Newbie Investor- Rehab Costs

[Christopher Reardon]

Hey everyone just wanted to write my first post on BiggerPockets. My name is Chris from Long Island, NY. Discovered BP a few months ago and have consumed all of their content. Listening to multiple podcasts/webinars a week and analyzing at least one deal a day. Im looking to invest in the Indianapolis area right now, more specifically Franklin, Beech Grove area. I guess one question I have is when analyzing properties using the bp rental property calculator. By just looking at the pictures of a property on Zillow or realtor.com, what's the best way to run your numbers with the rehab estimate? Because some properties I've been running seem pretty good when using a budget of 20-25k, but what good is it if the numbers are just completely off. I intend to read Jay Scotts book on estimating rehab costs. Thank you for listening to me ramble on and appreciate everyones feedback!!

[Lee Ripma]

@Christopher Reardon

Congratulations and welcome to the site! I read J Scott’s book when I was learning. The numbers were a bit outdated (he has since released a new version) but the concepts were really good. I don’t think the BP cost calculator is good, I recommend house flipping spreadsheet to learn costing. You need to know how to cost rehab to invest in RE, in my opinion. This will come with exposure and practice. You can cost a cosmetic rehab from pictures. You can’t cost things you can’t see-plumbing, electrical, etc. Sometimes a listing will say what has been updated. If the house is really old then very likely that plumbing, electrical, HVAC needs to be done. Jump in there and try your hand at costing. You’ll have to match it up on and deal you do and that’s part of your due diligence-reconciling what you assumed with what is real.