Estimating rehab costs?

Question

How can I estimate rehab costs? I’ve never done a BRRR before I have no idea what anything would cost. I think it’d be best to walk the property with a general contractor but I’d miss out on the deal. Any advice here? I’m currently looking at something with potential.

David Robertson · Answer

Hi Devin,Learning to estimate rehab costs is a process that takes time and experience.This is my boilerplate response to people for learning how to estimate rehab costs: #1 Read 'The Book on Estimating Rehab Costs' JScott's 'The Book on Estimating Rehab Costs' is a great resource for new rehabbers to learn how to Estimate Repair Costs on 25 common rehab repairs. https://www.biggerpockets.com/store/the-complete-g... #2 Explore Lowes and Home Depot to Learn About Material Pricing Take a tour through Lowes and Home Depot (or their websites) and look at finishes materials and fixtures that you will consider using in your rehab projects. This will help you get a better idea of what tile, hardwood, carpet, plumbing fixtures and light fixtures costs for your rehabs. #3 Contact Local Contractors for Labor Pricing Call local Subcontractors and get budget pricing for common repairs on your typical rehab project. For example, call a roofer and ask what their average cost per Square of Architectural Asphalt Shingle Roofing would be on a 1,500 sf house, with a 6/12 pitch. Note: Some contractors will be reluctant to share pricing without seeing the property, but tell them you are just looking for a rough budget number you can use on future projects. #4 Compile Your Prices into a Spreadsheet or Estimating Software Once you start to get a better understanding of Labor and Material costs you will want to store this data into a spreadsheet or software that you can use to help you streamline the estimating process. The Book on Estimating Rehab Costs comes with a spreadsheet that you can use to help you populate your own database of labor pricing and material pricing. Or you can download my estimating templates I have in my Biggerpockets fileplace: Simple Estimate Spreadsheet Detailed Estimating Spreadsheet There are other Estimating Softwares available as well which can help you manage the Estimating process as well... #5 Practice, Practice, Practice Walkthrough potential rehab properties (or find properties virtually online) and practice creating detailed scopes of work, quantifying repairs and estimating rehab costs for the projects. #6 Get Your First Rehab Project You can practice all you want, but ultimately you will learn the most about estimating rehab costs by actually rehabbing a house. Getting your first rehab project will require you to create a SOW, talk to contractors, compare and review bid proposals, review budgets, & make countless trips to Home Depot.​You will inevitably make mistakes and underestimate things, but you will learn 90% of what you know by just doing your first rehab!If you aren't comfortable estimating costs on your own or aren't willing to put in the work to learn how to estimate rehab costs then you need to Team-Up, Partner, Or Hire Someone Who Can Help You Estimate Rehab Costs. Pay A GC For A Consultation And Property Walk Through You can hire a General Contractor to provide a consultation to walk the property for you and provide an detailed estimate breakdown of what they would charge for the repairs to the property. Expect to pay between $100 to $300 to have a contractor provide a consultation. Partner With Someone That Has Construction Experience To get your feet wet, you could partner with another house flipper, contractor or construction professional that could help with Estimating Costs.

Shawn Alexander · Answer

@Devin MonroeHey buddy,Ok so I do most of my work, I can tell you first hand if you don't intend on doing the work yourself get multiple quotes. Ask for references, ask if they cert their work, and also ask if they have a facebook page where you can see their current work.If your walking into a home at least in my market. A fair size kitchen 10x15 is going to cost you roughly 10k. A bathroom 7x10 will cost you 5k. 1/2 bath will cost you 1500-2500. AC installed into existing furance roughly 3k. 90 liner feet of drain tile and sump pump about 4-5k. 1500 sqft roof roughly 7-9k. 1000sqft of carpet roughly $1.5 per sqft, thats with old carpet removed. I've seen other people judge it with this method. Lipstick fix (fresh paint, carpet cleaning and minor landscaping) $5 per sqft Minor gut (replace carpet, repair a window, replace a door, fresh paint, install new appliances, repair a section of fencing) $10 per sqftMajor gut (remodel kitchen, bath, major cap ex IE roof, furance, ac repair/replace, fresh paint, new carpet) $20-$30 per sqft.Again if you are not going to do the job yourself, I would suggest to at least be the general contractor yourself. Most general contractors takes the stress off of your shoulders and they handle the other contractors that will be needed for the job. You will be paying for that service. I would atleast add another $2-$3 per sqft if you will be using a general contractor.Also be completely clear on what you want done and your expectations., make sure they will grab the proper permits required by your city.I always make it completely clear when I want a job done, now I know about how much time it takes to do these jobs so I add %20 to that you never know what comes up and most of these good contractors always have the next job lined up. I pay material cost up front. Labor cost come after the job is complete and meets expectations, I've worked with my HVAC guy four times now on personal homes and my investment SF home. I pay %75 up front since I know his work and he knows my expections. I hope this helps!