How long on average does it take to evaluate a property?

[Jose Diaz]

Hello to all. I am new to RE and am interested in wholesaling to begin with. I have been reading Than Merrill's new book "The wholesaling bible". In the book he stresses the need to learn to evaluate properties quickly and efficiently.

My question is how long does it take on average for you to evaluate a property correctly taking as many factors as necessary into consideration? In other words, how quick is quick?

I currently have a full-time job and would like to know how to effectively manage my time.

Thank you ahead of time.

[Derek T.]

When I first started out I had an Excel spreadsheet that I adapted from either J Scott or Brandon and I used this to evaluate deals. I used HomeWyse to get good labor figures and time estimates for how long each part of a job would take. Then I went into Home Depot to get a cost of materials I wanted to use. So for instance HomeWyse says it takes roughly 2.5 hours to replace a plumbing fixture and I am willing to pay $50 an hour for labor. So my labor costs would be $125 and then my material cost would be $100 for a bathroom faucet or $200 for a kitchen faucet. So in all to replace a plumbing fixture it would cost my $225 for bathrooms or $325 for kitchens. So when I evaluated houses I just had to count how many fixtures needed to be replaced.

My Excel spreadsheet had everything divided in labor and materials. I did this for everything from framing, permits, drywall, lighting, rough electrical, rough plumbing, rough hvac, finished electrical, finished plumbing, finished hvac, flooring, carpentry, roofing, siding, exterior finishes, etc.

Now it is different. I compare it to your wife going to a grocery store every other week. She knows how much her $100 will get her and she knows the cost of bread, milk, etc. The more you do this you know the more you know and can generalize estimates.

So for instance now I have a crew that I keep working from one job to the next. Their weekly salary is roughly $3500-$4000 depending on if we work 5-6 days. So if a job if going to take 5-6 weeks I know I have in between $17,500 and $24,000 in labor costs with my crew. I know my material costs....so my cabinets will cost around $3000, my granite/backsplash/sink will cost around $2000, refinished floors will cost around $1500, appliances $2000, new floors through will cost around $4000, carpet will cost around $1500, interior doors around $50 a door, exterior doors around $200, windows around $160, etc, etc, etc,. Add the specialists (plumbing, electrician, HVAC) via bids but they are normally a few thousand each for the plumber and electrician. So I know to do a rehab the way I want it will cost roughly $40k for a 5 week job. If I have to add roof, siding, furnace/ac unit then I just add it to my $40k budget. The more you do it the more it becomes like going to the grocery store already knowing what you will get with your $100.