[Calc Review] Help me analyze this deal for Flippers

[Larry Lee]

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*This link comes directly from our calculators, based on information input by the member who posted.

What is your go to for estimating costs for rehab?  I know a lot of you make offers through pictures and in other cities and that is my case here.  Trying to get some best practices on estimating costs without viewing the home.  

This home is 1800 sq ft and built in 1976.  With new appliances and a full update could we get the repair expenses under $30k?
I am checking to see when the last time the roof was done, but not including that into the $30k. 

[David Robertson]

Hi Larry,

It's hard to say if your $30k budget is too low or not, without knowing the scope of work of the project.  

I have done several full remodels of houses around 1,500 to 1,800 sf (new kitchen, new bathrooms, new flooring, new paint, new windows, new fixtures, new wiring) here in Kansas City and they were all over $40k+, so I have a feeling if your SOW is similar you will likely be over $30k.

The only way to truly know is to put together at detailed list of each individual repair that needs to happen on the property.

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 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 $200 to $500 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.