I am getting ready to take the plunge. I feel confident with my “formula” (see below). My issue is how to accurately calculate rehab costs. I know that it will not be perfect but I want it to be as close as possible. I have a contingency amount worked into my formula as well.
Here is my formula:
Maximum Retail Value
=maximum purchase price
*thanks to Kevin Myers Buy it, Sell it, Profit
First, does anyone see a major flaw with this?
Second, back to the original question, how do I calculate the rehab costs?
I have an agent who started off in the rehab business and gives me estimates as we go through the houses, but I am slightly nervous taking the salesman’s word. I will have an excellent home inspector also come in and go through the house with a fine tooth comb and the bid will be contingent upon a “satisfactory home inspection”. I have heard of people bringing contractors for estimates during the bidding process, but the agent says it is overkill. I also have done some remodeling on my own home so I have a general idea of what is involved and will do some of the work myself.
Any suggestions as to what you all do or have done would be great.
Hooray on my first post, I am no longer a lurker.