Learning to Estimate Repair Costs Accurately

[Samantha M.]

To find a great property it requires two things: accurate ARV and precise ERC. When learning to estimate ERC correctly I was thinking the best way to go about it is to find active rehabbers at REI clubs, see if you can tag along to a few of their properties if you get to know them.

Or call around and find general contractors/ contractors familiar with working with investors. See if they would allow you to visit properties they are working on, perhaps in exchange for future business if your wholesaling or even just offering them lunch.

Curious what others here would suggest.

[Will Barnard]

I answered this very same question in another thread. Here is a copy of my answer:

Get out to Home Depot/Lowes and start pricing out material costs for all items of possible repair on a rehab. You will need a list prepeared so that you can fill in the costs for your area. I uploaded to BP mine for all to use. Go here:
http://www.biggerpockets.com/files/user/BarnardINC/file/70-repair-cost-form
Simply fill in the costs after spending a great deal of time reseraching prices at the box stores. They also have install prices (although they are much higher than you can get by hiring outside of Lowes/HD). Then go to as many REO properties as you can and practice your skill set.

Here is some more info that should help you:
Break up the home into sections - Kitchen, baths, flooring, paint, stucco, landscaping, plumbing (including fixtures), electrical (including fixtures), HVAC, interior doors, door casings/baseboards, windows/sliders/front door, roof, foundation, misc., and garage.

Once you know what the common costs are for each area for a specific size home, you can see how easy it will become to walk in and walk out 15 minutes later with a rehab figure in your head.
For instance, I know that a full gut and remodel including new toilet, new vanity, mirror, sink, glass door enclosure, stone/tile on shower walls, etc will run me $2500 per bathroom. So if I walk into a REO deal with 2 baths, I simply add into my head $5k for the 2 bathrooms and move on to the next section. i also know it costs me around $5k to paint in and out a 1500 sq. ft home. I have these basic figures locked in my head so when I identify sections in each home needing repair, it is simply to calculate in my head.

Hope this helps.