repair estimates???

I’ve decided to start with wholesaling because I am operating on a shoestring budget - a very short shoestring.

I have a few leads and believe I’ll have a property under contract very soon. I intend to wholesale the deal to an investor. When I bring the deal to the investor, I want to present him with five things:

  1. signed purchase contract
  2. title search (performed by title company)
  3. termite report
  4. sales comps
  5. repair estimates

I understand the title search and termite report can be paid for at the closing. I have access to free sales comps through the title company as well. But the problem is #5. How do I get an estimate for repairs? If I hire a rehabber to walk through for me, will he expect to get paid immediately or at the closing? Or, does anyone have a general price list as to what the prices are to repair/rehab houses i.e. roofs, kitchens, carpet (per sqft), etc? Rember my short shoestring? I really don’t think I have the money to hire a professional inspector and pay him BEFORE the closing? Having said that, is there anyway for me to prepare repair estimates?

Any help would be greatly appreciated. Thanks a lot.

Everyone who buys from a wholesaler will do their own estimates on repairs and won’t take your word for it anyways. However, you need to have an idea on what it will cost for repairs or you won’t be able to know what to pay for the property. It’s always better to over estimate repairs than under estimate. Several wholesale guru’s have lists of general estimates for repairs, if you can find one of these, it’s a good start.

One trick is to call on a few contractors to get estimates. Let them know that you are looking to rehab the property. Get their opinion as to what needs to be done, and at what cost. Make sure all the contractors are working off the same criteria, meaning that one is not trying to over-improve the property while one is giving you bids without having a license or carrying insurance. Since most contractors give free estimates, you will get what you are looking for without paying anything. Perhaps you can then refer the contractor’s and their bids to the person who ends up purchasing the house, although many rehabbers already have their own team.

One of the sad realities of doing a rehab project is that if you use outside contractors, they are the ones who end up making most of the money! Most good rehabbers either are already contractors or have a team of day laborers to do the work on the cheap.

  • Joe

Thanks Tom and Joe for your responses… I’ll be sure to scout around and look for contractors that will perform free estimates. That’s a really good idea.