Understanding the Repair Estimates on a House
This week John, founder of Systems Saturday, revisits a confusing but very important subject for real estate investors; the repair estimate. A lot of people will just walk through a house and guess at what it would cost to fix it. In the end, you will pay more for repairs than you had originally budgeted. John’s systems for repair estimates helps to make a more accurate estimate.
0:04I did everything myself in here, that is not how we do 0:07the business and there right there is a house that I have already flipped 0:11as well and we already know that I can flip this house to a bar on my buyers list 0:15i got a strong buyers list in this area 0:21hey guys! this is john cochran and today it is Saturday and we are in the beautiful 0:27city Fairborn Ohio right now and what I wanna do on today's 0:31systems Saturday I wanna go through and I wanna show you how in the world 0:34if your gonna go ahead and buy a property 0:36how to know what the repairs are on the property because 0:40a lot of people in a lot of things that I used to do and i used to just guess 0:43okay so I used to go ahead and just guess what the repairs were and walkthrough a home 0:47it needs about ten thousand dollars well quickly did I find out that that 10,000 0:51whenever I either 0:52start a rehab unit or so let somebody else quickly turn into maybe twenty 0:57twenty five thousand dollars it was just my air so what I ended up doing guys 1:01like created this sheet 1:02okay so I ended up creating the sheet and what I'm gonna is I'm gonna show you 1:06how the world to go ahead and build the sheet out 1:08so that you know exactly what you repairs are going to be 1:11into each home that your foot been 1:14or as a realtor it just doesn't really matter so let's go ahead and go inside I'm gonna go 1:19shoot through and I'm going to show you 1:21the sheet on what we do whenever we know whenever we're buying a property so that we know 1:26how much repairs are on that house. let's go! 1:32hey guys. what's up? so guys here we are inside this home and what i want to do 1:37i really want to break down this form 1:39I wanna break down this form for you right now and 1:42you know normally we have a clipboard with us or whatnot but I want to really 1:45break down this form so 1:46if you really look at this it's a form that we have very very standard and you 1:51just go through just check yes or no on all this stuff 1:54does the home need a roof, yes or no, check that, yes or no, if it does not need a 1:58roof 1:59check no, if it does need a roof then you say 2:02it tells you what it's going to go ahead and cost, okay 2:05so single or single home or what not 2:08single family up fifteen hundred square foot so you roof is gonna roughly cost 2:12you 2:13about five thousand dollars on that one layer shingles that they can go ahead 2:16and go over top of it 2:18it will be anywhere between 2500 and 3000 dollar 2:21then you put that repair estimate over there, you go through the entire home guys 2:25so you go through the entire home does it need exterior paint or citing 2:29yes it needs exterior paint and citing then you go through and it gives you the 2:33description and breakdown of it 2:35okay that needs painted a single family home that's about fifteen hundred square 2:38foot 2:39is going to be about three thousand dollars in order to go ahead and 2:42paint 2:43the multi-unit I you know couple units on it or what not maybe a four plex 2:47something like that he is going to cost anywhere between six to seven thousand 2:50dollars siding on it 2:52we're going to be single-family 1500 a square foot home 2:56would be about seven thousand dollars go ahead and do it so if it does need 3:00be at the siding or what not you know say it need siding the home to about 3:04fifteen hundred square foot 3:05you simply go ahead and put seven thousand over here 3:08the whole goal this as you go through the entire home like we're getting ready 3:11to go through 3:12he check yes or no on all this stuff and then what you want to go ahead and do is 3:16put the repair as my honor 3:17and then you total up the repair and that's how you do it so just looking through this home 3:21it definitely needs new carpet and definitely needs painting 3:24the first thing that i'm gonna go through is the first I actually do the stuff in order 3:28so i do this from water and of the sheet 3:31I looked at the roof I do not need a roof and my eyes I went ahead and I checked 3:36no on that 3:37exterior painting citing I personally would go inside his home 3:41so seven thousand dollars on that does it need Windows okay so 3:45does it need windows so this particular home this is not vinyl windows or anything like that so the 3:49windows 3:50are older, now keep in mind but you have to stay within your comparables 3:54okay so in my eyes yes I'll go ahead and put Windows in this 3:58but I'm looking at all these other home and they really have about the same 4:02kind of windows in here 4:03so im gonna actually say right here that this does need Windows 4:07and it tell me right here the little chichi all I Got to do is count the windows up in 4:10the home 4:11then it tells me that it's, two hundred dollars a window 4:15I'm not gonna do it right here just for the sake of this video but just say that 4:18there's ten windows in this home 4:20two thousand dollars. i have already done my repair on here 4:23does the garage need repairs and then I go out the garage and look at that see if it needs repair 4:28if it needs a garage door it would be $550 and it tells me what it needs 4:32and actually does not mean anything in this 4:34in this case, yard need clean up or landscape, right now 4:38you know I'm gonna go ahead and say no because you really can't do it on ohio and 4:42um you know this time in year, so I'm gonna go ahead and say no it does not need 4:46 4:46landscape, so nothing on that, what we are 4:50for central air so as I just go through and i just 4:53look at all this,. I know that the whole home needs painting so the entire house needs painting, 4:57right? so 4:58i'm awfully, all good through down to that, I'll check the yes 5:02right there interior, you need to know a couple things whenever your filling up 5:06this form, you need to know 5:08the square foot in this home. this home has happened to be right around a thousand 5:11square foot 5:12 right here and it's gone on the floor, it's awesome is it 5:16try it some? i'm just asking. i'm just asking. so here 5:21a lot 5:24so into your painting, it's about a thousand-square-foot 5:28you know this is going to be anywhere between a dollar fifty to two dollars a 5:32square foot so you're looking right around 5:34you know about two thousand dollars and you go ahead and get this thing, painted so you 5:38write 5:382000 dollar in there, but right here inside the kitchen, we got a kitchen right here 5:43are you gonna go ahead and put a plans because we personally do in every single one of the homes 5:47that we do 5:47now when we sell this home to retail we will go through and always put appliances 5:52and there so yes we're gonna do that, and tell exactly what the stove 5:56a microwave, refrigerator and a dishwasher. we do have a dishwasher right here 6:00as well 6:01and so i'm gonna go ahead and total all that stuff up 6:05you know, i'll put that right over here, ok, kitchen, you know what needs repair 6:09so my question to you, do you think this kitchen needs repair, i mean because 6:13this is some pretty high quality stuff 6:16this is a pretty high quality stuff right here you guys so 6:19i mean you got a gourmet stove right here that's, you know its 6:23you know just straight of a low showroom floor, you know just straight o 6:27showroom floor so 6:29you got painted cabinets right here, guys i'm getting rid of this entire kitchen 6:33I'm getting rid of the entire thing, so i go write here to the sheet 6:36and it says kitchen needs repair, 6:39absolutely it needs repair, so to do this 6:42for a rental, it would be $1500, do it nice, it'd be twenty five hundred bucks, i'm gonna 6:46go and write 2500 bucks right there 6:49so keep walking through here 6:52you know obviously, i see 6:55this is the laundry area whatnot, you know any repairs 6:59it need to be done on this. so, i need to look at the electricals 7:03was almost certainly is downstairs, so you go to the sheet 7:06anything on electric wire it need repairs fifteen hundred dollars for new 7:11the whole moral this guys is is on I'm gonna just stop to the sheet right here 7:16the whole more as you walk through the entire home and you go through and check 7:20yes or no 7:21on this and it tells you what the cost is as you go through and you put it on the 7:24repairs are right here and you told them that whats your repairs are so 7:27let's go through and look at this house, and see what you guys think, get your feedback on this 7:31and see if you think this is a good buy or not 7:36and one of the bedroom right here, amazing, 7:39my question to you is this, can you tell where the bed was 7:43can you tell where the bed was 7:47i can't so it's amazing the way people live and 7:51but it is what it is I mean this is a hud home, you know we will go ahead and 7:54purchase, and it is what it is, here is one of the bedrooms 7:58right here, you have the wardrobe down there 8:02so what's in here, this is my first time in this house actually 8:06so you got the closet right there whatnot 8:09and yes we'll go all the way up here 8:14sticky yicky icky, okay so we'll go over here 8:19and looks like somebody tried to paint something over there 8:23and then you got another bedroom right here so I guess its a two-bedroom home 8:27overnight carpet this one oh yeah 8:30you know the painter made up to the top,this is actually one of the nice 8:33in the entire home, and you got the closet right here as well 8:37so you got the closet right here as well, this one seem actually not very bad 8:42and look back here it looks like they put something over 8:46which is fine it doesn't bother me one bit 8:50I it's actually three-bedroom home so its a three bedroom home so 8:54you go over here and here is the third bedroom 8:57so its kinda small no base, molding or anything like that 9:01it doesn't have a basic forms i'd definitely go through and put in here the 9:05that it needs 9:06I'm always on the bottom so one thing i would be doing to 9:09I would go through Count all this window as i go through and fill in this 9:13suck that out, home that definitely needs painting right here 9:17and I actually hell a lot more right there, and then you got right here, you got the 9:22bathroom. which hud does on all of their properties, they tag all this stuff 9:25properties get win or rise, that's why they go through and put tape on the toilet 9:30they go ahead and put this tags on the 9:33sinks, they got this orange stickers everywhere saying that's been 9:38you know, they just make sure their butt is covered i guess if you go ahead 9:41and say 9:42on all this stuff so, bathroom is not bad, but you know what 9:45Id personally would go ahead if i was gonna go ahead and retail this property, i would go ahead 9:51and put that it does need repairs in and that would cost $1500 9:55for the sheet, so the prices guys are pretty standard across the entire 10:00country 10:01so it's pretty standard across the entire country unless you are like 10:04in an area like Hawaii or anything like that where if you just go out to eat 10:08its gonna go ahead and cost you about a hundred and fifty thousand dollars so 10:11and ask me how I know 'cause i have been to hawaii many times so 10:15guys I just wanted to really go ahead and get this video out to you 10:18you do have access to this sheet I am putting this sheet 10:22below the video so you can go ahead and have this, so whenever you are going through a home 10:27you can just quickly fill this out, total up right here 10:30so that you can either go ahead and give this to your other investors that you are selling homes to 10:34or so that you will know 10:35which repairs, 'cause i got so sick and tired of going through and 10:39and thinking a home would be, you know maybe fifteen thousand dollar something 10:43like that repairs and ended up being 10:45thirty thousand because that can kill a deal, that can kill a deal and 10:48if you want to know how in the world i didn't make any money in real estate when i first started 10:52this stuff for the first 7 years, it's because i didn't have a system like this 10:55so it's yours go ahead and take it, and I i hope the go ahead and use it 11:00because 11:00it rock. so guys use it. find out what the repairs are 11:04i'll see you on the next one, see you guys!