Can you eyeball a listing and estimate costs?

Question

I've never done a rehab before - just own vanilla townhomes, collect decent yet problem free rent but I've continuously tried and failed at obtaining a flip home. Anyway....I'm asking what might be a dumb question but then again maybe not. For those of you who are experienced - are you able to look at a listing, and come to a rough rehab budget? Again- ROUGH. Here's a listing as an example: (Disclosure: I have ZERO interest or ownership or anything with this listing. It happens to be 40 mins from my house is all. )

https://www.realtor.com/realestateandhomes-detail/4308-Conco...

Just based on what you see in the pictures - are you able to have a mental idea how much it will cost to rehab and if so how do you come to that? Thanks

John Chong · Answer

I would eyeball around 50-60K too without knowing about the condition of the major items like HVAC, roof, foundation, plumbing, and etc. I'm seeing a full trash out, new floors throughout, new paint, full bathroom and kitchen updates, appliances, roof looks like it needs to be changed soon, landscaping, and etc.

Evan Polaski · Answer

@Mel Park, I would say: with experience, you can start to "eyeball" listings from photos. But all you are getting from that is "is it even worth my time to tour?"For this one, for instance, I can tell I have a kitchen rework, 2 bathroom guts, at least some window replacements, a lot of landscaping cleanup, entire interior repaint. That alone will cost me $50-60k, and that is assuming HVAC, roof, foundation, mechanicals, electrical, plumbing are all in great shape.So asking $320k, minimum $50k work needed (this is my condition of properties, others may be fine with less). If I know I will end up with a house worth $400k or less, I wouldn't waste my time. If a nicely renovated house in this area would be worth $500k+, and I can get good rents, I would tour it to refine my numbers.

Account Closed · Answer

I'm good, but I'm not THAT good.I can't tell how old the plumbing is, whether it's knob and tube wire, or 60amp, 100amp, 200amp service, can't figure the heating & AC, can't tell how many floors and doors need to be replace, trim looks beaten up, if it has asbestos or lead paint, may have water damage, can't tell what's gone on in the attic, can't tell if the windows are a problem, roof looks like it's time to replace so we don't know how much rot and mold we'll find, no guess on the sewer/septic. Could be trees overhanging the house and root intrusions.So, what do I win? ;-)

Sean Richards · Answer

Personally, I would shoot for a more "cosmetic" flip than a flip that requires $100k+ in renovations. Those older houses come with a lot of unexpected problems when you start opening up walls/redoing major systems. What's your market like when it comes to houses built after 1980-1990? I've found that although the margins might be smaller, the turn around is a lot quicker. A $15k-$20k profit doesn't leave much room for error for a reno that size.

Mark Williams · Answer

Hey Mel, Assessing the rough rehab budget for a property just from pictures can be a challenging task, even for experienced investors. It's not a dumb question at all, and there are many factors to consider. To get a more accurate estimate, it's crucial to have a reputable contractor or two physically inspect the property. They can provide insights into any unforeseeable issues, which are common in rehab projects. Contractors also stay updated on current material costs, which can fluctuate. It's generally wise to err on the conservative side when estimating rehab costs, especially with a significant investment like a flip home. So, while pictures can give you a general idea, having a professional assessment is key to making more informed decisions. Good luck with your real estate ventures!-Mark

Mel Park · Answer

Any investor-focused agents out there? PA, NJ, Metro Atlanta? I'll be at the BP Con for 1-2 days in case anyone wants to meet and talk.

Alan Asriants · Answer

To do a cosmetic rehab it costs around $40/sqft for me Once you add in roofing, siding, etc, it is closer to $60/sqftThere is 1654 sqftSO about $99,240I saw that house and knew that it needed about a 100k, but that is experience (always add at least 10% on top to your calc :) )

Michael Smythe · Answer

Suggest these steps:1) Screen contractors in the area you want to invest. Negotiate a flat fee of $x for a bid. Find 2-3 you think you can "trust".2) Get a property under contract, with a long inspection period.3) Have professional inspection done, including sewerscope4) Send your 2-3 contractors in for bids5) In our experience, they will all list the same 80%, but around 20% will be unique to each. This is due to their different experiences. You'll need to merge all the bids together.6) This should cover about 90% of the SOW. You should include another 10-20% Contingency Amount for the inevitable surprises no one can forsee.

Scott E. · Answer

What you're describing is not easy to come by, but they're out there. Just keep networking. Call on every agent sign you see. Ask around. Eventually you'll find somebody who specializes in working with investors. And to be clear... you might not ever find an agent who is proficient with underwriting deals. They're also out there but even more rare. What you are looking for is at least an agent who will send you deals that are within your buy box before they send them to anybody else.

Stephen Kennedy · Answer

Hey there, Recommend working with an agent who is proficient in rehabbing properties and can walk the property for you or send a virtual tour. They can then get verbal estimates from their preferred contractors based on those virtual tours.