How do you estimate rehab costs? - Posted by GregJulian

import · July 11, 2004, 3:46pm

Posted by Dave D CA on July 12, 2004 at 08:15:11:

I use the Marshall and Swift Repair and Remodel Guide.

import · July 11, 2004, 3:46pm

Posted by GregJulian on July 11, 2004 at 15:46:22:

(11) How do you determine rehab costs? is this done through the same people who would normally do you regular house inspections before you buy, OR do you have to pay a different person to determine the costs of a major rehab for you?

(2) What if the estimate they gave you for the rehab is wrong? Any remedies?

import · October 5, 2005, 7:29am

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import · July 12, 2004, 8:57pm

Re: How do you estimate rehab costs? - Posted by Ray CO

Posted by Ray CO on July 12, 2004 at 20:57:30:

Greg,

There are 3 good articles in the Money Ideas section. I would suggest reading these.

Ray

import · July 12, 2004, 12:54pm

create your own checklist - Posted by Farlee

Posted by Farlee on July 12, 2004 at 12:54:41:

You will be well served to create a checklist of the top 25-30 repairs/upgrades you will generally need for a house. For example,

Berber carpet w/1/2 inch pad - per square foot = $____
Painting - flat paint per square foot = $_____
Install ceiling fan = $_____ each
Remove old toilet, replace with two piece 1.6 gpf white enamel toilet = $_____
etc. etc.

Go to the Marshall and Swift guide, and get some general numbers that include labor and materials (average quality materials). Then, after you have a General contractor or two go through and give real, detailed estimates, play with your checklist a little bit until you have a reasonably accurate list.

Then, when you walk through a house, you should be able to get a ballpark figure that is not off by more than about 5-7%. If you add in a 7% “error” margin on your estimate, you should get a pretty good read of how much the rehab will cost.

The more estimates you get, and the more houses you complete (that is, when you take into consideration the actual costs of the rehab), your checklist will eventually get more comprehensive and more accurate.

Good luck.

import · July 12, 2004, 9:51am

Re: How do you estimate rehab costs? - Posted by jasonrei

Posted by jasonrei on July 12, 2004 at 09:51:12:

I break repairs down into about 10 categories. I’ll walk thru a house for about 5-10 minutes, then I’ll add up the costs. Ex:

Foundation-$1500
Flooring- $2000
AC- $2000
Roof-$1500
Electrical/Plumbing-$800
Sheetrock,texture-$1000
Framing/Siding-$2000
Kitchen/Baths-$3000
Trash/Landscape-$1500
Other (doors,fans,lights,outlets)-$2000
= $17300

Then I’ll pad the number another $1-2k minimum and maybe add to that if I’ll need to pull permits. On the above I’ll be looking at $20k.

I determine all costs on my own (with my partner). I’m not looking for an exact figure, just something close, and I try to err on the high side.

import · July 11, 2004, 10:11pm

Re: How do you estimate rehab costs? - Posted by Atlanta_bob

Posted by Atlanta_bob on July 11, 2004 at 22:11:28:

Hi Greg:
IMHO, you have to know the costs to rehab the property you intend to buy and make a profit on. Recall: You make your money when you buy, then realize that profit when you sell. If you are going to buy real estate as an investment, please know what your rehab costs are before you make an offer. Trying to pin your rehab costs on another person (or contractor) is blantantly wrong. You must own your decision to buy that property and NEVER seek remedies because YOU made a bad decision. In most cases, rehab costs fall into $5K increments:

$5K for carpet and paint.
$10K for carpet, paint and replacing a major system (like: HVAC).
$15K for carpet, paint, and 2 major systems (like: HVAC and roof).
$20K for carpet, paint and replace 3 major systems.
$25K and up: Do you really want to rehab that property?

Hope this helps.

Atlanta_bob

import · July 11, 2004, 6:10pm

Re: How do you estimate rehab costs? - Posted by Katharine (OR)

Posted by Katharine (OR) on July 11, 2004 at 18:10:44:

I recently bought a foreclosure house. I bought it subject to home inspection. Once the offer was accepted by the bank, I think the time frame was like 15 days to do the inspection and make a final decision if I wanted the property. After I got the home inspector report I had a couple contractors go thru the house and give me estimates. I did have a rough idea of what the repairs were going to run ahead of time in my mind. This is the first foreclosure house I have bought and it seemed to work out really well. I would be interested to hear other people’s opinions on this because I am still new to real estate! Thanks, Katharine (Oregon)

import · October 24, 2005, 11:42am

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import · July 12, 2004, 3:15pm

Where in OR are you? - Posted by Lin (OR)

Posted by Lin (OR) on July 12, 2004 at 15:15:15:

Katharine,
I just wondered where you’re at, and if you’d like to compare notes. I’m in Corvallis.

Lin