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Updated over 1 year ago on . Most recent reply

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Christopher J Woodland
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How to estimate rehab costs prior to purchase or offer

Christopher J Woodland
Posted

So, I am looking at doing my first rehab. Are there any tips for estimating how much the rehab will cost? Would it be frowned upon by the seller to get some contractors out to take a look at it and provide estimates before purchasing it? If this would be acceptable, what would be the most proper way to handle this?

I like the contractor estimate idea because I know when I was a commercial banker we'd commonly ask if people had estimates for the renovations or improvements that they wanted to do on a particular project or if they were eyeballing it. So, I'd feel even more prepared to take my packet into the bank if I had that estimate because people very commonly tend to underestimate the cost of the renovation. But, I am not sure how to approach that with a seller prior to either offering or closing on the property. 

Thanks in advance,

Christopher Woodland 

  • Christopher J Woodland
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    Devin James
    • Developer
    • Orlando, FL
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    Devin James
    • Developer
    • Orlando, FL
    Replied

    Hey Christopher J Woodland,

    It is customary to have a contractor walk a property & give you a estimate during your inspection period. That is part of inspecting the property, I have gotten multiple deals under contract and backed out once the estimate came back higher than expected & the seller would't come down in price.

    Once you get the property under contract, just let the seller know that you are going to have inspectors & contractors take a look at the property. First you need to find a contractor who will be able to give you an estimate within inspection period. Then, once you get the property under contract, you can walk the property with your contractor & ideally they will be able to get you an estimate before the end of the inspection period. If the estimate is higher than expected, then you try to negotiate the price down to make the deal work. 

    Hope this helps!

  • Devin James
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