Ask Nick: How does the rehab cost add up?

Hey Nick,

I'm immersing myself in real estate knowledge and thank God for the internet and you tube, there's a whole wealth of information out there that can be good for newbies like me.

Lately, I've been focusing my attention on rehabs. I figured that if one understood rehabs, one would understand real estate investing a whole lot better and even wholesaling.

My question is: How does the rehab cost add up?

When investors quote a rehab cost or estimate cost, say, $40,000, does this include materials plus the contractor's fee and labor, or is the labor priced differently?

As always, looking forward to your response…

Thanks and Happy Holidays!

Hi There,

You asked a very involved question... contractors will quote whatever work you tell them to. And if you're not clear, you'll never get accurate bids on anything.

Some will quote you labor only, some both materials & labor, some will underbid you only to give you what's called a "change order" later on, upping the real price, some do good work, others don't.

When I walk through a job, you have to be as detailed as you can, when drawing up your OWN scope of work. I go as detailed as labeling what SKU numbers from Home Depot or Lowes I want, with doors, chandeliers, counters, etc.

That way, when you provide YOUR scope to one or three contractors, you get ACCURATE bids.

Make sure they realize it includes both materials & labor. My coaching students walk through jobs and do this on a daily basis, as it does take practice.

Hope this helps!

~ Nick

Ask Nick - "When does a homeowner legally lose their foreclosed home?"

Hi Nick,

While wholesaling, I constantly encounter homes vacated by the Home Owners. I keep coming across notices from a company called American Field Services reading, "The property has been secured/winterized"… "Do not turn on utilities”...”heating tank has been drained"....

I understand the homeowner still has time before a foreclosure date is actually set, however, at what point does the homeowner legally loose the right to his/her house? Is it when he/she decides to walk out of the home and the lender sends in these American Field Services type of companies to secure the property?

OR Do homeowners lose their home when the legal process of foreclosure is ventually done?

These issues / questions have been weighing heavy on my mind...

Looking forward to hear your response,

Thanks!

Hi there,

Thanks for the question! The homeowner loses all rights to the property once the auction date has come, and the auction is completed. That's when it officially goes either to an investor, or more commonly, back to the bank (they are also present at the auction to protect their interests).

The name on the door you are seeing is the asset manager, the company hired by the bank to maintain it while it is on their books.

Hope this helps...

Nick