Walk me through this?

Question

You just got a motivated seller on the phone... He invites you to come down and make him an offer.
	
	You drive up check out the place and inspect it for a potential money maker.
	
	What are you looking for to determine what will need fixing? What are the bare minimums that you always fix-up to ensure you top dollar when it comes time to sell? What about the gotchas that you've learned over the years to inspect because it cost you or a friend big money in the past?
	
	And as a bonus question: how do you determine how much it's going to cost so you can quickly make offers, but not lose money on the deal?

Mary B. · Answer

Take a contractor with you to the visit. They will talk you through it and give you a verbal quote at the end.

Kudos,

Mary

Cyndy Rupe · Answer

when you invite a contractor to come with you and give a verbal estimate of repair costs, do you pay them for their time/ opinion, or does the payment come when they get hired to do the work?

Jim Lally · Answer

@Christopher Dittemore

I would highly recommend picking up 2 books by J Scott: The Book on Flipping Houses and The Book on Estimating Rehab Costs.  They are excellent resources for learning more about the overall house flipping process.  You can order right here on BP.  He includes some very helpful spreadsheets for estimating as well as a sample rehab analysis.

I learned quite a bit from these books myself.

Patrick Snyder · Answer

I would suggest that if this is something you're going to be doing for years to come, spend some time learning what common repairs/updates/replacement costs.  Most importantly, things like the roof, furnace, bath/kitchen renovations, flooring, plumbing, central air, and foundation/structural.  After a dozen houses with a variety of issues, you'll get a good idea.  Also, connect with a few people in your area who are on Bigger Pockets and ask what their experiences are.  This will give you freedom to go through any house at times best for you, and you won't feel tied to one contractor.

Phil Z. · Answer

For most people its going to be anything that needs repair (is broken or damaged) or updating.

Christopher Dittemore · Answer

@Mary B. 
	 
	 Thanks Mary, that's a great idea, I was thinking it would be a little weird having contractors show up when you're giving a bid though, but that seems to be a straightforward way of doing it.
	 
	 @Chris Piper 
	
	Chris your list was exactly what I was looking for, what are the biggies that I need to make sure aren't wrong and how to see that. Also what are the common changes you would make in a rehab home, so I really appreciate you taking the time to comment.

Chris Piper · Answer

@Christopher Dittemore Mary is correct. If you do not know what repairs cost, then I would have multiple contractors meet you when you look at a house. Here are some basics to start with for you:

Make sure it doesn't have any MAJOR problems like: Structural problems, cracked foundation, sagging, mold, lead paint, asbestos, etc.

Check out the windows. If they are old wooden windows that will need to be upgraded to vinyl, keep in mind that will increase your repair price quite a bit.

The kitchen is the single most important room of a rehab. Make sure your kitchens ALWAYS look amazing because that can sell a house. No need to go overboard with granite counter tops and such, but always make it look great. If the cabinets are decent, maybe painting them and putting new hardware on them will work. Bathrooms need to look good as well.

Make sure your house has good "curb appeal." Meaning the house looks good from the moment you pull up: Siding is good, good roof, nice yard/landscaping, etc.

Also, check your mechanicals. Water heater, Heating/AC unit, electrical, plumbing. Make sure that the breaker box is current and doesn't have the screw in fuses.

Once you have contractors go through and give you an estimate, look at the price breakdown for each repair. Put the costs in an excel spreadsheet so you can refer to it on your next house and you will have a pretty good idea of what repairs will cost.

Walk me through this?

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