How to evaluate rehab costs?

[Jonathan Schweinefuss]

Hi BP community! I am a new investor looking to buy my first rental property. I want to buy a property below market value and it seems the best way to do that is find one that needs some work. My biggest concern is that I do not have any contractor or handyman experience, so I have no idea what I'm really looking at in terms of what needs to be done and how much it will cost. Any advice for learning about the rehab process and how to estimate costs? And any general rules of thumb?

Thanks!

[Jonathan Greene]

There is only one way to learn about rehab costs and that is to actually learn about it. Make friends and colleagues in the investor circle and see if you can swing by their jobs when you have something you can offer them too. You can't rely, as a new investor, on one person like an agent or one contractor because they both want your business. You really need to be several renovations and then you can take that real-life experience and compare it to The Book on Flipping Houses with J Scott which has good estimates, but pricing is VERY market-specific so it's an outline.