ESTIMATING REHAB COSTS - Posted by NickB

import · February 19, 2001, 6:56am

Posted by Rafael on February 20, 2001 at 09:31:18:

I really love this idea!!! Great thinking!!! I’ll most likely be using this one while I get started, and this idea alone takes a lot of fear out of being wrong…

import · February 19, 2001, 6:56am

Posted by NickB on February 19, 2001 at 07:56:18:

How do I estimate the rehab costs on a property if I am a new investor wanting to flip properties(I have very little knowledge of building costs)?

I have read Joe Kaiser mention that he sometimes uses the “Contractor Factor” technique (Taking along his own contractor to do a quote). How will the contractor benefit from going along if you are going to flip the property anyway(and he won’t get the contract work, as the retailer will probably do their own rehabs)?

import · February 19, 2001, 4:04pm

Re: ESTIMATING REHAB COSTS - Posted by Ron (MD)

Posted by Ron (MD) on February 19, 2001 at 17:04:02:

Nick,

Joe Kaiser knows more about RE than I ever will, and the method you mentioned sounds reasonable enough. In fact, it probably is a great idea if you use the right contractor. That’s the trick, though.

If you know a contractor who does decent work at investor prices, it’s probably a good idea. However, contractor prices (and work) vary considerably.

I just got four prices on a rehab. One of the contractors has done several jobs for me, so I can trust the quality of work. His price came in within a few hundred dollars of my $14k estimate. The other three estimates? …$22k, $23K, and $24k. I have two other contractors that I know would do this job for $13k or $14k. (I’m looking for another contractor because I’m buying more houses than my two regular contractors can fix them.)

So, if the contractor that teaches you pricing is my $14k guy, you’ll be fine. If it’s the $24k guy, you’ll have hurt yourself more than helped.

Ron Guy

import · February 19, 2001, 3:29pm

Re: ESTIMATING REHAB COSTS - Posted by IB (NJ)

Posted by IB (NJ) on February 19, 2001 at 16:29:24:

Good question. I would offer to pay the Contractor a fee (about $100) and promise to refer his services to the buyer you flip to. Anyone else?