Estimating Repair Costs Accurately.
When we buy houses,doing our due diligence goes a long way. Estimating Repair Costs Accurately is crucial. We are constantly asked how the process works by both motivated home sellers, not-so-motivated home sellers, and even fellow seasoned and new investors. Of course there is not one way to do this but we have developed our system that works for us.
You can easily find a ton of articles on the internet how to do this.
So to answer the countless of questions we received about what happens from beginning to end when we buy our houses, we have decided to document our latest purchase.
The property in question is in Clinton CT. Anyone living in CT will know that Clinton is a great location to invest in. Near the water, quiet, minimal crime and very beautiful. We took this into account when making our offer. This is what the property looked like (at the time we made an offer).
When we schedule the walkthrough we have just that time to evaluate whether the house is a good investment or not. When we walk through we have to figure out what repairs and / or changes need to be made to maximise profits. Changes like landscaping, tree and brush removal, wall removals, to make an open floorplan kitchen etc. etc.
Based on these changes we then estimate the repair value. We then do a market analysis to figure out how much the house is valued on the current market. With the costs of repairs and the market value of the house after it has been repaired we have enough information to make an offer. We do not hold anything back. We share all our findings and numbers with the seller so they can see where our offer is coming from. They then see that our offer is realistic and more deals are closed this way.
From this picture of the outside we immediately know what needs to be done to the external of the house:
- shrub removal
- tree removal
- remove siding and put new siding on
- replace roof
- replace garage doors