Since you’re in the middle of a rehab project, I thought you’d be the best person to answer this question:
What is the best way for a newbie RE Investor to gain experience regarding estimating the repair costs of a potential deal?
Are their books or courses out there that can be helpful?
The reason I’m asking is because I intend to be looking at quite a number of properties before I put in an offer, and as much as there are contractors who would give a free estimate, I’d not want to use them all the time knowing very well I will not be rehabbing them, but flipping them to a rehabber……
Looking forward to hear your answer.
Wholesalers need to be able to estimate rehab costs as accurately as possible, but it is one of the steps many new investors are nervous about.
The best way to know the rehab costs is to go through with a couple contractors. When you are starting out, make connections with a couple qualified contractors. When you walk through with them, make it your goal to 1) find out the scope of work for that particular house, and 2) learn how the contractor calculates the rehab costs for future projects. So, pay attention.
Make a list of everything that needs to be fixed and take note of how much he prices individual projects. Create a master pricing list of anything a rehab could possibly need. This allows you to check off what the house requires and quickly add up the costs without a contractor by your side.
If you don’t pay for the estimates, a great way to reciprocate is to promote the contractor with your wholesale deals. Establish an agreement that the contractor will honor the estimate for the rehabber you assign the contract to.
Practice, Practice, Practice.
It took a few deals for me to get used to it, but now I am at the point where I come up with an estimate in less than 15 minutes—the time it takes to walk through a house.
To answer your other question, yes, there are resources that can guide you through your first rehab estimates. If you attend any wholesaling or rehabbing course, it is common to receive extensive information about rehab estimates. We usually send out our rehab cheat sheet to attendees at our seminars. We also have a few wholesaling workshops coming up. I think this would be very useful to you.