How do you figure rehab cost

Question

When doing research on a property, how to you estimate the rehab costs? Do you use your experience when estimating, walk through the property with a “check list”, just have a trusted GC give you an estimate

Cameron Tope · Answer

@Keaton Sherman when we initially offer on a house we use general rules of thumb based on size and finishes.

Example: a 1,500 SF house with an ARV of 130k that needs cosmetic work will require about $10/SF or $15,000.

Then when we get to the property we get more detailed with a list like @Pat L. mentioned.

Cameron Tope · Answer

You got it! We would also take off for any other major repairs like AC, roof or foundation. But remember, this is just a starting place. I have bought houses at 90% ARV because the cash flow numbers made sense.

Just be clear of what you're after and use the ROT for a starting place.

Matthew Karp · Answer

I’m wondering the same thing

Pat L. · Answer

Back in the days I actually had a JOB (Engineer) planning/design/installation/budgeting was drilled into us. Commissioning the installations we worked on was nothing compared to rehabbing a run down building. I also did a 6 month co-op stint with modular home builds in AUSTRALIA for cyclone relief so I learned a LOT about the downfalls of slapping homes together on the cheap. We could throw up electrical service masts & install panels & HVAC in our sleep.

Pat L. · Answer

Yes after many rehabs it evolved.

Pat L. · Answer

I use a detailed spreadsheet we developed, come up with an estimate & then my wife adds 20-30%. But we have done a lot of them.

Nicole Heasley Beitenman · Answer

Go read J. Scott's books, "The Book on Estimating Rehab Costs," and "The Book on Flipping Houses."

Keaton Sherman · Answer

@Pat L. oh ok!

Keaton Sherman · Answer

@Pat L. Before the experience how did you go about it?

Keaton Sherman · Answer

@Cameron Tope so y’all would be basing the purchase price off that $15,000 after the 70%

So would you be looking at a $76,000 purchase or would you go lower for foundation, roof repairs, big repairs

How do you figure rehab cost

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