When to get contractors involved

[Kyle Kalish]

Hi All,

Very green investor here; question is, as I'm looking at properties and trying to gauge what a good deal is, how and when should I know what the renovation costs will be? My concern is if I have a contractor/inspector look at things prior to me submitting an offer, it could be a huge waste of their time (unless this is common?). If I don't do this though, how can I "run the numbers" to know what's a good deal and what isn't? It seems in all of the books and podcasts that contractors are involved after the purchase price has been agreed upon. Thank you for any help!

[Tina Tsysh]

Here are a few options:

1. You can find a contractor and ask him to look at properties for you whether it be in person or through video. However, in order for them to look at most houses that you are considering, you would have to pay them for their time. 

2. In your purchase agreement you can put a contingency basically saying that you will only move forward with the house if the numbers make sense after your contractor looks at the house. This might not work in a hot market with many bidders. 

3. Get J Scott's book on Estimating Rehab Costs. He does a great job of breaking down rehab costs based on property type, SF, etc. This can be your first step when it comes to estimating numbers. While they won't be 100% accurate, it is better to have an idea than to not know anything. 

Good luck!