Anxiety Over Rehab Costs

[Pat Arneson]

I’m looking for someone to help ease my thoughts… California Bay Area

I have everything ready to go for my first flip… financing, financial spreadsheets, acquisition and disposition playbook, design criteria, etc. I have title and appraisal experience, so comps, etc don’t worry me  

The one thing that is giving me heartburn is estimating rehab costs… good deals move quickly. I have no time to schedule a contractor to walk through and provide a comprehensive bid. I see investors selling for $100k-$125k above purchase with full kitchen, baths, flooring, paint, etc rehabs. I’m presuming profiting as well. I don’t see how those numbers make sense…

I’m considering paying some contractors to walk an on market house with me (that I don’t intend on buying as the numbers would never work) just to get an idea of their costs. I can then take those figures and estimate for future deals based on size, room and bathroom count, etc. 

Is this the best play here? I’m anxious to jump in and start making deals, but these rehab costs can make or break a deal. I’m fully prepared that there may be unforeseen costs, but I can’t even estimate properly for your standard cosmetic rehab… 

[Matthew Paul]

@Pat Arneson Before you buy anything , you better find a contractor you can trust .  The majority of the contractors out there dont want to work for flippers . If you dont have a contractor lined up before you buy anything , you will be waiting months before you can start work just looking for a contractor . 

As far as estimating costs , every house is different . There is no hard and fast method , besides experience .