All Forum Posts by: David Robertson

Hi Devin,

Learning to estimate rehab costs is a process that takes time and experience.

This is my boilerplate response to people for learning how to estimate rehab costs:

#1 Read 'The Book on Estimating Rehab Costs'

JScott's 'The Book on Estimating Rehab Costs' is a great resource for new rehabbers to learn how to Estimate Repair Costs on 25 common rehab repairs.

https://www.biggerpockets.com/store/the-complete-g...

#2 Explore Lowes and Home Depot to Learn About Material Pricing

Take a tour through Lowes and Home Depot (or their websites) and look at finishes materials and fixtures that you will consider using in your rehab projects. This will help you get a better idea of what tile, hardwood, carpet, plumbing fixtures and light fixtures costs for your rehabs.

#3 Contact Local Contractors for Labor Pricing

Call local Subcontractors and get budget pricing for common repairs on your typical rehab project.

For example, call a roofer and ask what their average cost per Square of Architectural Asphalt Shingle Roofing would be on a 1,500 sf house, with a 6/12 pitch.

Note: Some contractors will be reluctant to share pricing without seeing the property, but tell them you are just looking for a rough budget number you can use on future projects.

#4 Compile Your Prices into a Spreadsheet or Estimating Software

Once you start to get a better understanding of Labor and Material costs you will want to store this data into a spreadsheet or software that you can use to help you streamline the estimating process.

The Book on Estimating Rehab Costs comes with a spreadsheet that you can use to help you populate your own database of labor pricing and material pricing. Or you can download my estimating templates I have in my Biggerpockets fileplace:

Simple Estimate Spreadsheet

Detailed Estimating Spreadsheet

There are other Estimating Softwares available as well which can help you manage the Estimating process as well...

#5 Practice, Practice, Practice

Walkthrough potential rehab properties (or find properties virtually online) and practice creating detailed scopes of work, quantifying repairs and estimating rehab costs for the projects.

#6 Get Your First Rehab Project

You can practice all you want, but ultimately you will learn the most about estimating rehab costs by actually rehabbing a house. Getting your first rehab project will require you to create a SOW, talk to contractors, compare and review bid proposals, review budgets, & make countless trips to Home Depot.

​You will inevitably make mistakes and underestimate things, but you will learn 90% of what you know by just doing your first rehab!

If you aren't comfortable estimating costs on your own or aren't willing to put in the work to learn how to estimate rehab costs then you need to Team-Up, Partner, Or Hire Someone Who Can Help You Estimate Rehab Costs.

Pay A GC For A Consultation And Property Walk Through

You can hire a General Contractor to provide a consultation to walk the property for you and provide an detailed estimate breakdown of what they would charge for the repairs to the property. Expect to pay between $100 to $300 to have a contractor provide a consultation.

Partner With Someone That Has Construction Experience

To get your feet wet, you could partner with another house flipper, contractor or construction professional that could help with Estimating Costs.

Hi Michael,

This is my boilerplate response to people for learning how to estimate rehab costs:

#1 Read the Book on Estimating Rehab Costs

As other's have mentioned, JScott's 'The Book on Estimating Rehab Costs' is a great resource for new rehabbers to learn how to Estimate Repair Costs on 25 common rehab repairs.

https://www.biggerpockets.com/store/the-complete-g...

#2 Explore Lowes and Home Depot to Learn About Material Pricing

Take a tour through Lowes and Home Depot (or their websites) and look at finishes materials and fixtures that you will consider using in your rehab projects. This will help you get a better idea of what tile, hardwood, carpet, plumbing fixtures and light fixtures costs for your rehabs.

#3 Contact Local Contractors for Labor Pricing

Call local Subcontractors and get budget pricing for common repairs on your typical rehab project.

For example, call a roofer and ask what their average cost per Square of Architectural Asphalt Shingle Roofing would be on a 1,500 sf house, with a 6/12 pitch.

Note: Some contractors will be reluctant to share pricing without seeing the property, but tell them you are just looking for a rough budget number you can use on future projects.

#4 Compile Your Prices into a Spreadsheet or Estimating Software

Once you start to get a better understanding of Labor and Material costs you will want to store this data into a spreadsheet or software that you can use to help you streamline the estimating process.

The Book on Estimating Rehab Costs comes with a spreadsheet that you can use to help you populate your own database of labor pricing and material pricing. Or you can download my estimating templates I have in my Biggerpockets fileplace:

Simple Estimate Spreadsheet

Detailed Estimating Spreadsheet

There are other Estimating Softwares available as well which can help you manage the Estimating process as well...

#5 Practice, Practice, Practice

Walkthrough potential rehab properties (or find properties virtually online) and practice creating detailed scopes of work, quantifying repairs and estimating rehab costs for the projects.

#6 Get Your First Rehab Project

You can practice all you want, but ultimately you will learn the most about estimating rehab costs by actually rehabbing a house. Getting your first rehab project will require you to create a SOW, talk to contractors, compare and review bid proposals, review budgets, & make countless trips to Home Depot.

​You will inevitably make mistakes and underestimate things, but you will learn 90% of what you know by just doing your first rehab!

If you aren't comfortable estimating costs or aren't willing to put in the work to learn how to estimate rehab costs then you need to Team-Up, Partner, Or Hire Someone Who Can Help You Estimate Rehab Costs.

Pay A GC For A Consultation And Property Walk Through

You can hire a General Contractor to provide a consultation to walk the property for you and provide an detailed estimate breakdown of what they would charge for the repairs to the property. Expect to pay between $200 to $500 to have a contractor provide a consultation.

Partner With Someone That Has Construction Experience

To get your feet wet, you could partner with another house flipper, contractor or construction professional that could help with Estimating Costs.

If you are getting quotes from Contractors I would ask for a cost breakdown of each major repair (roofing, windows, doors, paint, cabinetry, flooring, etc) so you can see where you are spending your money and make educated decisions on whether or not those repairs are worth the investment.

So it sounds like you grossly underestimated your rehab costs, but the questions are why and how?

When you first bought the property what was your rehab budget, how did you come up with it, and why has it so dramatically changed?

Has the budget changed because you missed a bunch repairs in your initial estimates that you didn't anticipate?  Or are things just more expensive than anticipated?

What is the scope of the work of the project?  Is this a full gut rehab project where you are gutting both units and doing major exterior work?  Does all of the work you have planned need to be done in order to get the property in rentable condition or are you overdoing it?

$150k renovation budget for a duplex sounds like a lot to me.

I am not a user of Resimpli, but have seen it recommended by other BP members before.

I thought maybe BP had developed their own software solution, but it sounds like BP Pro Leads is essentially just a bundle of already existing tech solutions?  Resimpli, Carrot & it appears maybe DealMachine D4D?

This is the first I've heard of BiggerPockets Pro Leads, but I just looked into it.  I could be wrong, but the screenshots used on the 'Pro Leads' landing page appear to just be 'Resimpli'?

https://resimpli.com/

It looks like Resimpli is only $99/month, so I'm not sure what else you get from the BP Pro Leads that you don't get from Resimpli?

Interesting, correct me if I'm wrong, but the screenshots used on the 'Pro Leads' landing page appear to just be 'Resimpli'?

So is BiggerPockets just reselling the 'Resimpli' CRM?  If so, congrats to Resimpli on the partnership!

What do you get with the BiggerPockets 'Pro Leads' that you don't get with the Resimpli CRM for $99/month?

Under the rehab section you have a couple of steps that you'll need to do more research on:

1. "Ask wholesaler estimated rehab costs"
2. "Ask wholesaler what needs to be fixed"
3. "Call contractor and get a rough estimate"

I would never trust a wholesaler's estimated rehab costs # or their Scope of Work.  Wholesaler's are notorious for underestimating rehab costs, so you really need to be able to identify the repairs, create your own SOW and estimates yourself.

As Miller suggested, you should pick up 'The Book on Estimating Rehab Costs".

In my opinion, what you are describing is basically a full gut not a 'basic rehab'.  

You mentioned replacing all drywall, so does that mean you are taking everything down to the studs, completely re-plumbing & re-wiring the house?  You are going to re-drywall and re-plumb without replacing the kitchen and bathrooms?

If you are removing all the drywall on the walls and ceiling that also means you are likely also going to need to replace all of the ceiling insulation, interior trim, interior doors, as well as renovating the kitchens & bathrooms with new cabinetry and floor finishes / paint, light fixtures throughout?

Again, if that's the case, that is a full gut, not a basic cosmetic rehab.

In my experience here in KC, a full interior gut rehab will run $50+/sf, but it will obviously depend on the actual Scope of Work of everything that needs to be renovated.

Hey David,

As Don suggested a SOW should be as detailed as possible.  Creating a detailed Scope of Work document for your rehab project is critical because it establishes a clear project plan that your Contractors can use to provide accurate Bid Proposals up front.

A 'SIMPLE' SOW as you requested can leave too much room for interpretation which can result in inaccurate bids, Change Orders, conflicts and disagreements once construction starts.

I have an example SOW template uploaded to my BiggerPockets fileplace which you can download as example of the level of detail that should be included for each trade category.  You can use it as a starting point and tailor the work and repairs to fit your specific project:

https://www.biggerpockets.com/...