds like a losing strategy.
It’s not just your opinion, it’s a well established fact- the repair estimate of a wholesaler will deviate significantly from the actual cost.
If you can’t estimate the costs yourself and you’re not allowed to bring someone who can, this purchase carries significant risk. Your best bet to avoid these situations is to learn as much as you can about repair costs. That will also prevent you from getting ripped off by contractors.
Thank you for your thoughts on this. I always believed that a good contractor could see the state of disrepair and give an estimate. I totally agree with paying for walkthroughs! When I think about it from my own perspective, I value my own time and only want to work with contractors who value theirs.
I think between that and an inspection which would expose any capex items needing repair, I could get a a ballpark figure.
It’s so funny when someone repeats back what you’ve said and it sounds ridiculous. I recognize how crazy that whole explanation sounded now when analyzing with clearer eyes. As they say, can’t make sense of nonsense.
I think the lesson out of this is to insist on at least some strategies to minimize my own risk. The good thing about off market deals is that the contracts can be negotiated with ease. Thanks for your thoughts!