Jan 9, 20262 min readRenovation
How to estimate rehab costs quickly (and where investors get burned)
A practical rehab estimating approach you can use in minutes—plus the most common places budgets and timelines blow up.
RehabRenovationBRRRRUnderwriting
Rehab estimating is where a lot of “great deals” die.
You don’t need perfect numbers on day one—but you do need a defensible range and a way to avoid the obvious traps.
Use the tools:
The goal: a fast, conservative range
Early in a deal, your output should look like:
- Baseline estimate (what you expect)
- Conservative estimate (what it could be if things go wrong)
- Timeline estimate (months, not weeks)
If your deal only works in the baseline case, it’s not a deal.
A fast estimating method (15 minutes)
- Start with “big buckets”
- Kitchen
- Bathrooms
- Flooring
- Paint + drywall
- Roof / HVAC / major systems
- Exterior / landscaping
- Use unit costs (rough)
Examples (varies heavily by market and finish level):
- Paint + patch: $2–$4 / sq ft
- LVP flooring installed: $3–$6 / sq ft
- Mid-level bathroom: $8k–$15k
- Mid-level kitchen: $15k–$35k
- Add contingency
- Light cosmetic: 10–15%
- Moderate: 15–20%
- Heavy / unknown systems: 20–30%
- Add timeline risk
Holding costs (interest, utilities, insurance, taxes) matter. A “cheap” rehab that takes 2 extra months isn’t cheap.
Where investors get burned (the top 5)
- Systems you can’t see (plumbing, electrical, foundation)
- Permits and rework (especially kitchens/baths)
- Scope creep (every “while we’re at it…”)
- Material lead times (cabinets, windows, HVAC)
- Underestimating labor (good crews cost more than you want)
Tie rehab to offer math
The cleanest BRRRR underwriting flow is:
- Estimate ARV from comps: ARV Calculator
- Estimate rehab as a range
- Run BRRRR refi math + cash left in the deal: BRRRR Calculator
Then stress test:
- ARV -5% / -10%
- rehab +10% / +20%
- refi LTV down a notch (e.g., 75% → 70%)
Quick rehab checklist for diligence
- Roof age + visible issues
- HVAC type/age
- Panel type + wiring condition
- Visible plumbing issues
- Foundation cracks or water intrusion
- Windows/doors condition
- Evidence of mold or pest damage
If photos are available, you can do a first-pass scope quickly and refine later with contractor walkthroughs.