Flip tip - How to estimate repairs in under 10 minutes

How to estimate repairs in under 10 minutes

By: Kris Ontiveros

Real estate investing is a math equation. To come up with the correct outcome you need to have accurate numbers. The two most vital numbers are the ARV (after repair value), this is home much the home is worth once it is remodeled. This is usually going to be a top of the market value. The second of the two vital numbers is repairs, how much it will cost to remodel the property.

In our current real estate landscape, there is a lot of competition and the good deals go quickly. As a Real estate investor you have to make quick decisions when you come across a new deal. It is vital to be able to give a seller or wholesaler a quick yes or no decision when they bring you a deal.

We created a process to be able to quickly and accurately estimate repairs. We use several factors to quickly and safely estimate repairs. With this system we can walk through a property and within 10 minutes have a good idea what it will cost to remodel a property. We can take that information and the ARV (after repair value) to help create your offer.

Be aware, every market is different, these numbers represent single family homes, under $200,000, in the Phoenix, Arizona area in 2016. Markets are constantly changing, you will need to adjust this formula to match your particular market.

The first thing we do is find out how much a basic cosmetic remodel would cost. In an average neighborhood in my market, I estimate $10/sf. So an average 1500sf house would cost around $15,000.

A basic cosmetic remodel can include flooring, paint, lights, fans, faucets, light landscaping, and a few miscellaneous items.  

Next we add in all other major items like:

$4,000 for a new kitchen

$3,000 for a new bathroom

$5,000 for new shingles

$3,500 for a new AC unit

Anything on top of the cosmetic items need to be accounted for. Major remodels should be over estimated to make sure you don’t miss anything.

Example property:

1500sf 3 bedroom, 2 bathroom home. Needs a cosmetic remodel plus a kitchen, 2 bathrooms, and a new AC.

1,500sf x $10 = $15,000

Kitchen = $4,000

2 bathrooms = $5,000

HVAC = $3,500

Total estimate = $27,500

This is not going to be your final budget. This will give you a good idea of what the rehab will cost. Once you have this number you can plug it into your formula and make a solid offer on the property. Once you have it locked up you can get your contractor out to give you hard numbers. In this business you have to take calculated risks, estimating repairs should be one of your more reliable and consistent costs. It's important to get very good at estimating repairs so you can take your business to the next level.

Kris Ontiveros - Real Estate Investor - krisonti@gmail.com

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Flip tip - Don't trust your contractor!

By: Kris Ontiveros

In this video we are discussing a huge pet peeve of mine, cheap contractors! When you give 100% control to your contractor things can go wrong. In this scenario my contractor went cheap on me and didn't order a drawer bank for the master bathroom vanity. Now don't get me wrong, this is 100% my fault because I didn't have a detailed conversation with my contractor. Instead I was vague and let him run with it. Now the cabinets have granite and sinks installed so it's too late to add the drawers. Next time I'll be more specific and tell him exactly what I want, I can even provide him with a SKU or item number for him to order.

We have lots of free tips for real estate investors and flippers.  Instagram @azflipguys or  www.Facebookcom/azflipguys

Fix and flip tip - Master bedroom upgrades

By: Kris Ontiveros

In this video we are discussing some upgrades we like to add to our master bedrooms. This is a very important room since it's the room the decision makers will be spending a lot of their time in. It's important to have a large master bedroom. The larger the better but we like to have a minimum 12x12. When we build or add on square footage we go even bigger than that. This particular property is 16x16.

We like to add light so we include extra can (recessed) lights in addition to our fan/light. We always add an additional switch for everything (cans, fan light, fan). We are already in there, it doesn't cost much to add additional switches. We also like to add a raised outlet where we think the TV will be hung. On nicer properties it's even worth buying a 50" wall mount TV for staging. You can usually find a deal online or at Walmart for a cheap version around $400.

We also like to add in ceiling speakers so they can have surround sound. If you go to a regular electronic store they are expensive. I found a few great deals on Ebay. I can usually buy them for $20-$25 each. Here is my most recent purchase. (July 2016)

Another feature we added in this property was french doors. When possible, we open up the master bedroom to the outside patio by adding french doors. Having a bedroom open up to the outside is a huge plus.

We try to stand out from our competition. This is what we do in our master bedrooms. Adding a few "wow" features can make a house that much easier to sell. Buying a home is an emotional experience, you want your buyer to have a great feeling when they step into your fix and flip and get the warm fuzzies in their stomach. That's when you know it's SOLD!

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