Estimating Repair Costs

[E. Jacobs]

Hi everyone- I'm trying to start my wholesaling business this summer but I must say I have absolutely no experience or knowledge about rehabbing or its associated costs. I want to be able to walk through a house and know what to offer based on accurate repair estimates and market value using comps. But if I don't know how to estimate the repair costs, what should I do? I know I will eventually learn from experience but I don't want to let this slow me down. Should I try to add a contractor to my team at the beginning to do walkthroughs with me and estimate the repairs? I could refer business to him from my investor network and also give him a cut if I close on the deal. Or should I ask the seller to estimate the repairs and pass that number along to potential buyers and tell them that's what the seller estimated? Does anyone have any advice here?

[Sage Jankowitz]

I'm a fairly new wholesaler with about six months experience and I ran into the same problem. About three months in I connected with an experienced general contractor who has worked on a number of rehabs for many successful investors in my area. He's looking to get into his own rehabs ASAP, so we came to an agreement: Anytime I find a qualified property he'll check it out with me and estimate repairs free of charge. He'll have first dibs on any property I get under contract, but if he doesn't want it or can't get the funding within a week, I open it up to anyone on my buyers list. It's win-win because he gets to look at qualified leads for free all the time and has first dibs on every property I come across. And I get free estimates and a wonderful education in the process.

I've learned quickly that it's all about forming partnerships and alliances to help one another out. Find out who you need on your team and then ask yourself, what can I do to help them? Offer your benefit to them first and then ask if they can help you (most newbies get this reversed). You'll have much more success then trying it the other way around!