Here’s the big misconception…
Most investors think that they need a licensed contractor to accurately estimate your renovation costs and bid out every job for them. The reality is, that’s so far from the truth! We have used this Deal Estimator Tool to buy and sell over 400 properties in one calendar year. By systematizing your business and approaching it from a sort of “McDonald’s” approach, you can drastically increase the amount of business you’re doing and become more profitable while you’re at it. In this article, I’ll show you why the Deal Estimator Tool is the one must-have tool for all real estate investors who wholesale and renovate properties.
In order to give yourself the greatest profit potential on a rehab property, you need to be able to accurately and thoroughly estimate the repairs involved. It’s more complicated that just walking around the house with a blank sheet of paper and taking notes. You need to be examining every aspect of the property, top to bottom, and determine what needs to be done. From there you can estimate the costs for materials and labor. That information will help you calculate your budget, selling price and profit margin. Without a contractor.
To make it easier for you to set your rehab budget, use the Deal Estimator Tool, a free download that you can get by CLICKING HERE. This is a comprehensive tool where you enter any information you know about the house based on your inspection to determine your costs and margins. The Estimator has all the formulas you will need already built in, so it does all the work for you.
How To Use The Deal Estimator Tool
When you first open the Repair Estimator Plus, you will notice there are a lot of individual worksheets in the workbook (as indicated by the tabs across the bottom of the page in Excel). Let’s look at each page. Download it now by CLICKING HERE, and follow along on your own copy.
Profit Analyzer For Flips
On this worksheet you will enter all the preliminary information you have about the property, including:
- Address and description of the property
- Property values and pricing – ARV, as-is value, purchase price, estimated hold time
- Holding costs – Property taxes, HOA fees, insurance, utilities, miscellaneous other costs
- Financing costs – Mortgage and lien information
- Buying transaction costs – Escrow, attorney and title fees
- Selling transaction costs – Escrow, attorney and title fees, commissions, marketing, etc.
Sample image of the Profit Analyzer page
This is your foundational page, and also the place where some final calculations will be done after you provide information on subsequent worksheets. Once completed, the Estimator will generate a couple of critical pieces of information – your Estimated Net Profit and your Total Return on Investment.
This is another summary worksheet containing valuable information about the property overall. It is a one-pager that includes the property and loan information, source, and use of funds. On this page, you will also input information about property comparables. It is a locked sheet, so you just need to enter a few pieces of information, everything else will pull from elsewhere in the workbook:
- Executive summary
- Closing date
- Exist strategy
Sample image of the Investment Summary page
Here you enter the basic information about the house, like square footage, number of beds/baths, façade material, garage size/type, basement, number of floors, roof size, flooring waste factor, total estimated cost, and cost per square foot.
Sample image of the Property Info page
This worksheet is going to summarize the repair costs that you’ll enter on subsequent pages in the workbook (room-specific information).
Sample of the Estimate page
This is an incredibly useful page because it gives you specific costs for each item you will need to repair or replace. It provides both material and labor costs, even factoring in Workman’s Comp and Insurance. This will help in the calculation of overall repairs. It covers everything from Kitchens, Exteriors, Flooring, HVAC, Plumbing, Bathrooms, Doors, Hardware, Painting, and more.
Sample of the Unit Costs page
Room Specific Worksheets
The remaining sheets are your checklists – your punch lists. As you go from room to room inspecting and preparing your repair list, follow along with the corresponding sheet to prepare an accurate repair total. In each room, make note of any repairs that need to be done in that space, indicating whether that repair is required or not (a Yes/No field). The total expense will then calculate based on the numbers in the Unit Cost worksheet.
Sample of one of the room specific pages
The process is the same for each of the remaining worksheets for each room of the house and the exterior:
- Dining Room
- Breakfast Room
- Laundry Room
- Family Room
- Formal Living Room
By using the Repair Deal Estimator, you’ll be able to accurately calculate your net profits and anticipated ROI on any rehab deal, and know instantly whether this is going to be a profitable one or not. Take the time to go through the Estimator before you use it for the first time in the field so you are comfortable maneuvering and entering information. Once you start using it, you’ll never do a rehab without it. And by the way, this is exactly how the big hedge funds buy and renovate so many properties without ever even seeing them.
Are you ready to have this tool to precisely estimate your property renovation costs and analyze the deal to determine whether it’s a winner? Add the Deal Estimator Tool to your investing business by downloading it for free by CLICKING HERE.