Seeking advice on estimating rehab costs for BRRRR property purchase

Seeking advice on estimating rehab costs for BRRRR property purchase

Member since 2023 · 15 posts · 6 votes

Greetings fellow investors,

I hope this message finds you well. I wanted to reach out to the community to seek some guidance and advice regarding estimating the actual cost of repairs required for a BRRRR strategy property purchase.

I recently had a contractor visit the property to assess the required repairs and will be providing me with a cost estimate soon. However, I am personally not comfortable relying solely on a single opinion, and would love to educate myself further on the subject of rehabbing and cost estimation.

With that said, I would greatly appreciate it if any experienced investors could recommend some valuable resources such as articles, books, or videos that provide insight into the various options when rehabbing a property and the pros and cons of each approach.

For instance, I would love to learn more about the price and quality differences between laminate and marble countertops, and how to make the right choice when it comes to BRRRR strategy.

Your suggestions and insights would be of tremendous help to me, and I am grateful for any advice or guidance you can provide.

Thank you for taking the time to read my post. I look forward to hearing from you soon.

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  • Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    A rehab estimate is a rehab estimate, it does not matter what your strategy is. You can read all the books you want about estimating repairs, if you have not surrounded yourself with construction and learned the hard way on projects you will never know what material & labor costs. 

  • Damien LamontPro Member
    Member since 2020 · 1 post · 2 votes
    3y

    Through the years I have rehabbed both residential and commercial properties there is no one method for estimating the cost of renovations on a property. Labor costs vary depending on the contractor, material costs vary based on the time of year, and the total project cost can vary depending on what you find once you open up a wall or two. If you have already purchased the property then I would start with what is the expected ARV. Since you are BRRRRing the property you want to make sure that your spend allows you to pull out 70% of the ARV and that 70% is either equal to or greater than your total spend on the property this will help you determine if you should use laminate, tile, marble, or granite. The best thing that you can do is get at least three renovation estimates and ask the contractors to write it up two ways luxury vs inexpensive, however, the best advise that I can offer you is to look at the comps in your area and use that as a baseline for what finishings you should use.

    The first resource I can point you in the direction of is the bigger pockets BRRRR tool.

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