This week, we’re going to talk quoting rehab. When you go check out a house for the first time, you will need to do a quick walkthrough rehab estimate. In my case, when I get a house on my radar and go check it out, I spend ten minutes in the house at most and add up rough estimates of the numbers in my head–it’s not scientific, but it gives me a ballpark of what the rehab would cost. I’ve done this for many years, so my quick estimates are generally pretty spot on. I want to explain to you how I do this.
Today we’re wrapping up this series. Like I explained in the first part of the series, this is something that you do right before you place a bid on a house, especially if you’re new. For more experienced investors, you might do this or have your realtor do this after you place an offer.
Most of the time, real estate investing, if done well, is relatively routine and predictable. That’s why you see successful investors flipping 80 or even a hundred houses a year! If you’ve done that many flips and they’re all similar, you’re comfortable placing offers without even stepping into a house.
We’ve gone through evaluating the exterior and interior of a house, and to wrap up you need to add those two estimated costs together. Like I’ve said, the inside is infinitely more important than the outside. A lot of times, just to be really conservative and avoid surprises because I’m quoting my expected profit to a private investor, I’ll bump up my estimate by a few thousand dollars. That way, I’m guaranteed to meet or exceed my target profit.
During these walkthroughs, I don’t bring a tape measure or anything, so I want to be very conservative as I make rough estimates. Don’t worry about rushing through it, especially if you’re starting out. When you’re new, I suggest you do this walkthrough before you even place a bid. It’s worth ten minutes of your time.
Thanks again for this emailed topic request from a listener! If you have any questions or suggestions for the show, please make a comment or email me at firstname.lastname@example.org and I’ll be sure to try and help.