Realtor · Los Altos, CA · Member since 2018 · 23 posts · 12 votes
I am working on my first out of state BRRRR deal and am running into the hurdle of trying to get a contractor into the property to come up with renovation estimates in order to assess asking price. How have you guys found the best way to move forward with this process.
Right now
1. Agent finds property
2. Assess that there can be forced appreciation and CMA shows that there is a value gap between current home and last purchased
3. Try to coordinate Contractor to get into the home and estimate renovation costs.(step that I am having biggest challenge with)
4. Make an offer based on calculation of ARV-renovation at 70-75% LTV.
I am wondering what methods other investors have implemented to more efficiently attain bids and renovation numbers.
Coppell, TX · Member since 2015 · 485 posts · 310 votes
7y
do you have a realtor on the ground there?
when I am in person, I first look over the property to see if I like it. then I make a second trip and meet up with the contractor (sort of a second showing).
remotely, I'd envision your realtor/buyer agent coming in to check things out first before (wasting) contractor time.
what specifically is your challenge? you can't find a contractor willing to come out to a home you don't own?
Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
7y
Unless you have done business with a contractor before its very unlikely they will go and give you an estimate on a property you don't own or don't have in a contract.
If the contractor doesn't go I will do the estimates myself and evaluate what my rehab cost will be. I have also done rehabs before so I already know for the most part what my costs will be. You can at least get an estimate of what your materials will be. Flooring, kitchen cabinets, paint, counters, bathroom vanity, tile, and appliances. Those are all easy to do online. Now you have a base to go off and try to estimate labor. Not the ideal way since you don't have anything concrete but enough to pull the trigger on a deal.
Yes currently have a realtor on the ground. I had them check out the property and get some views on things that needed work. The challenge I ran into was the extensive work needed and attempting to get an idea if the work was 60k or 100k.
Yes the challenge, and im sure a common one, is coordinating a contractor to come out to a property(in order to get a clean renovation number before putting an offer on a property). However if this is not possible then the approach may be more rough estimate at offer and then more specific once purchased or fully appraised.
Davis, CA · Member since 2016 · 595 posts · 344 votes
7y
$$ talks. Get a few names from your realtor.... The only people who know more contractors than realtors are interior designers. Call that guy and offer them $100 for an hour walk through with a back of napkin bid that he can confidently call a price with a 5% margin of error. See what they say. As long as your realtor can zip over there with short notice... most contractors will do it... THis will get you at least in the ballpark of whats up.