running the numbers

Jerry,

For me it was a process of getting out and looking at multiple properties. On the first few I brought contractors with me to get bids. I met other rehabbers and looked at their properties, how they were finished and how much it cost. Looked at solds in the area and how they were remodeled. Meeting, networking and most of all, looking at properties with the intent to make an offer. REOs were the best source of research properties for me. They are plentiful!

I also learned that every investor has his/her idea of how to rehab a house. So when making my rehab/remodel estimates on properties I intend to wholesale I do not have a down to the drywall screw estimate. I give an accurate rehab number that I know would fix up the property to bring the ARV I have determined.

That is the other part of the "numbers" An accurate ARV. What a house will ACTUALLY SELL for with the rehab/remodel you have determined. Sold comps, under contract comps and currently listed comps that are ACTUAL comps to your subject property that has been fixed up. You have to learn what a real comp is. Agents will supply you with comps that are not really comps. They will go out 1/4 mile and then a 1/2 mile, pulling whatever they see that has close to the same Sq. Ft. and bed rooms etc. Comps can and DO change street to street and block to block. You MUST know the neighborhood. Usually you will not learn this sitting at home looking at a computer.

Now, when I am doing the fix/flip myself I know the costs down to the drywall screw.

Once again, for me I had to get out and look at properties, learn how to determine what level of rehab is needed, what the rehab would cost and what the place would sell for at that particular location after rehab.

Hope this helps,

Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC