Top Tools for Estimating Rehab Costs for Your Next BRRRR

 

Introduction

The 2019 National Building Cost Manual is a particularly useful tool for buy-rehab-rent-refinance-repeat (BRRRR) investors. It lists area modification factors for every city in the United States. These area modification factors can come in handy while estimating repairs. So, for instance, Boston, Massachusetts has an area modification factor of 37%. Santa Fe, New Mexico, on the other hand, has an area modification factor of -8%. Simply put, construction repairs that would typically cost $92 in Sante Fe will cost $137 in Boston!

With such a wide variance in construction costs, it is critical for a BRRRR investor to get an accurate repair estimate. Incorrect cost estimates can lead to incorrect financial decisions, and possibly, huge losses.

Many novice investors make the mistake of calculating repair estimates based on square footage.  That is a mistake. Any experienced investor will tell you that repair estimates will vary immensely on a case-to-case basis. An accurate estimate is not really possible without breaking down the total cost of rehab into individual components.

How can a new investor with no prior construction or cost estimation knowledge accurately compute rehab costs on a deal that they are evaluating?

In this blog, we list some useful rehab calculation tools that BRRRR investors can use to estimate costs for their projects.

So, let’s take it from the top.

*A note: We are not affiliated with any of the below companies, we just want to best serve you in your investing.  We make no specific claim with respect to the accuracy of any information that any of the following tools or organizations generate.  

House Construction Rehab

 

Bigger Pockets Rehab Estimator Calculator

If you are looking for a basic calculator with a clean, easy-to-use interface, the Bigger Pockets Rehab Estimator Calculator is a good option. As a free BiggerPockets member, you can use this rehab calculator a maximum of 5 times. If you want unlimited access, you will have to upgrade to their membership fee.

How to use the Bigger Pockets Rehab Estimator Calculator

  • To get started, first go here.
  • Next, click on “Generate New Report”.
  • Once you do so, you will come to the estimator.  It is divided into three sections: Interior Expenses, Exterior Expenses, and Results.
  • You can input your costs as “Unit Calculation”, “Total Only”, or as “Labor and Materials”.
  • The expenses are split up into numerous sub-categories. You can add custom expense heads, if required.
  • Once you have added in all your expenses, click on “View Results”.
  • You can even take inputs from other BiggerPockets members by discussing your report in the forums.

While we loved this calculator for its ease-of-use, we were disappointed with the lack of real-time cost data. If you are looking for a rehab calculator with in-built, state-wise cost information, scroll down and check out our option #2, Flipper Force.

 

Flipper Force

Flipper Force is an excellent rehab tool for those looking for a more comprehensive solution. Flipper Force started out as an excel spreadsheet and then evolved into a full-fledged, web-based software platform. In fact, you can still access their excel spreadsheets here.

However, we recommend you try out their web-based platform.

This is how you can use Flipper Force for estimating rehab costs:

  • Sign up for their free trial here.
  • Load their rehab starter template.
  • Input your estimate data. Costs will be automatically populated based on the national averages. This can be a good starting point, and you can customize costs if required.
  • You can even add in Scope of Work (SOW) notes to each cost category. Using a Scope of Work, you can easily convey your requirements to the contractor.
  • You can even save your estimate as a template – which can be used on future projects.

Much more than a simple rehab calculator, Flipper Force is a full-fledged project management solution. We loved the fact that this tool has an integration with Zillow that allows you to auto-populate property data.

Apart from estimating costs, you can also build project schedules, analyze deals, track tasks, and expenses, and manage budgets. Pricing ranges from a one-time fee of $127 to $257.

 

Home Depot Rehab Calculator

In an earlier post, we had revealed how you can use the Home Depot Project Loan Program to finance your rehab purchases. Well, additionally, Home Depot also has a useful rehab calculator to help facilitate your next BRRRR.

This rehab calculator can be useful for estimating costs for:

  • Tiles
  • Countertops
  • Mulch
  • Moving (Storage Boxes)

Check out this snapshot:

Home Depot Rehab Calculator

 

BlueHammer

Bluehammer estimate is a great starting point for negotiating prices with contractors. This is a free resource that is used extensively by insurance companies as well. Bluehammer computes an estimate by pulling data from an extensive area-specific, cost database.

This is how you generate a Bluehammer estimate:

  • Click on “Estimate New Project Costs”, and assign an appropriate name to your project.
  • Next, you can “Search by Popular Projects” or “Search by Individual Actions”. If you are a new BRRRR investor, we recommend using the first option.
  • Now, it is time to feed in your repairs information. In order to do so, you will have to assign an appropriate “Category”, “Sub-category”, “Project”, “Quality of Material”, and “Areas where you are planning to perform repairs”.
  • Once you do this, you are good to go. Bluehammer will generate an estimate, complete with very detailed line-item costs.
  • You can download your Bluehammer estimate as a PDF or even share a link with your contractors.

Propstream

If you are looking for an integrated, end-to-end solution, Propstream is another great option for you. Apart from estimating rehab costs, using Propstream, you can also:

  • Run Comps
  • Access MLS Database
  • Look at property tax information
  • Find and assess distressed properties
  • Find Owner Information

This software is priced at $99/month.

Work with a Contractor

If your BRRRR property requires a simple remodel, you can very well use one of the above listed options to compute a rehab estimate. However, if your investment is a deep value-add or “full-rehab” property, you might have to go for a complex remodel that requires preparing detailed designs and hiring multiple subcontractors.

In this scenario, it is a good idea to work with a contractor who can teach you the nuances of rehab estimation.

We strongly recommend paying a contractor to walk a few properties with you so that you can understand how costs vary by project and by location. An experienced contractor can rely on their experience and historical data to accurately assess rehab costs. Walking with a contractor will teach you how to break down a rehab into different functions (HVAC, plumbing, flooring etc.). Doing so will help you prepare a detailed and more accurate cost estimate. 

So walk a few properties with the contractor. Understand how costs vary in different situations. Take notes. And apply this knowledge to your own BRRRR project. This will come in handy when you do your estimates of rehab costs for evaluating offers on your next BRRRR.

Conclusion

We hoped this guide helped you gain a good understanding of the different options that you, as a BRRRR investor, have at your disposal. Watch this space for more updates!

Don´t forget about your free trial of our BRRRR solution for a limited time – analyze deals, make offers and contract securely with your property managers, contractors and tenants using our fill-in-the-blank contract templates prepared by professional attorneys and investors. Get access to our Deal Analysis and Legal Solution and do more BRRRR deals than ever before!  Learn more.

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