Estimating rehab costs

[Jerome Morelos]

Hello BP community. How do you estimate rehab costs of a cosmetic fixer-upper without seeing the property in person? Is there a rule of thumb? Thanks. 

[Nabeel Haider]

Short answer, find a contractor that you trust and have preferably worked with before. Have them do a quick walk-thru of the properties you're considering and give you a ball park estimate. If you don't have a contractor in the area, find a real estate agent that you build a relationship with that can give you referrals. 

The first fixer-upper or two will be a bit of a learning curve for all parties, your contractor will begin to get a better sense of the type of rehab you do and soon you'll be able to more or less standardize them over time which helps you get accurate estimates. Your agent will also get better at bringing you "similar" types of properties and in most cases can walk-thru the property and give you a high level comparison of said property to prior properties which helps a lot as most times, you'll need to quickly get an offer in before your contractor has a chance to swing by and give you a better ballpark. You'll ideally only need to have your contractor walk-thru properties that you've already secured in the interest of their time. I have my agent run through multiple properties and put in multiple offers based on her high level analysis of what's needed, once I get an offer approved, I'll have my contractor go out and give me a preliminary ballpark of the rehab. He'll then at some point go back and give me a more detailed scope of work, timeline, and cost. 

Hope that helps.