Wholesaling 4 Newbs: General Contractors Estimates Too Expensive?

[Cody Evans]

I want to start dialing the phone on my leads. It has been about 5 days since I have hit the roadblock of how to estimate repair costs. My current plan is to 

1) Use a real estate agent and get comps for neighborhoods I found houses in. 

2) Call and negotiate with sellers by asking what repairs are needed and subtract that cost from a (.60 ARV) and give them that as a first offer OVER THE PHONE. If they dont accept: Ḧow close can you come to that number? If there counter isnt low enough I say ¨thank you very much, if you are interested somewhere down the line give me a call.¨ If the numbers work then I schedule a meeting at the property ASAP.

3) Call a GC and schedule them to walk through the property with me to estimate costs on that meeting date. I lower my offer based on these estimates. Go through signing of Purchase to Sale agreement right there.

4) Contact my buyers and let them know whatś CRACKIN!

I am concerned as this is my first deal and low on cash (only 4k in bank) that I will be wasting a lot of money on GC estimates. Shouldn´t these estimates cost me $100 for the whole house? What do you guys think?

[Grant Rothenburger]

The only reason I talked to sellers was to find motivation. If they had some, schedule a walk through. Asking them what their house needs will get you nowhere. I've been there more times than I care to remember, seller tells me it needs paint and carpet, I get there and it needs $30k in repairs lol. 

As for the contractor question, @Marvin McTaw was dead on, figure out good, conservative, ball park numbers. For instance, in my market a bathroom rehab I always estimated $5k. Most of the time it is less (about 3,500) but I'd rather be high on the rehab estimate than low, and if it has bigger problems than visible and/or is a bigger bathroom that $5k goes quick. You really don't have to be exact here, and always try to be too high rather than too low. Never lower you rehab estimate just to make it seem like a deal.