When you're Analyzing the Property for Repairs

[Account Closed]

I've been through quite a few properties thus far and have gotten pretty good on my estimates but there's still this gray area that continues to make me ever so slightly doubtful. 

What do you consider something that may need attention? 

For instance, some properties may have walls with decent paint still (albeit uniquely chosing colors and not your simple whites) that may need a cleaning but could arguably need an entire top to bottom job. Do I estimate paint in the repair costs or keep it as a small cosmetic fix/cleaning and the current paint/color remains? Or maybe the property has a good kitchen that is completely functional and liveable, but a little out of date? Do you consider this a remodel, or still ok- use it? 

I suppose it's like the saying, if it's not broke, don't fix it. I feel like some aspects of a property I may or may not add into repair estimates, may or may not need included and I could have much more solid prices/offers. X could say it needs a kitchen remodel, W could say nah, doesn't need it (but it's apparent it's out-dated by the naked eye). Maybe W says it doesn't, so that remodel estimate isn't included in their repair list. Now they have a buyer but they're on the contrary about the kitchen remodel and insists the price may be skewed. 

Did I lose you yet or you still with me? Haha. I hope I explained it for you guys to understand my current conundrum. Thanks ahead of time for any and all of your input! Much appreciated.

Regards,

Ryan Andexler

[Jake Thomas]

@Account Closed Good question with many possible answers. 

When I estimate rehab costs it's sometimes best to estimate on the high side to cover all your bases. Your example regarding painting a wall vs cleaning it, I would add painting it into your costs. The kitchen example is a difficult one to answer. Sometimes you can get away with painting cabinets and changing counter tops etc. for a lower priced home. But if it is a higher end home ($200K+ in my market) I suggest new cabinets as that is what the competition has done. 

The process of estimating rehab costs is always that variable a end buyer takes into account when buying from a wholesaler. Just get as close as possible and be honest to the buyers what you feel the home needs but in the end they will make the final decision. 

Good luck.