How do i know how much the rehab will cost?

Question

Hi BP community. I just joined BP pro and im stoked to get started. I seen somewhere where there was some info on how to estimate how much the rehabs will cost i just dont know where it is. also can someone tell me how i will know what the ARV will be? Thank you all so much!

Zachary Deal · Answer

Finding a local RE agent is a great way to determine ARV. Also, doing your own research on newly renovated or constructed homes that have recently sold in the area on Zillow or similar websites can be a good first step as well. A lender or appraiser will typically use the most recent MLS comps (for updated properties) in the area to determine ARV.

Russell Brazil · Answer

Mostly experience.  Until you learn to estimate yourself, based on your local costs, any estimate will probably be off. Eventually it becomes second nature. I can walk into a property and know within 10% my rehab costs.

Bruce Woodruff · Answer

In my experience, most of the online calculators are just taking an educated guess for you. They are better than a rookie guessing but they cannot see everything like a real person walking the property, and you could be tens of thousands of dollars off on your guesstimate number. And unless you have very deep pockets, you can't afford to be that much off....

So as has been said....hire a very experienced General Contractor and have them give you a budget number based on your SOW, (plus they will find other things that need to be done that you will not have seen).

On your succeeding projects, you do a budget yourseld first, then hire the GC and compare numbers.

Then, eventually you will be comfortable going all solo...but it takes time.

Annie Schrock · Answer

Hi Denny, if you work with a hard money lender, they will also validate your ARV. They want to know it will sell for what you think it will before you get into the deal. They'll also be a second pair of eyes on your construction costs. If you pick a good lender, they will have done a lot of deals and be able to have a rough sense if your construction costs are on par for the project.

Jack Krusinski · Answer

The quickest way is to build a relationship with a general contractor and have them walk the property and give you a quote. Then to be safe, I like to add 10% to it as a buffer when/if cost overruns occur. Then as you get more and more experienced you will be able to estimate it yourself from doing your own projects.

Dennis Knapp · Answer

great advice thanks

Dennis Knapp · Answer

Great to know thanks

Justin Loptan · Answer

Congrats on joining BiggerPockets Pro! To estimate rehab costs, you can check the forums or blog posts for renovation guidance. A common rule of thumb is around $30 to $60 per square foot for light to moderate renovations. For more accuracy, consider using a rehab estimator tool or consulting a contractor.To determine the After Repair Value (ARV), research comparable properties (comps) that have recently sold in the area. Websites like Zillow and Redfin can help you find these, and a local realtor can provide valuable insights on the market.Don’t hesitate to ask the community for advice on specific properties!

Patrick Drury · Answer

@Denny KnappAs an investor, you get a good idea of rehab price points by getting quotes from multiple contractors and doing rehabs. The more projects you do the better of an idea you will have on rehab numbers as well as timelines

How do i know how much the rehab will cost?

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