Full-Time Real Estate Investor · Raleigh, NC · Member since 2014 · 57 posts · 9 votes
So I've been doing a little bit of analyzing deals and have found a couple of houses that would make sense to take a closer look at. The homes are in need of some repair work and I've set a budget for it accordingly. My question would be, how strange would it be to ask my general contractor to come take a look at a home alongside me, and give me an estimate for the repair costs on the spot, in order for me to decide if it's worth making an offer on it or not?
In other words, if my budget for repairs is $10,000, and after looking at the house with me he says that it needs $20,000 in repairs, I would decide it's not worth my time or would lower my offer accordingly.
My question is, is that something that is normal to do in real estate investing, or is bringing your contractor along something that is frowned upon?
Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
10y
Josue,
Let me just say this - if you don't know how to price the rehab, making an offer is just stupid. Your options are to either bring a contractor, or simply guess...
Which one would you prefer? Who cares if something is frowned upon. If it's the only way for you to make an intelligent decision, then it's the only way - done!
Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
10y
Josue,
Let me just say this - if you don't know how to price the rehab, making an offer is just stupid. Your options are to either bring a contractor, or simply guess...
Which one would you prefer? Who cares if something is frowned upon. If it's the only way for you to make an intelligent decision, then it's the only way - done!
Investor/Realtor · Wentzville, MO · Member since 2014 · 846 posts · 431 votes
10y
@Josue Guerrero I have walked through many properties with my contractor. If they are not available I usually over estimate the cost of the rehab to account for things that I might have missed.
When my contractor walks through they always find stuff that I did not notice so regardless of how good you are at gauging the cost of a properties rehab budget, 4 eyes are always better than 2.
Full-Time Real Estate Investor · Raleigh, NC · Member since 2014 · 57 posts · 9 votes
10y
@Ben Leybovich Ha ha, you are right, that is indeed quite simple. I asked a contractor about checking out the properties with me and he said he would but he wasn't sure if realtors approved of that. I realize the question sounds silly, but he put the doubt in my mind and I just wanted to be sure about it!
@Ben Leybovich Ha ha, you are right, that is indeed quite simple. I asked a contractor about checking out the properties with me and he said he would but he wasn't sure if realtors approved of that. I realize the question sounds silly, but he put the doubt in my mind and I just wanted to be sure about it!
Thanks for the insight though, Ben!
This is a $10,000 lesson, Josue - everything in REI is simple if you let it be. Don't get caught manufacturing wisdom. Many on BP like that. REI = common sense It's complex, but it's simple!
Full-Time Real Estate Investor · Raleigh, NC · Member since 2014 · 57 posts · 9 votes
10y
@Ryan Billingsley Yes, 4 eyes are definitely better than just 2! I will definitely bring my contractor on board when I go check out some of the properties. You also make a valid point about overestimating expenses if I can't bring him in. I might have to do a little bit of research on the costs of things so I don't underestimate, while I think I'm overestimating!
Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
10y
of course it's a good idea to bring a contractor in to give you an estimate of needed repairs. But where are you going to find a contractor who will trail along with you if you are not paying him?
You are absolutely right, Ben. I'm realizing more and more everyday that REI is not as difficult as most would have you believe. I suppose it's still just a little hard for me to wrap my head around the idea that your best investment strategy sometimes, is simply common sense!