How to Estimate Rehab Costs For Your Fix and Flip
Have you ever noticed that a gallon of milk costs the same in just about every store?
The same goes for a gallon of gas.
And a loaf of bread.
Economists call this “pricing efficiency”.
Unfortunately, there’s nothing efficient about estimating rehab costs. Pricing for labor and materials can be very difficult to estimate. That’s why we came up with this method to help you be more accurate.
The 3 Types of Rehab
In order to make the process more simple, we’ve identified the three types of rehabs you’ll likely encounter as a fix and flip investor:
Basic cosmetic rehab
Advanced cosmetic rehab
The 3 Phases of Rehab
Next, we outlined the three phases of rehab:
Mechanicals (Roof, HVAC, Electrical and Plumbing)
And in this video, we explain how to estimate rehab costs for every type and phase of our rehab project.
Check it out:
We’ve learned from fixing and flipping houses in two states (Arizona and Wisconsin) that while material costs are similar, labor costs can vary greatly based on your location.
But the truth is, there’s no substitute for experience. These days, we make our rehab estimates based on the rehab budgets of past projects.
Action breeds clarity. So sharpen your pencil the best you can and get started now.