How can a wholesaler afford inspections on multiple leads?

[Benjamin Shaw]

Hi BP,

I'm just getting into REI and of course, the subject of wholesaling is interesting, if not eventually a necessary thing if you are getting more leads than you can handle flipping or other ways.

So I just bought the two books on flipping and estimating rehab costs, and after glancing at the rehab book I see that in order to very accurately estimate the costs, you need to either be extremely good at everything or hire multiple professionals to take a look at things like the foundation or septic.

How can a new wholesaler afford inspections in order to get accurate numbers if they are looking at a lot of places? I also read the book on low and no money down deals and did not see any mention of this.

Thanks,

Ben 

[Jose Flores]

Hey @Benjamin Shaw How do you estimate repairs? First, you don't need to know everything. When you walk into a house you need to know what the major components to look for are. Second is as you are looking at those components you need to know what the materials would cost at Home Depot and if you were to call a contractor what would they charge for labor. I have generated a list of all the material cost that you would expect to pay at Home Depot. Now that you know what material cost is we can move on to labor. There are two things you need to understand about labor cost. One is that many contractors will include material and labor in their estimates. That is why the material list is important because it allows you to easily subtract the material cost from the estimate to calculate labor cost. Second, is that there are two types of labor prices; retail home owner and investor friendly. Know what to look for; know cost of materials; and know cost of labor. A rehab checklist helps you accomplish this. So find yourself one to use as a guide.  

Next, I want to tell you most wholesalers don't understand that estimating repair cost is one of the five skills to be a pro at wholesaling. Given that you are very smart to develop this skill. Before developing a rehab checklist highlighting my costs for materials and my costs for labor on the 20 major components of a rehab I would contact a contractor on Craigslist or when driving for dollars and tell them this- "Hi my name Jose and I wholesale distress property. I must give an accurate rehab cost to my end buyer who will rehab the house. If you would take a look at the house and write an estimate of repair costs I would share your estimates as a bid on the jobs to be done. Now I can't guarantee he will use you but it may be a way for you to generate business. Is this something you would be interested in working with me on?" It has worked for me several times. Hope this helps.