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How to Calculate Rehab Costs

Coach Dave,

Do you have a costing model for rehabs?
I’m learning a lot from your emails…much
more than the seminars I attended.

Thank you,

Great question Edwin, and thanks for the
kind words!

I get this one a lot, and it annoys me that
so many of the so-called “gurus” never
answer it directly.

Instead they give the “well it depends”
answer, which doesn’t help anyone.

At Capital Rehab Group, we use a very
simple formula for calculating the cost
of a rehab:

Sq Ft of House x $25 = Cost of Rehab

For example, if you are going to rehab
a 1200 sq ft house, your estimated rehab
costs would be:

1200 sq ft x $25 = $30,000

As another example, if you are rehabbing
a 2200 sq ft house, you can estimate
the cost to be:

2200 sq ft x $25 = $55,000

This is a very simple formula, and it is
excellent for quickly estimating rehab
costs when looking at properties.

Let’s be honest: when you are looking
for a house to flip, it is impractical to send
a contractor out to every single property
you look at to give you an estimate.

This formula allows you to quickly get
a rough estimate of your rehab costs
in MOST markets.

Now keep in mind, before you actually
buy a property, get an accurate estimate
from a contractor, and have a home
inspector look at the house as well.

That said, it is really amazing how
accurate this simple formula is on
most rehabs.

If you want more tips and formulas like
this one, grab our Capital Rehab Group
Pro House Flipping Guide.

It is a series of videos that shows you
every trick, secret, and formula that
we have used again and again to
successfully flip houses.

Grab yours now:

4 Things to Bring With You to a Walk-Through

If you’re going out to look at potential houses to flip make sure to always take these four things with you.

I look at several properties every week. I always make sure to carry these four items with me.

1. Flashlight – this is probably an obvious one to you, but it’s very important.

A flashlight with a nice bright bulb helps you spot plumbing issues, water damaged areas, etc.
This is especially important when looking at vacant houses and foreclosure properties.
These houses won’t have power so you’ll need a flashlight to make your way around.

2. Tape Measure – this is important so that you can accurately estimate your repair costs.

Jot down the exact dimensions of any area that needs renovation work, i.e. the dimensions of a room that needs new flooring for example.  This allows you to calculate the cost of labor and materials and avoid unnecessary trips out to the property.

3. Camera – this is another obvious one, but a very important thing to take with you.

If you’re using hard money or a private lender, they always want to see photos of the property.

Since hard money loans are based mostly on how good of a deal you found, the photos are a big part of getting the green light on funding. (Photos you snap with your smartphone are great as long as you’re using a relatively new model.)

4. Notebook – use this to record what you see, hear, smell during a walk-through.

It’s tough to remember everything you saw during the initial walk-through.  My memory isn’t good enough to remember all the “mental notes” made when looking at a property for the first time.  Making simple notes of the things you see will help you determine whether to pass or go further with a deal.

Your walk-through can be a very exciting experience.  The feeling you get when you know you discovered a home run property is exhilarating.

Our Pro House Flipping DVD Package gives you the thorough step-by-step process our team uses to flip houses.  (Customers often tell us they picked up more house flipping tips from the DVDs than they did from attending multi-day seminars.)

Click Here to Get Your Set

Or Call: 1-844-240-2399

First Rehab – Bought and Rehabbed a Bank Owned Property

“Bought and Rehabbed a Bank-Owned Property”

-Casey S.
Corning, New York

“Hi, my name is Casey and I want to share my experience doing my first
rehab. My husband and I always knew real estate was lucrative, but we had zero

We found a 4 Bed/2.5 Bath two-story colonial in a nice part of town. It was a bank
owned foreclosure. The property was not advertised anywhere (there was a single
photo of a patch of grass from the front yard on a real estate website).



It was scheduled for auction in 30 days so we looked at it.

Overall the house was in good condition but was in bad need of updates. It still had
the original builders paint on the walls from 18 years before!

We found the bank was owed $223k on the mortgage and that’s exactly what we
offered. The comps in the area were all $300k+.

It took the bank longer than we expected to respond. We got the call that our offer
was accepted while in the airport on our way back from vacation.

It was an exhilarating and scary rush of emotion all at once!!

We closed in 30 days (using mostly other people’s money) and with a tip from our mentor saving money on realtor fees and closing costs.

My husband and I wanted the experience of doing a lot of the work ourselves so we made the decision to invest some “sweat equity” into the rehab.



Neither of us had experience with
construction. We both can change
light bulbs and that was about it. Demo
was the easy (and most fun) part, but I
don’t think we will do the work ourselves
on the next flip.

Here is a list of updates we made to the home:
– Took out wall to open up the kitchen with the
living room
– New hardwood flooring throughout first floor
– New landscaping and hardscapes
– Crown Molding
– New lighting (small recessed flood lamps)
– New paint throughout – Pottery Barn like earth tones
– New carpeting in all upstairs bed rooms
– Slate flooring in mud room
– New kitchen cabinets
– New granite counter tops
– New appliances



We saved on the labor costs – other than our time, but we got some great experience
doing the rehab. Our friend helped us with the rehab and we paid him $1,500 cash
and took him out to a steak dinner.

All the major work was completed in 45 days.

Here is the hardwood flooring (“Brazilian Teak”) we put in on the first floor.

Our overall net gain after expenses was $39,880. We liked the house so much and

had so many good bonding experiences during the rehab that my husband decided

to move in and keep it for a while. We were able to immediately get a HELOC at 2.9%

which we rolled into another opportunity.

We would not have taken this leap without having somebody to steer us in the right




Here is the photo of the living room finished.

THANK YOU so much – looking forward to the next one!

-Casey S.
Corning, N.Y.








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