Estimating Renovation Costs for owner-occupied SFH (West MI)

[Alyssa Cairns]

Hi BP! 

After redecorating and refinishing most of my Logan Square, Chicago condo over the last 2.5 years (and hitting the market at the PERFECT time)- we were able to sell for 140% of our original purchase price, and will pocket over $85k. We accepted a full price offer and will close in mid-June.

Now we are looking for a fixer-upper in East Grand Rapids, MI, and hope to be even more intentional about improving our new home. Eventually- the equity built in this home will be the jumping off point for the start of our real estate investing business. (more on that later!) My question for you is this:

What is the best way to estimate renovation costs before/during the buying process on a distressed home? We will be using an FHA 203(k) loan, and have been approved up to the maximum finance limit for Michigan ($271k). I don't want to under-estimate the repairs, have an offer accepted, and then end up having to walk away from the house because we couldn't afford the work that needs to be done. We are trying to expedite each step of this process to reduce the time we need to live with friends/family members. 

Thanks so much in advance.