Expected Air Date: 07/2/18
Have you ever asked yourself the question, “what is this remodeling job going to cost?” When you buy an investment property, especially if you are going to flip it, the repair / remodel number is one of the big three numbers you HAVE to know in order to be sure you’re going to make money on the project. The other two are the ARV and the cost of the money. Where does the purchase price fit in? Because it seems like that’s where you start.
It IS the first number that gets activated in the process, but it’s the last number to be calculated. You back into a purchase or offer price based on the other three numbers. This is true in any kind of property investment. You must have your exit strategy and a strong understanding of what you will get for the property, you must know your rehab or “value add” number. And you should be mindful of you cost of funds.
Today we are going to visit with the guy who can help you nail down that rehab number. His name is Pat Dornan and he is the inventor of the Ultimate Rehab Estimator. Ron was on the program about a year ago when both his software and this show were new. In that time his product has grown, the feature set has expanded remarkably, and he is, in my opinion, on his way to market dominance.
There are other construction estimating programs out there designed for the insurance industry and disaster cleanup crews, but they use bloated and many time unrealistic pricing, which frankly seems like more of a WAG to me. If you want to know what a WAG is, you can look it up or contact us, but this is a kid friendly show, so I’m not telling you on the air. The URE takes you through a property board by board, cabinets, countertops, outlets, everything you would typically do in a property.
The program is linked to the Home Depot catalog for most every item you would ever need. Then Pat and his team add in the labor rates from every state in the US and sales tax information in every location so they can calculate to within a couple of dollars the exact cost of your rehab. It’s an amazingly thorough product and no investor should be without it. Pat will be here in just a few moments.
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- Want a quick analytical tool to tell you how strong a potential fix and flip deal is? Download the Property Grade app. You answer 10 simple questions about the property and the app instantly tells you what you can expect to make, your return on investment, your return on cash, and then the program gives the project a letter grade using the proprietary Flipping America Investment Property Grade algorithm.
Guest: Pat Dornan, Ultimate Rehab Estimator
Comment Line calls and Questions
Call 404-369-1018, press 1 and leave your message!
Emails: Questions@flippingamericaradio.com Tell us where you’re from!
- Warrick, Boulder, CO “Just found your show and am enjoying it. I’m about to do my first flip, buying a house from a wholesaler. He wants me to give him $7500 as a non-refundable deposit. He also said there is no due diligence on the deal. I have to close in 14 days. I didn’t want to ask him, but what is due diligence? And is this a bad thing?”
- Larry, London, KY, “I’m interested in owning rental properties in this area. I have a few, but I’m not sure I bought them right. What kind of price would you suggest? The market here is probably not as strong as some of the places you mention on your show.”
- Sheila, Jacksonville, FL “I’m 63 about to retire a bit early. I have enough in my accounts that I know I can live the rest of my days if I can make just a consistent 6% return on my investment. I don’t really trust the stock market and I do like real estate. But I don’t want to own or manage any properties. I just want 6%. Did I hear you say you have a private lending program that would make something like this?”
Motivational Thoughts for the day
- Keep your eyes on the stars and your feet on the ground. -Theodore Roosevelt