How to estimate repairs on a wholesale deal before you make an offer
Most offers that fall apart do not fall apart on ARV. They fall apart on repairs. The comps were fine, the seller was motivated, and then the buyer walked the house and found a roof, a panel and a foundation crack nobody priced.
You usually have to put a number on repairs before anyone has been inside. That is fine. The goal on the first call is not an exact figure. It is a number you can defend, built from things the seller actually told you.
Ask about the house in the order it costs money
Sellers answer condition questions honestly when you ask them one system at a time. "What shape is the house in?" gets you "it needs some work". These get you a repair number:
- Roof. How old is it? Any leaks or stains on the ceiling?
- Foundation. Any cracks, doors that stick, floors that slope?
- Plumbing and electrical. Any leaks, old panels, outlets that do not work?
- Heating and cooling. How old is the system? Does it run?
- Kitchen and bathrooms. When were they last updated?
- Floors, paint, windows. What would you change if you were staying?
Write down what they said, in their words, against each line. That record is worth more than the number, because when the buyer's walkthrough disagrees with you, you can see exactly which answer you priced and which one you guessed.
Build it room by room, not as one number
A single "about forty thousand" hides every assumption you made. Break it into lines:
- List each room and each big system (roof, foundation, HVAC, electrical, plumbing).
- Give each one a condition: light (paint, fixtures), medium (new surfaces, some replacement) or heavy (gut and rebuild).
- Put a cost on each line using numbers from your own market: contractor bids you have seen, a buyer's rehab budgets, or a local contractor you can call.
The repair cost calculator does exactly this. Its starting numbers are placeholders for a worked example, not market prices, so change every line to what things cost where you buy.
Add a contingency on purpose
You have not seen behind the walls, so say so in the math. Add a contingency line on top of the room total and write down why you chose it. A house the seller described in detail, with recent updates, needs less. A vacant inherited house the seller has not visited in a year needs more.
What matters is that the contingency is a visible line you chose, not padding hidden inside every room. Hidden padding makes your offer worse without telling you why.
Feed the number into your offer
Your repair estimate is one input to your maximum offer, next to ARV, your fee and the buyer's margin. Run it through the MAO calculator and look at how much the offer moves when repairs move. If a ten thousand dollar change in repairs kills the deal, you need a better repair number before you need a better script.
Check it against the walkthrough
When you or a buyer finally walks the property, compare the walkthrough with your lines, not with your total. Which rooms were right? Which system did the seller not mention? That comparison is how your next estimate gets better. Over a few dozen deals it becomes your own price list for your own market, which is worth more than any rule of thumb.
The short version
- Ask about the house one system at a time, in the order it costs money.
- Price it room by room with a condition level, using your own market's numbers.
- Add a contingency as its own line, and write down why.
- Run it through your maximum offer and see how sensitive the deal is.
- Compare the walkthrough with your lines, and keep the differences.
Want the rest of the call on one page? The free cold calling script covers the opening, the condition questions and what to say when the seller pushes back.