How do you estimate repairs on a wholesale deal?
When I’m looking at a property, how should I determine what should be replaced/remodeled and the cost to have a contractor do it?
I usually make a mental estimate, which is just a big guess, if its really bad I’m thinking 30-40K but I dont include it when I send it out to my buyers. I let them look it over and decide for themselves if they want to buy it at my price or not.
My buyers always formulate their own estimate from their own exdperience or calling in their people to look it over.
One potential buyer asked me what I thought it wud cost to rehab a crap hole house and I told him I dont know. He then asks what if it costs $20,000 I told him, it very well cud, or more, I always assume the worst.
So as you can guess I dont sell everything I get on contract, but, most of them do sell.
Sometimes its a big surprise that a paticular junker sells at a price that I thought was outrageous.
Just tell ur buyers to check it out and do their own assessment, nobody will be mad at you.
If you are looking to get a basic idea on renovation costs, look for some basic repair cost estimating books from within the last 12 months. Another option is to befriend a licensed contractor and have him walk through a property or two with you. You pepper him with questions while writing down everything that he says. That will get your feet wet.
There is no specific way to do it it either comes with experience or you ball park it.
Here in my market $20 sq ft for an easy rehab $30-$35 for a medium rehab and up to $40+ on complete Guts.
I doubt these apply in smaller markets. So adjust for your market.