Ask the Experts: Rehab Q & A
by Pete Youngs, ?Mr. Rehab?

Q: How can I estimate house damages?

A: That is a tough question to answer, as not all repair costs are equal all over the country. What I do is get the national average cost of the repair and work it from there. At your local large hardware chain store, you can get average prices in national construction cost guidelines manuals. These are similar to car collision repair manuals. If you take a wrecked car in for an estimate, after they look at the damage, they open up a book that tells them how many man-hours and material costs are related to that type of damage, then give you a price. Doing this with home repairs will give you the same results, how many man hours, at what rate per hour, and material costs, leaving you with the total repair estimate.

Also, when getting estimates for your investment properties or your own home you should follow what I tell everyone?Most estimates come with brief descriptions and a total price at the bottom. Keep in mind that almost any repair can be broken down into one of three things. That would be the square foot, the linear foot, or the square yard. Square feet covers things like building living use area, decks, fences, and painting inside and out. Linear feet would include gutters, downspouts, wood trim, baseboards, soffit and fascia, and more. Square yards would be for carpeting and most flooring as well as pouring concrete slabs and driveways. Get your estimates broken down to one of these common units (per foot cost ) and call local suppliers to see if you are being charged more than the average per foot price in your region.

Q: I have zero experience in construction. Should I take a class?

A: Definitely yes. I teach classes all over the U.S. weekly and love getting emails and letters from people who have attended and used the things they learned to save money, as well as how the knowledge has enabled them to be really involved in the process of buying, fixing, and selling properties.

Education in the real estate business is the best thing you can do. This is one of the few times where you can never really know too much. I would also want you to join your local real estate investment club. Right now-today, if not sooner. You will be well rewarded for joining based on the fact that you have more resources there than in any one place at any given time. You have the experience of the people running the club every month, as well as their advice and expertise. Your club may even be run by world-class experts. You have access monthly to hard money lenders, net working, a place to buy, and a place to sell. Last but not least, they bring in people to educate you and provide training classes, seminars, and boot camps to further you in your quest.

Q: What kind of capital do I need before I buy a home to rehab and sell?

A: There are still ways to buy distressed properties as well as others with no money down techniques. You can also buy from wholesalers; people who buy and sell the contracts to other investors. Additionally, most wholesalers are connected to, and/or are themselves, hard money lenders who can put you in a deal supplying the house, with the rehab money included in the purchase, and still have good profits in the resale of your deal. Many people have started out like this. They felt the need not to use their own credit or money for whatever reasons. In my opinion, there really isn?t a set amount to have, but I do know that most people should have enough capital to cover the estimated repairs that you have been quoted, plus about six months holding costs. Holding costs would be any payments, monthly or otherwise, that you have agreed to pay (such as a mortgage payment in some types of deals ). It does not always need to be held that long, but it is a safe cushion on a majority of deals.

Pete Youngs is a nationally renowned speaker, trainer, author, and seminar leader famous for his REHAB 101 system. He is also a successful investor and business owner. To learn more about Pete and his REHAB 101 Tips please visit www.peteyoungs.com.