My biggest fear I need to get past... - Posted by Christi

Posted by michaela-ATL on September 30, 2003 at 06:31:42:

Actually, most rehabbers will add 20% or more to their repair list. It’s nature of the job - you always go over budget :wink:

michaela

My biggest fear I need to get past… - Posted by Christi

Posted by Christi on September 29, 2003 at 16:00:54:

on flipping properties is estimating the repairs.

I can’t pay a contractor to come to every property
I look at to see if it’s a deal or not to get him
to give me an estimate.

any advice please!!!

Thanks very much,
Christi :wink:

Re: My biggest fear I need to get past… - Posted by Mike G

Posted by Mike G on September 30, 2003 at 18:18:19:

If you start out wholesaling properties, I don’t think you even need to really know the cost of repairs. If you find what you think may be a good deal, make your best guess as to what the repairs are (even if you have absolutely no clue), get it under contract w/ an appropriate contingency clause and start marketing it for sale to other investors who do rehabs. If nobody wants to buy, ask them why (odds are it’s b/c it isn’t a deal…either the formula you used for making your offer was wrong or your estimate of repairs was wrong or both) and exercise your contingency if need be. Won’t lose anything. I bet you’d learn real fast what the true cost of repairs for that house is. Then leverage this knowledge on your next deal. Of course, it would help if in the meantime you were doing everything else you could to learn how to estimate repairs. On the other hand, if someone buys from you, guess what? you either estimated right or you maybe even overestimated.

Re: My biggest fear I need to get past… - Posted by Erin (detroit)

Posted by Erin (detroit) on September 30, 2003 at 07:10:14:

I just learned that Home Depot has a “pro CD” at the Pro desk. It will plug you in to everything Home Depot has, but it also has an estimator. I am not sure if it uses different labor costs depending on the zip code, but its free and worth looking into (I have one and will be loading it today).

Erin

Re: My biggest fear I need to get past… - Posted by art c

Posted by art c on September 29, 2003 at 20:57:21:

If you are considering doing rehabs on a regular basis. Purchase a professional estimating manual.
You can buy a generic one from Home Depot. These will give you a fair idea of costs.
I have been a reidential contractor for thirty years. In my opinion the very best reference is the estimating manual by Home Tech of Bethesda , Md. It is area specific and uses the unit cost method. Which is easy to understand and master.If you study this reference in depth ( and always get your handyman/contractor quote(s) for comparison )you should be safe.
The manual costs less than $100.

Christi, where are you located?? - Posted by JoeB(Atlanta)

Posted by JoeB(Atlanta) on September 29, 2003 at 20:19:58:

Hi Christi, estimating rehab w/formulas varies widely by geographic area… are you anywhere close to Atlanta or SE United States?

Joe Brillante

Re: My biggest fear I need to get past… - Posted by freeman

Posted by freeman on September 29, 2003 at 19:21:07:

I rencently made an offer on a junker (but didn’t get it). My Realtor recommended a handyman to me. I had him go by the house and look it over before I made the offer. He spent a hour of his time there for free and gave me an estimate over the phone. With that info and my own estimates of closing and carrying costs from my own house, I had all the info I needed to make the offer (plus the Realtor’s estimate on after-repair-value). I have worked with this realtor enough to trust her, and she knows everybody in town that has anything to do with this business. She knows the good, the bad, and the ugly, plus she owns investment property herself. Of course, if I had of gotten the house, I would have used the same handyman to repair it and the realtor to list it. Some people in this business don’t value the average realtor very much, but I value her input greatly. Also, it may be wise to add $1000 for “misc.” to your repair list. Good luck.

Re: My biggest fear I need to get past… - Posted by Chefist

Posted by Chefist on September 29, 2003 at 16:29:24:

Christi,

You make a good point…my experience has told me that you should become familiar with the costs of rehabbing before you look for properties…you can get close estimates my checking at your Home Depot…they can give you estimates on your own home…or you can just talk to them about thier prices…for example, I called HD the other day and they quoted my $5/yd for carpet installation…therefore, you can make the estimate yourself on what it will cost…if you have other companies do an estimate, you can give a plus or minus 10% from the Home Depot quote…

Yes, you want to be careful with wasting their time…the best thing you can pay for is a home espection…go with the inspector, and plug him for info (since you are paying for it)…a $300 inspection is better than many $3000 RE courses…

Just my 2 cents…

Ben

Re: My biggest fear I need to get past… - Posted by Randy

Posted by Randy on September 29, 2003 at 16:24:51:

Well, you have a problem. If you don’t know anything about repair costs yourself and a contractor’s going to charge you to give you an estimate it sounds to me like you’re going to have some upfront expenses until you learn a little bit about rehab work.

In your purchase agreement, include the clause ?Subject to inspection by a licensed contractor?. This will at least give you the option to withdraw your purchase agreement if the estimate of repairs makes it a losing proposition. There are numerous web sites that can give you some good basic information on repair estimates, for example kitchen remodeling, replacement windows or remodeling bathrooms. You might try doing a search on www.Google.com for remodeling.

Here are a couple you can check out:
http://www.improvenet.com/projecttools/estimators/kitchen/kp_step2.html

http://stargroup.com/ResidentialInspections.htm

Re: My biggest fear I need to get past… - Posted by art c

Posted by art c on September 29, 2003 at 21:01:42:

www.hometechonline.com

Re: Christi, where are you located?? - Posted by Christi

Posted by Christi on September 30, 2003 at 09:27:34:

hi bob,

I’m in texas.

thanks everyone for your ideas!