Good ways to figure out rehab costs

[Matthew Sipes]

Hi Everyone! I know the book of estimating rehab cost is a good one, but is there any other ways to figure out how a rehab will cost?

[Will Barnard]

Originally posted by @Bruce Woodruff:

Originally posted by @Matthew Sipes:

Hi Everyone! I know the book of estimating rehab cost is a good one, but is there any other ways to figure out how a rehab will cost?

Why don't you just get a bid from a GC. He will give you an exact price.... You have no obligation to use him.

 Bruce, Imagine you are a contractor, are you OK with giving free bids to would be flippers all the time without any guarantee you get the job? I do free bids all the time but I am certainly not going to give a rehabber a free bid so he can make his offer in hopes I may get the job (which is likely a 5% or less chance).

I have posted many times on BP on how to estimate rehab costs (I wish I would have saved the best threads for it to repost). Basically, you need to get your hands on a spreadsheet that has all the basic items in a rehab. You then need to fill in what each line item will generally cost depending on your finish levels and then you need to go to open house after open house and practice filling it out noting each item that would need to be remodeled/upgraded. One of the best tricks I used was to chop up the home into sections. Doing this allowed me to walk into a prospective purchase and walk out 15 -20 minutes later with a number in my head that would more often than not be within 10% of what it actually cost. This of course takes time and lots of practice.

As an example, in your spreadsheet, take each line item associated with a bathroom and add it up. Lets say it comes to $10k. When you walk into a rehab potential which has 2 bathrooms, you know instantly in your head you have a $20k tally started. Do the same for the kitchen, same for windows (know the cost per window and multiply by how many windows in each opportunity) - same for interior doors, etc. Know the cost per linear foot for base/case, know the average landscape costs, roof, AC, etc. When you break up the home into sections and you know the costs in your head (or on paper) ahead of time, it is easy to add it up as you walk through. Things get a bit more complicated for hidden items or moving walls, etc. but this should give you a great start.

There is a checklist I uploaded here on BP many many years ago which is very popular and still available here to get you started: https://www.biggerpockets.com/...