When I was just getting started as a wholesaler, one of my greatest fears was that I was not going to be able to estimate repair costs accurately for my end buyers. I had no prior rehab experience, and the thought of learning the costs involved in rehabbing an entire house was extremely intimidating to me.
What I soon found out was that rehab estimates can vary greatly from investor to investor, depending on what their exit strategy is.
For example…some buyers prefer to rehab properties from top to bottom and sell to retail buyers, while others will only do the minimal amount of repairs necessary to get the property ready for a renter. The rehab estimate for the rehabber is obviously going to be quite a bit more than what it would be for the landlord.
For this reason, when I am presenting a deal to my end buyers, I do not usually include an exact number for a rehab estimate. Instead, I give them a general idea of the condition that the house is in, and let them come up with their own rehab estimate when they go out to inspect the property. Most seasoned investors prefer to do their own due diligence, anyway, and will not be relying on my numbers to make their final decision.
While it is always a good idea to learn as much as you can about the costs involved in a rehab, just keep in mind that as a wholesaler, it is not an absolute necessity to have every single cost nailed down to the penny.
Photo Credit: juhansonin