How To Calculate The Cost Of Repairs On Any House In 60 Seconds!

in order to analyze the numbers on a distressed property either to fix and flip or wholesale to a fix and flipper it's important to know how to quickly determine the cost of repairs so that you can decide your offer price so in this video using an updated 2020 so in this video using updated 2021 numbers i'm going to show you my proven algorithm for how to calculate the cost of repairs on any house in 60 seconds coming up the real estate funding kit is out now learn how to get 100 funding for all your deals without dealing with the banks claim your free copy at myfundingkit.com if you're new here i'm jerry norton i went from dead broke to millionaire flipping houses and after doing a thousand deals i created this channel to help you master the art of wholesaling and flipping so you can live your dream life be sure to subscribe and click the bell icon to get notified when new videos are released as a flipper you know how important it is to accurately calculate the cost of repairs when considering a deal get that wrong and you could be way off on your numbers and buy a bad deal as a wholesaler bringing deals to cash buyer flippers you also need to make sure you accurately reflect the cost of repairs to make sure you actually have good deals the problem is when it comes to rehabbing houses the only way to get the exact cost of repairs is to get bids for labor and material from contractors and even that is subjective because what to fix and the grade of finishes can vary from flipper to flipper and house to house i think it's safe to say getting bids every time you look at a deal is obviously unrealistic but most new wholesalers and flippers spend way too much time and over complicate the process of calculating the cost of repairs have you ever spent hours crunching all the numbers just to make an offer and have the seller reject it and just waste all that time that is so frustrating and will limit your ability to make enough offers to get enough deals to reach your goals instead you need to be able to accurately calculate the cost of repairs on any deal so you can quickly run your buy formula and get to your offer price and after doing thousands of deals over the past 17 years as a full-time wholesaler and flipper i figured out a standardized process for calculating repairs and even created an algorithm that will compute the numbers instantly for you on this video i'm going to share this algorithm with you so that you can understand the numbers but even better is i created an instant deal analyzer tool that does it for you literally in under 60 seconds it's really cool and i'll show you how to get that for free so keep watching in order to use my cost of repairs algorithm you need to know two things and neither of them have to do with home remodeling first is the square footage of the house this is usually really easy to find on zillow redfin or realtor.com the second thing that you need to know is the level of rehab that is needed to flip the property in my experience there are three basic levels of a rehab level one is a light rehab which is basically carpet and paint level two rehab is what i call an average rehab or sometimes i refer to this as a cosmetic flip now includes carpet paint and kitchen and baths that includes new cabinets encounters appliances and for the bathroom a new toilet vanity and tub and surround and the third level of rehab is what i call a heavy rehab and that is a complete gut job and usually includes changing a floor plan maybe new drywall or capital improvements such as a roof windows and siding like i said my experience has been that a rehab usually falls into one of these three levels next let's put some 2021 numbers to this but before i do disclaimer no way is this foolproof labor and material costs vary from market to market and the grade of finishes varies from flipper to flipper and market to market but by and large these numbers are going to get you in the ballpark and keep you safe the reason why i created this updated version is because since the pandemic labor material costs have skyrocketed i mean a two by four went from two dollars to nine dollars so these numbers may fluctuate over time but as of this recording these are the numbers i'm using to estimate repairs so what we're going to do now is factor in light average and heavy based on specific square footage ranges because obviously the bigger the house the more it costs to fix so here they are for homes under 1500 square feet a light carpet and paint rehab cost about 15 000 an average which is carpet paint kitchen bath rehab cost 30 000 and a heavy complete gut rehab costs 60 000. for homes 1500 to 2500 square feet a light carpet paint rehab costs 20 000 an average which is carpet paint kitchen bath rehab costs forty thousand and a heavy complete gut rehab cost eighty thousand for homes twenty five hundred to thirty five hundred square feet a light carpet paint rehab costs thirty thousand an average carpet paint kitchen bath rehab costs 50 000 and a heavy complete gut rehab costs a hundred thousand for homes thirty five hundred to five thousand square feet a light carpet paint rehab costs forty thousand an average carpet paint kitchen bath rehab costs 70 000 and a heavy complete gut rehab cost 125 000 and for homes over 5 500 square feet a light carpet paint rehab costs 50 000 an average carpet paint kitchen bath rehab costs 90 000 and a heavy complete gut rehab costs 150 000 and like i said most rehabs fall in one of these three levels but you may have a deal that falls in between light and average or maybe average and heavy so if that's the case split the difference and you'll be fine so feel free to use that as a reference but let me show you a way to do that that's 10 times faster and better i created an instant deal analyzer tool that already has these built-in formulas all you do is put in the square footage choose if the rehab is light average or heavy and my analyzer tool will automatically calculate the cost of repairs as well as your buy formula now once it does you can adjust the numbers if you'd like and what's cool is you can save your properties so that you can refer back to them later so you don't lose your work and the best part is i'll give this to you for free just leave a comment and say jerry thank you for the updated rehab numbers and the free deal analyzer you are a flipping genius and i'll give you the free download link when it comes to determining your offer price the cost of repairs isn't the only thing you need to figure out you also need to accurately determine the after repair value or the price the home will sell for after the repairs are made so next i want you to watch a video where i explain the most accurate offer formula you'll ever need when going after deals to wholesale and flip so watch that now and if you haven't yet be sure to subscribe to my channel with almost 700 videos this is the number one channel on youtube for all things wholesaling and flipping and i'll see you on the next video

Channel: Flipping Mastery TV

Views: 19,702

Rating: 4.9777603 out of 5

Keywords: How To Calculate The Cost Of Repairs On Any House In 60 Seconds!, jerry norton, wholesaling real estate, real estate wholesaling, flipping houses, house flipping, estimating rehab costs, wholesale houses, how to wholesale houses, fix and flip, how to flip a house, rehab costs real estate, calculate rehab costs, how to estimate rehab costs, real estate for beginners, fix and flip houses for beginners, fix and flip formula, rehabbing houses, how to estimate repairs, flip house

Id: 6DvtWorQTek

Length: 7min 11sec (431 seconds)

Published: Fri Apr 02 2021