Estimating repair costs? Complete newbie.

[Kristen Olson]

Hi all, I'm a brand-new member to BP and this is my first post. I'm just starting to learn about REI and am at the stage where I don't know what I don't know, but have started looking at properties online all the same. I've found a duplex in Galveston, TX (I live in Houston, so close by) at what seems like a good deal, but it looks like it's going to need a lot of work. The owner's agent (not a realtor, just a friend, I think) believes that the property needs a new roof and he estimated $50k for a re-build, but I have no idea how experienced this guy is with such things.

The property itself is a duplex that is listed for $80K. The only ARV I really have to go on is the Zillow estimate of $150K.

Being a total newbie, I don't even know if I should look into BRRRR for this property, or wholesale, or just walk away? I haven't visited the property yet to see it for myself. Here are a few pictures, just for reference.

Does anyone have the time to just quickly estimate if this could be a good deal or a total disaster?  If this post is too complicated or against the rules, I'll gladly remove it.  Thanks so much!

[Account Closed]

I suggest hiring a pro. Pay for the service you want. 

Sure, you can learn to guess on general remodeling cost. But "construction" isn't just remodeling. W/out knowing the code you can miss the mark by thousands, w/out knowing "signs" of troubles you could find out you have a major issue when its too late and you own it.

I, of course, am biased. but would recommend a MUCH different course of action. 

1. Hire an expert to look over the property and give you a complete evaluation before purchasing.  (inspector works well)

2. Determine of the items listed by the expert, which are viable. i.e. not all "fails" on an inspection are required to be repaired to get full retail, or an occupancy.

3. Create a scope of work and timeline for the items you need done to complete your project to your goal.

4. Do an internet search of the "cost" of items you need done. 

5. Create a scope of work for each trade (i.e. plumbing, electrical, demo, paint, etc.) with timeline and budget.

6. Be specific with the material selection. Leaving things up to "them" could get you much less than you thought.

7. Contact 5 of each trade you require and email them your scope w/ pictures and plans if possible. 

8. Make certain you provide as much detail as possible, good communication removes problems. 

9. Communicate that if your scope is incomplete for the task you are requesting a quote for you would like to be informed.

10. Add the sum of everything you have gathered and create a total budget based on a real world scope.

 You can skip many of these steps by hiring a G.C. (general contractor) but unfortunately there are not many real G.C.'s in Houston. No license requirement equates to a lot of want to be's. Those who are good, will want to be paid accordingly. As any highly sought after expert would.

You can also hire a consultant to put all the information together for you, and even assist in insuring you have the proper paperwork and protections against litigation should there be an issue arise.

I am also an investor, I was a G.C. for 20yrs in Houston, accredited inspector, Consultant for billion dollar REIT's. I know the value of good information. I pay for it all the time. As an investor I don't G.C. my own deals. That would make me a G.C. again, and I am not that.

Yes. My way is way more work than guessing. But I have also done hundreds of homes and never lost money. Ever.