The repair figure on a listing is the wholesaler's estimate, usually a range, often made from a short walk or from photos. Of all the numbers on a deal it is the one most often wrong, and a miss comes straight out of your profit.
Why it is a range
The same house can be a light refresh or a full renovation, depending on what is behind the walls and how you finish it. A listing here shows the range, and the spread and the calculator start from its middle. Plan to the finish buyers expect in that neighborhood, not more.
The five that cost the most
- Roof. Its age, missing or curling shingles, and stains on the ceilings below.
- Foundation. Wide or growing cracks, doors that stick, floors that slope.
- Heating and cooling. The age on the unit's label. An older system may be close to replacement.
- Plumbing and the sewer line. Old galvanized or cast-iron pipe, slow drains, water stains. A camera inspection of the sewer line is a common check on older houses.
- Electrical. The panel's age and size, and old wiring such as ungrounded outlets or knob-and-tube.
Water damage and mold sit behind several of these. A musty smell, fresh paint on one patch of ceiling, or new flooring in a basement are worth a closer look.
On the walkthrough
- Sign up for a showing the wholesaler holds, or ask for one on the listing with the times that suit you and the wholesaler confirms a time.
- Bring a contractor or an inspector if you can. A second opinion before you offer costs far less than a surprise after you close.
- Photograph every room, the electrical panel, the water heater and the labels on the heating and cooling units.
- Look under the sinks, in the attic, and in any crawlspace or basement, with a flashlight.
- Ask what the wholesaler knows: the roof's age, past leaks, open permits.
Hold some back
Old houses hide things. Many investors add 10 to 20% to their repair budget for surprises, more on an older house or a bigger job. Count the time too: every month of work is another month of taxes, insurance, utilities and interest, which is what the calculator's closing and holding share is for.
Put your own figure in
Once you have your own estimate, put it in the calculator below in place of the seller's. If a deal only works at the low end of their range, treat that as a warning.
This guide is general education. A licensed inspector or contractor can tell you what a particular house needs.