General Comps and Rehab Estimate Question

[John Matthews]

Hey BP,

In order to evaluate whether or not a rehab (fix and hold) is worth the money, it seems there are two sides to the equation:

• Evaluating what the property will be worth after rehab
• Evaluating how much money it will take to get the property to the after rehab state

And using those numbers to work backwards to an offer price that would make sense for you. I have vague notions of how to do each, but nothing at all concrete. To break it down as I see it:

I know that ARV is determined through comps, but that said, it's my understanding that really the only effective way to get comps is if you're a realtor (or through a realtor) as most past sales on zillow, etc. are outdated or incorrect. So this isn't too much of an issue if I'm working with a realtor, but the issue I see is: most good deals never make it to the MLS, so how can I do this when working through a wholesaler?

To address the other side of the equation, really the only idea I have is to actually ask the listing agent or the wholesaler. I could bring a contractor to the property to help in the estimation process, but again that's more money up front. I'm not opposed to spending money to do my due diligence, but if I can filter out certain properties before I get to that stage, I'll save both time and money.

What do you rehabbers out there do? First before you get out to see the property, then once you do your drive by?

Thanks!

PS: I haven't bought J Scott's book on rehab costs yet, though I plan to in short order.