Welcome to the third post in our “Featured Tool of the Month” series on our
Hammerpoint Home Repair Estimator and Rehab Planner tools! Follow us, as we
break down our software, pixel by pixel.
In last week’s post, we covered the Hammerpoint Rehab Planner, a tool that allows you to create a complete rehab plan for your property that factors in all labor and material costs. We've even pre-loaded hundreds of Home Depot product SKUs to choose from when creating your plan.
This week’s post focuses on what to look for when evaluating a property to estimate repairs and includes a free downloadable template that can be used as your guide and will calculate repair costs for you.
We basically took our Hammerpoint Home Repair Estimator and put it into a spreadsheet that you can download and use as your guide when doing repair estimates. We've even put the formulas in so it calculates the cost based on national averages. This information can be edited once you download your copy to better fit your local costs and business needs.
Our goal is to help you become a better investor by delivering information that will help you invest smarter and do deals faster.
WHY DO A REPAIR ESTIMATE?
A detailed repair estimate will give you a clear picture as to whether or not a property is worth investing in. While it’s easy to get distracted by an appealing sales price, a thorough repair estimate will reveal any additional and necessary investments, some of which may be extremely costly.
Completing the repair estimate will help you determine the appropriate purchase price, after repair value, and necessary sales price to be able to make a profit.
What you don’t want is to be fooled by a low price tag. The price might be right, but the property might be all wrong. Check out my post on how to identify a money pit in 5 minutes or less.
When you create a repair estimate, what do you use as your guide?
Do you simply go the house with a blank piece of paper or your computer or tablet and take notes?
Do you use a software program to guide you?
Or do you rely on a contractor’s expertise to get the job done?
You can download my list of everything that I look at when creating a repair estimate, along with the average cost associated with each item. Cost can be adjusted based on your local area.
Check out the list below of items that I always assess when conducting a repair estimate on a property and what I look for.
Look for obvious signs of wear and tear – missing shingles, discoloration, waves or dips in the line of the roof.
Look for obvious signs of wear and tear such as missing or sagging sections, cracks, and missing downspouts.
Examine the exterior for obvious signs of damage such as large cracks, peeling or chipped paint, or missing boards.
Look for broken panes, and damaged sashes or window frames.
Look at the condition of the roof, windows, garage door, garage door opener, and electrical for damage or excessive wear and tear.
Get an overall feel for the condition of the landscaping and determine if you need to replace the existing landscaping or do a clean up and add to what’s there.
Determine the condition by looking for rotting wood, termite damage, and missing boards. Next decide if you can repair what’s there, if you have to replace the whole thing, or if it’s good enough shape to leave it as-is.
Look for missing boards, chipping paint, rotting wood, and the condition of the door. Then decide if the existing fence can be repaired, left as-is, or if the whole thing needs to be replaced.
Look at the condition of the walls. Some properties will require fresh paint throughout, but there may be some that you can get away with painting just certain rooms.
Inspect the flooring to determine the overall condition. Look for missing or warped boards and excessive wear and tear. Next determine if it can be sanded and refinished or if the flooring needs to be completely replaced.
Look for stains, excessive wear and tear, or missing areas of carpet to determine if carpet needs to be replaced or if a professional cleaning will be enough.
Look at the condition of the cabinets and countertops to determine if you can refinish what’s already there or if it needs to be completely replaced.
Inspect the appliances, both how they look and how they work, to determine if you need to replace them, refurbish them, or keep them in their current condition.
Inspect the toilet, bathtub, vanity, sink, and mirror to determine what can be reused, refurbished, or needs to be replaced.
DOORS AND TRIM
Look at the existing trim around all the doors, windows, and baseboards and determine if what’s there can be cleaned up and painted or if it needs to be replaced. And don’t forget the doors! Determine the condition of all the doors and whether or not they need to be replaced.
If you think you have an issue with the foundation, you will want to get a second opinion from a foundation specialist like a structural engineer. First determine the type of foundation the house has (slab, raised, full basement) and what it’s made of (concrete, wood and concrete, block). Look for obvious signs of deterioration like cracks, separation, or flaking around the exterior. Inside, check the floor to confirm that it’s level. An easy test is to drop a marble in the middle of the floor and if it rolls to an edge, you may have a problem. Another thing to look for are doors that don’t stay open or closed. That could also indicate foundation issues.
First determine the type of system the house has (gas forced air is very common) and the working condition of the system. Then determine if the system needs to be replaced, repaired, or is in good working condition.
Inspect the hot water heater’s working condition and age to determine if it needs to be replaced, repaired, or is in good working condition. If the house is going to be a complete rehab, you will probably be doing a lot of plumbing work, so it’s important to budget for this separate from the fixtures.
Determine if the electrical need to be repaired, replaced, or is it in good working order. First, locate the main panel box and look at where the wires come in and the condition of what you see. Char marks on the electrical box indicate a fire hazard and two prong outlets indicate the need to update wiring. Determine the type of electrical – breakers or fuses. If you find fuses, expect to rewire the entire house and update to breakers.
Check the basement for water damage, dampness, mold, or mildew. This could be an easy fix such as mold remediation or could indicate a much bigger, most costly problem. If you see evidence of water damage, you will probably want to do some additional investigation into the problem.
Your home repair estimate...
Helps you determine the work that the property needs
Helps you determine purchase price and potential sales price based on necessary repairs
Helps support and validate your offer
Aids in lender and seller negotiations
Now that you know what to look for and have a guide for creating your home repair estimates, doing one should never be overlooked. It's a crucial element for negotiating the best deal every time.
2 Final Tips:
- If, for any reason, you can’t test the appliances or systems such as HVAC, assume they need to be replaced.
- Always overestimate rather than underestimate to give yourself a little wiggle room.
Want to share any of your home repair estimate tips? I would love to hear them, so please leave a comment below!