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Investing Strategies

Repair Estimates: Don't Leave A Property Without Them

Want to learn step-by-step how to find, fix, and flip nice houses for MON$TER paydays? Learn more here.

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compassHow can you avoid overpaying for a house?

The same way you avoided failing high school algebra: Do your homework!

Fortunately, the math for estimating a property’s value is often much simpler than the mathematics of high school algebra (remember the quadratic equation?!)…

…but your homework in these “real world” assignments often involves much bigger values.

And if you forget even the simplest of steps during the course of your due diligence as a real estate investor, the consequences of your mistake can cost thousands of dollars.


The math may be simpler now, but the stakes are much higher.

countYou Need a Strategic Approach to Number Crunching

With that in mind, Mogul faculty member Bob McIntosh recommends a very strategic approach for estimating repair costs at any rehab project you consider purchasing for your real estate portfolio.

Affectionately known as “The Red Headed Rehabber”, Bob has years of rehabbing experience under his belt, and he has already provided Mogul with two very helpful lessons about his unique craft:

So check-out the video below for Bob’s latest hard-hitting (“no B.S.”) marching orders regarding rehab cost estimates.  This stuff is invaluable for any investor who wants to maximize his renovation-related profits and get straight A’s in rehabbing…

…and, for extra credit, Bob even provides a checklist of commonly overlooked items to include in your own repair estimates.

From Bob McIntosh, the Red Headed Rehabber…


{Mogul Elite: Download a transcript and MP3 of this lesson in the Power Pack tools for this lesson.}

Do It To It! Immediate Action Steps

Be efficient. Before visiting a prospective acquisition, ensure that your checklist for repair estimates is efficient and easy to use (including the flexibility to capture various quantities and prices for each item needed).

Be organized. Don’t forget to include (i) the street address and (ii) the date of your exploratory visit with each inventory of repair estimates.  (Otherwise, you may confuse one property’s needs with another’s!)

Be size-sensitive. Record the size and square footage of each property you visit, in order to better understand your normalized costs (on a “per square foot” or “per room” basis) in each market you select.

Be comprehensive. When estimating repair costs for a prospective acquisition, be sure to include every area of the house.

Be informed. Don’t hesitate to call contractors for their best estimate about the cost of any necessary repairs.

Be disciplined. Use the information above to calculate a Maximum Allowable Offer (ARV x Desired Profit Margin – Estimated Repair Cost) for each property you consider.

Be aware of your surroundings. In addition to using your repair estimates to calculate Maximum Allowable Offers, investigate the value of neighboring properties (“comps”) to guide your negotiations with sellers in each market.

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