Estimating Rehab Costs

[Michael Temple]

Just looking for some general advice here. I just submitted an offer on a property in a neighborhood I know very well as I already have one really nice rental there. As a result, I was able to peg the ARV perfectly. What I was not able to do so well is estimate the rehab costs. I struggle with this even using the BP calculators. Here's why...

1. Estimate WHAT should be done. I can walk through and see problems, but figuring out which ones must be done and which ones are OK to get full or near ARV offers when it is finished is a constant struggle. I tend to go higher than I probably should on my repair costs just because I am probably factoring in stuff that doesn't need to be done to get a full priced offer.
   
2. Once I rough out what should be done I just don't feel I have the solid experience to get those numbers figured out on my own. I am always afraid I am going too low on something and it will be far more expensive than I thought in reality. So I think I go too high on these estimates, but my thought is I would rather go high and still make money rather than go low and try and be super competitive and find out I went too low and screwed myself.

This offer I just presented is waaaay off from the current asking price. ARV is 160K. They are currently asking 124K and I am offering 90K, which includes holding costs and rehab of 30K, leaving me with a profit of 25K if I did it right. which I just don't feel confident if this is too high or too low.

Bank has asked for all highest and best offers to be in by 3:00 today. I fully expect to lose out to others as I am sure multiple offers have been put in. This seems to happen to me a lot. So I really need to figure this out. I am concerned about trying to get aggressive on it when I am still pretty inexperienced on flips as that is a way to almost ensure I lose money, but I also keep losing every deal so that is a guarantee that I don't make anything.

I should probably add I had a property under contract last year that I thought was a good deal, went through the inspection and found out something that was in plain sight (electrical) I passed over as not being important until after the inspection and found it due to the what needed to be done and how it had to be done was, in fact, a 15K expense I simply overlooked. I learned from that, but I had to back out of that deal to save my skin. 

Any tips you BRRRR or Flippers could share to solve these issues would be appreciated.