Failed to estimate a rehab

[Mounish Thatikonda]

I am reaching out for guidance and assistance as I embark on my journey into real estate investing, specifically focusing on rehabilitating and renting properties. Today, I had the opportunity to visit a foreclosure property located in the western suburbs of Chicago. While initially enthusiastic about the potential of the property, upon inspection, I found myself overwhelmed by the extent of work required for its rehabilitation.

As a beginner in this field, I must admit that I feel ill-equipped to accurately assess the necessary renovations and calculate the total cost of rehabilitation. I recognize the importance of having a thorough understanding of the scope of work and associated expenses to make informed investment decisions.

Therefore, I am seeking recommendations for experienced contractors or professionals in the area who specialize in property rehabilitation. I am looking for someone who can provide an expert assessment of the property's condition, outline the necessary repairs and upgrades, and offer reliable estimates for the rehabilitation costs.

Any guidance or referrals you can provide would be immensely appreciated. Thank you in advance for your support and assistance in this endeavor

Thanks in advance

[Shawn Parsh]

Mounish,

I can understand your hesitation. If you get the numbers wrong by too much you lose any potential profit. I am not in your market so I will not be able to provide any contractor names, however, I do have a couple suggestions. I would reach out to contractors and have them give you written bids to do the work you want done. That could be one contractor depending on what is needed or several for different specialties like electric, plumbing, drywall, and so on. I would also speak with a knowledgeable real estate agent in your market and ask them what repairs they recommend and what the after repair value will likely be when finished. 

Ultimately no one has more to gain or lose with the deal than you so you are responsible for all decisions that are made. Just use others to help gain a better picture of what is needed and what it will cost. Make sure you are continually tracking properties for sale in your market, what is selling for how much, what features are in demand and so on. Also keep track of the rental demand, and prices. The better you learn your market the better you will do. If you are not already actively involved in a real estate investing club then I would join one. Other investors in your market are a great resource.

Having said all of that I will say this. If you are fairly new to rehabbing properties and have limited construction knowledge you may want to focus on cosmetically distressed properties at first. Places that need new flooring, paint, a deep cleaning, some yard work and so on. There is less to risk, they can be completed faster, and the rehab is easier. Good luck.