What am I looking for?

[Joe Conklin]

When I am looking at a beat up house that needs a total renovation, what constitutes "good bones"?  Is there anything specifically that I should look for being in tact?

Also, what is the best way to estimate rehab costs? Bring a GC to the home?  Are there any rules of thumb when estimating rehab costs?

[Brent Paul]

That is really tough to say.  I think your best bet is to bring a contractor with to estimate repairs.  Better yet have a few contractors give you estimates.

Or you could buy j scott's book on estimating rehab costs.

The main thing is to know what you need done to the property, what rooms, etc and have the contractor give you an estimate.

Pricing is all over the place and will vary by contractor.

One good rule of thumb I heard brandon say in a podcast was to double your repair estimate and if you still do ok then it's a good buy.  A budget could very well be blown by hidden mold, asbestos, termites, leaky water, etc.   So many things hiding behind walls that don't get noticed until the walls come down.

On my first house within 6 months of owning it I had to replace the Air conditioner and furnace.  I was out a cool 10k.  3 months after that the sewer backed up and flooded my basement.  Things happen.  Always expect the unexpected.  Nothing is sure thing.

If the contractor says the repairs will be 20k and you don't have enough to cover that then you will have to explore your options of how to pay or walk away from the house.

Eventually when you do enough of these houses you will have a general ballpark of how much money to set aside for repairs.