How do you evaluate property values and make on the spot estimates of fix-it costs.
Can anyone explain their formula?
There is no formula for that. You need to do your homework. It isn’t all that easy.
Elaborate please.
Their has to be a tecnique/formula that successful rehabbers use to make it possible to determine a house’s potential for profit, long before getting near the closing table.
Now you are asking two different questions. My answer for the first one stands.
Your second question can be answered here:
http://www.reiclub.com/forums/index.php?board=24;action=display;threadid=17759;start=0#lastPost
HTH
Get estimates in WRITING for various repairs. Remember this is a new business for you so you will be paying to go to school when you first start. ALWAYS leave room for the unexpected because it’s going to come up. Over time you will get better at estimating repair costs because you WILL make mistakes. The key to survival is to only enter a deal that leaves you with enough room to screw up a little while you learn. Also be very careful of realtors who provide you with comps on these properties. If you have a pulse you know the market is going down. Here in the Northeast comps from 6 months ago are worthless. And I’ve seen people buy properties based on old numbers and it’s not pretty. Good Luck, Hang in there and wait for the right deal.
Thank you for the link.
What about estimating closing costs? ???
When my realtor calls me with a potential flip and i go and check it out, should i then call in a contractor to get fix-it costs or should i estimate the work myself?
I heard The Marshall and Swift home repair and remodel cost guide is one of the best books to get average estimates on repairs.
What do you think?
I think that’s a good start but repair costs can vary a lot from job to job and from region to region. The bottom line is this… If your laying out 6 figures to buy a property what’s safer for YOU ? I would have the guy who will be doing the repair make the estimate. Handy man types are great for this stuff they can handle different trades and can usually are very reasonable. GET the numbers don’t GUESS the numbers. It’s the whole business, don’t forget that.