Rehab calculator questions

[Chris Reynolds]

I've been aggressively trying to figure out how to purchase my first deal. I've been able to get in with agents and have been getting deals sent to me daily but I have zero clue when it comes to estimating rehab cost and which throws off the numbers and is a huge frustration point for me. How do you estimate the cost site unseen and the agents don't provide in info, pictures are also very deceiving. Everything I have learned is they can't be trusted either. I have read the books on estimating rehab cost and they all estimate on actually seeing the property with a contractor, how do you even get that far......... The webinars are very vague as well, if not skipped over cause Brandon know what things will cost. I assume the offer is sent and in negotiations but i'm lost and can't figure out the answer to keep on keeping on. 

I have tried to find similar question on BP but the site is enormous and at times very overwhelming. I have often times found myself venturing off on other topics while trying to find answers. Would anyone be willing to offer some insight?  

[David Robertson]

You can't expect to estimate a project sight unseen, if you've never actually estimated rehab costs for projects that you've seen.

Have you put any of the information you learned from the Book on Estimating Rehab Costs into practice yet?  How many properties have you walked through?  Have you put together a detailed estimate of repairs on any properties?  What did you learn from that process?

I would walk through as many potential rehab properties as possible and practice creating detailed scopes of work, quantifying repairs and estimating rehab costs for the projects.

Even if you have no shot in h*ll at getting a property, it's still worth the time to practice creating an estimate of repairs for the property.

The more you practice estimating costs on potential rehabs the more you will learn how much things costs, which will make you a faster, better estimator.  

Eventually, you will be able to know from experience that based upon the pictures you see online, this property is gonna cost $xx,xxx to rehab.

AGAIN, you can't expect to estimate a project site unseen, if you've never estimated a project that you've seen!  Start by estimating costs on properties you've seen, then you will have the skill to put together estimates on properties you haven't seen!

Here's the process I recommend for learning how to Estimate Rehab Costs:

#1 Read the Book on Estimating Rehab Costs

JScott's 'The Book on Estimating Rehab Costs' is a great resource for new rehabbers to learn how to Estimate Repair Costs on 25 common rehab repairs.   Sounds like you've already read this book?  Now it's time to start putting that knowledge into practice.  If you don't use it, you'll lose it!

https://www.biggerpockets.com/store/the-complete-g...

#2 Explore Lowes and Home Depot to Learn About Material Pricing

Take a tour through Lowes and Home Depot (or their websites) and look at finishes materials and fixtures that you will consider using in your rehab projects. This will help you get a better idea of what tile, hardwood, carpet, plumbing fixtures and light fixtures costs for your rehabs.

#3 Contact Local Contractors for Pricing

Call local Subcontractors and get budget pricing for common repairs on your typical rehab project.

For example, call a roofer and ask what their average cost per Square of Architectural Asphalt Shingle Roofing would be on a 1,500 sf house, with a 6/12 pitch.

Note: Some contractors will be reluctant to share pricing without seeing the property, but tell them you are just looking for a rough budget number you can use on future projects.

#4 Compile Your Prices into a Spreadsheet or Estimating Software

Once you start to get a better understanding of Labor and Material costs you will want to store this data into a spreadsheet or software that you can use to help you streamline the estimating process.

The Book on Estimating Rehab Costs comes with a spreadsheet that you can use to help you populate your own database of labor pricing and material pricing. Or you can download my estimating templates I have in my Biggerpockets fileplace:

Simple Estimate Spreadsheet

Detailed Estimating Spreadsheet

There are other Estimating Softwares available as well which can help you manage the Estimating process as well...

#5 Practice, Practice, Practice

Walkthrough potential rehab properties (or find properties virtually online) and practice creating detailed scopes of work, quantifying repairs and estimating rehab costs for the projects.

#6 Get Your First Rehab Project

You can practice all you want, but ultimately you will learn the most about estimating rehab costs by actually rehabbing a house. Getting your first rehab project will require you to create a SOW, talk to contractors, compare and review bid proposals, review budgets, & make countless trips to Home Depot. 

You will inevitably make mistakes and underestimate things, but you will learn 90% of what you know by just doing your first rehab!