Video Transcription
Raul: What’s up guys? You’re all here. You’re a real estate buyer. You’re a real estate investor. So I want to talk to you a little bit about some repairs. How to calculate repairs. One of the guys in the office, he was saying that a lot of our buyers are asking like, “Hey, how do I get it? How should I get it?” And I think that’s a pretty common question. And I like to say this a lot, but my short answer is, there’s a very short formula that we use. And my long answer is, it’s a science. So, here’s our short formula we use. Five dollars a square foot for minimal repairs, minimal to zero repairs. So if someone tells you, “Oh, the property needs no repairs.” Or it’s in really good shape, $5 a square foot, thousand square feet, five grand.
Ten dollars a square foot for medium repairs, so, “Oh, it’s outdated.” Or, “I got to redo the kitchen.” “I got to redo the bathroom.” Or whatever. Ten dollars a square foot, thousand square foot house, 10 grand.
And, anywhere from 15 to $20 a square foot on maximum repairs, so if the house needs a roof, it needs floors, it needs everything. When they tell you the house needs everything, the house is a mess. Then you use like 15 to 20, depending on how messy it really is.
That works really well, like quickly if you’re doing a quick analysis. I know it’s not to the tee, but plus or minus five or 10%, man, give me a chance here.
So, another way to really just do it is you just got to get somebody out there. Or if you know about it, then you got to go out there. But there’s no other really concrete way to know exactly what a house is going to cost. It’s good to just do an estimate and be a little conservative. If in your 5, 10, 15, you’re estimating 10 grand, man you put 12 or 14 or 15 to be conservative. And that’s the best way. And just buy some more houses, man. Buy some more houses. All right, guys, take care. I hope you guys like the video and we’ll be in touch. Subscribe or click the link somewhere. Thank you guys.