Getting a handle on fix up costs

[Ronald H.]

I live in Saugus, Massachusetts and I have built up a Cash Buyer's list of Real Estate Investors. The list has not been tested, although, I do occasionally research what is going on around my area by using the Internet to see what transactions have recently occured. At one time, I had a database of sold properties with all the information I would need but now I am in the middle of an estate matter for my mother who had a stroke and appointed me P.O.A.

I know some contractors, although I do not know any of them particularly well. All these contractors want a fee in order to do an estimate.

What is the most efficient way of estimating fix up costs. I would go down to Home Depot and look at the cost of items down there but I probably would not be able to anticipate all the required materials that would be needed for any given repair since I have not been trained in this area.

Any help from someone who does this all of the time, would be extremely helpful to me. Thanks in advance.

[Will Barnard]

You may think it is BS, but put yourself in the contractor's shoes: How would you feel if you had RE investors asking you to perform all kinds of free bids on porjects that the investor did not already own or control (contrrol via purchase contract)? You would be doing a ton of work for free with no pay-off guarantee and I for one do not work for free.

That said, if you already have developed a relationship with a contractor (relationships are key in this business!) and have given a written (or if acceptable to contractor, verbal) guarantee that any investment you take down, the work will go to that contractor, then I am sure they would be willing to do several bids for the chance to get the work on the first accepted deal.

If not that, you must gain the expereince necessary to estimate rehab costs yourself. This is developed by walking through tons of REO properties on the market and practicing. Have a punch list of repair items and start making notes for what each item costs, materials and labor. Over time, you will have a complete list of repair items with costs and be able to properly evaluate repair costs fairly closely to a contractors bid.