Sticking point: estimating repair cost

I don’t know how rehabbers think. I don’t know what they would do to a house.

Even if I did, I wouldn’t know what it cost.

I need to educate myself in the economics of the construction industry.

The guy who fixed the roof at my house said shingles were $2.43/sq. ft. Should I use that figure?

This would probably be easy once I get the hang of it.

I have explained this to you many times, write it down on post it notes and put some all over your house.
You don’t need to estimate repairs. Let the friking rehabbers do that. If someone tells me their house needs 20K in repairs, I automatically double it. But when I get asked what will it take to rehab it, I tell them either its not to bad or it’s bad.
If they got half a brain they will go look at it and make their own estimates.
Is that too easy for you?
I don’t need to estimate repairs, I don’t need to estimate repairs, there’s no place like home.

I’m not comfortable with that because I need to at least have a good estimate so I know what price to try to get it under contract for. This is my issue right now.

I have $540 to send out 1000 letters. I could send it out tomorrow, but what’s the point if I don’t know what to do with the calls.

I want to be sending out 1000 letters per week.

I suppose this is why I was told to go view 100 houses, but I’m not sure I know what needs to be done to a house even if I do see it, aside from obvious stuff like if the roof is in horrible shape, it has polybutylene plumbing, a Federal Pacific circuit panel, or very old cabinets.

Is there a “rule of thumb,” like… a kitchen costs this much, a bathroom costs this much, etc?

I know that new circuit panels are about $2000 and a roof is $2.43/square foot.

I don’t need to estimate repairs, I don’t need to estimate repairs, I don’t need to estimate repairs, I don’t need to estimate repairs.
Redstar, I’ve done 50 deals, I’ve never estimated repairs. Repeat after me… Rando has never estimated repairs, why do I persist in thinking I need to do something I don’t have to?
Shud I take my meds or blindly do what I want to do? I don’t need no stinkin advice.

I don’t understand how to plug in the formula then. You do estimate repairs in a way by simply doubling what the seller says.

Gold River estimates repairs.

Does Luke?

I always mentally guess what repairs and rehabbing costs wud be, but have seldom been asked.
My mental estimates are always like this, the house is in good rentable condition, just needs carpet and paint, that’s 10-15K
The house needs a roof and new kitchen and bath, That’s $30,000
My house shud probably be tore down, That’s $40-50K
Choose one, door 1, door 2 or door 3.
I see progress with you grasshopper. But you must go forth and face your fears, You must walk the path before you. You must go where no man has gone before.
You will do some deals. I am worthy, damn wat was in that brownie?

Yep, I pretty much do what Rando described. No need to be exact, especially since your buyers aren’t always professional rehabbers. When you sell using Craigslist and Facebook, you get a lot of handymen, plumbers, electricians, etc that have no clue properties at 60% of retail even exist.

I just told her I can give her $58,000. She had the ad at 69,550.

I think she’s a wholesaler and got the place for more than I’m asking.

Redstar, why not get your dad involved in co-buying these wholesale deals, and start expanding your income property portfolio?

And/or find an HML that will fund your deals, and give you time to rent them up, establish an income stream, and then refinance them.

Likely, you can be into these deals for zero cash, after all is said and done …and have immediate, real cash flow as a result.

I mean you’re finding truly discounted deals, that may or may not be wholesale quality, but they are certainly income investment quality, for cash-flow purposes. Why not?

That’s what I would do.

When you say co-buying, how much would he have to put in? I have no money for down payments right now.

I’m not opposed to being a landlord, but from what I currently understood, wholesaling is more profitable.

I’m about to dedicate $540/week to sending out 1000 letters/week. Are you suggesting that I try to buy all of those as well as rentals instead of try to wholesale them?

You put in the time, your dad puts in the money.
If you’re actually getting these properties cheap enough, an hml will lend you all the money for the purchase,and in some instances (depending on the equity), the rehab funds.

The issue here is that you want to do the minimum to the property, to make in livable, not do a makeover. This isn’t the time to indulge in your inner home decorator. Carpet, paint, and clean.

You want to be able to refinance out the hml with the goal of leaving no fix-up money in the house.

The point is, creating as many rentals as you can, without burying money in them. If you continue to buy from wholesalers, and even better if you prove you’re a repeat buyer, you’ll have screaming deals coming to you, instead of you chasing them. In this case, instead of flipping, you become a buy and hold investor. There’s really no limit, other than your energy level, and turning cheap fixers into rentals.

It’s something to think about.

But I just got my offer accepted on that last house, so I have to worry about that now.

Sweet!!! Great job Red.


Now do I just put it on Craigslist?

They offered to show me the house, but I declined, so I don’t really know what it needs.

You got an offer accepted? That’s the time to check out the house if it’s not far. Meet seller get the purchase contract signed.
Take some photos.
After that then it’s time to get it sold. You will be using some kick ass ads on Craig’s List.

Handyman Special 50% of value Wont last.
I have this fixer house at 123 wholesale Lane that needs some updating and rehab.
3/1 1200 SF for only $67,500 this bad boy will rent for 8-900 a month and will be worth 120K after repairs.
Call Rednuts at 558-3456

Or you can screw around.

Also the Facebook garage sale groups is a great way to sell houses. I’m sure Orlando has a gazillion of them.

Yes, I was told by the local “yahoos” that I met at the REI meeting that finding buyers is the easy part as long as you got it for the right price.