Most newbie investors are scared of making offers because they are not sure of the repair costs. This is completely understandable if you did not come from a construction background. I would venture to say that if most newbie investors were comfortable with repair estimates, then they would be way more comfortable making offers.
There is a way to quickly estimate repairs if you break the repair cost down into major components vs. miscellaneous items. Here is a list of what I consider Major Components:
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- Roof
- Windows & Doors
- Paint Exterior
- Paint Interior
- Carpet / Flooring
- Kitchen
- Baths
- Electrical
- Central Heat / AC
- Plumbing
- Foundation / Basement
- Garages
- Steps / Decks
- Dumpsters / Cleanout
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Estimating Repairs for Rehabs and Wholesaling
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Everything else is considered a Miscellaneous Item. If you know the total cost of all the Major Components, then I take 25% of that number to determine the Miscellaneous Items and add the two together. This will give you a general ball park number so that you are able to make an offer. However, never close on a property until you have an experienced contractor give you a bid or double check your numbers.