TOP 5 MOST FAQ
How Do I Estimate Rehab costs and Where Do I Start?
This is one of the most frequently asked questions by new house flippers. Learning to Estimate Rehab Costs is a process that takes time and experience.
Below is a list of my 9 Tips to Learn How to Estimate Rehab Costs
#1 Read the Book on Estimating Rehab Costs
#2 Explore Lowes and Home Depot to Learn About Material Pricing
Take a tour through Lowes and Home Depot (or their websites) and look at finishes materials and fixtures that you will consider using in your rehab projects. This will help you get a better idea of what tile, hardwood, carpet, plumbing fixtures and light fixtures costs for your rehabs.
Once you find the materials you want to use in your rehabs, put the material pricing into your Estimating software or spreadsheet that can be used for future reference.
#3 Contact Local Contractors for Pricing
Call local Subcontractors and get budget pricing for common repairs on your typical rehab project.
For example, call a roofer and ask what their average cost per Square of Architectural Asphalt Shingle Roofing would be on a 1,500 sf house, with a 6/12 pitch.
Note: Some contractors will be reluctant to share pricing without seeing the property, but tell them you are just looking for a rough budget number you can use on future projects.
#4 Use Our Estimating Software & Databases as a Starting Point
Once you start to get a better understanding of Labor and Material costs you will want to store this data into a spreadsheet or software that you can use to help you streamline the estimating process.
Our Estimating Software comes pre-built with a database of over 500 common repair items and unit prices that can help you get started. You will want to customize your database with your own personal pricing that fits your specific market, materials and specific project needs.
You can then use our Estimating Software to practice estimating rehab costs for potential rehab projects.
Learn more about our Rehab Repair Cost Estimator Tool
#5 Practice, Practice, Practice!
Walk through potential rehab properties (or find properties virtually online) and practice creating detailed scopes of work, quantifying repairs and estimating rehab costs for the projects.
Use our Estimating Software to practice estimating rehab costs for potential rehab projects. This will help you get acquainted with common rehab repairs, rehab costs & estimating terminology.
#6 Get Your First Rehab Project
You can practice all you want, but ultimately you will learn the most about estimating rehab costs by actually rehabbing a house. Getting your first rehab project will require you to create a SOW, talk to contractors, compare and review bid proposals, review budgets, & make countless trips to Home Depot.
You will inevitably make mistakes and underestimate things, but you will learn 90% of what you know by just doing your first rehab!
Okay, But What if I'm Currently Not Comfortable Estimating Rehab Costs on my own?
If you don't feel comfortable estimating rehab costs then you need to team-up, partner, or hire someone who can help you estimate rehab costs.
#1 Pay a GC for a Consultation and Property Walk Through
You can hire a General Contractor to provide a consultation to walk the property for you and provide an detailed estimate breakdown of what they would charge for the repairs to the property.
Creating Estimate Proposals can take Contractors several hours to create, so be respectful of their time. If you don't have the property under contract you will likely have to pay the Contractor for their time ($150 to $300).
#2 Partner with Someone that has Construction Experience
To get your feet wet, you could partner with another house flipper, contractor or construction professional that could help with Estimating Costs.
In a partnership, both parties need to bring something to the table...If you don't have construction experience, what experience or skills can you offer to the partnership?
#3 Hire an Employee
You could hire a part-time or full-time employee that has Construction Experience that could handle the process of estimating the repairs and creating the Scopes of Work for your projects.
NEXT: hidden costs of construction
Remember, learning to estimate rehab costs takes time and experience, so if you aren't willing to put in the effort to learn how to estimate rehab costs then you need someone on your team to take on this important task.