Question on rehab estimates

[Aaron Gilbert]

I have a quick question for experienced flippers on estimating rehab costs. When you first started out how did you go about estimating costs? The wholesale properties in my area seem to be flying off the shelf hours after being listed, which leaves me little time to research cost on an individual basis. Did you research cost down to the last .20 outlet cover or just take an estimated guess and adjust from there as you turned more properties? Items like flooring are pretty cut and dry but not sure how to proceed with expensing out an entire bathroom or kitchen. 

[David Robertson]

Hi Aaron,

More experienced flippers are able to quickly evaluate deals in their head by using their own cost history on their past projects.

In most instances flippers can tell roughly how much work a property is going to need by comparing the property to past projects.  For example, I will think back to similar projects & say 'I spent $50k on a similar project, so I think this will be around $50k'.  

I can also run through the rough numbers in my head or checklist for each scope (roughly $5k for roof, $3k windows, $10k kitchen, $4k per bath, etc, etc, etc.) to calculate a rough total.

Having past project experience allows me to quickly determine if the deal is worth an offer & get the property under contract quickly.  Once the property is under contract I will create a detailed estimate of all the repairs using a spreadsheet or estimating software.

Here's a couple of spreadsheets I have uploaded in my fileplace that might be helpful for this process:

Simple Estimate Spreadsheet

Detailed Estimating Spreadsheet