Rehab Estimate
The projected cost to renovate a property to market standard. It's subtracted from ARV to set the maximum allowable offer.
A rehab estimate is the dollar figure an investor expects to spend bringing a property up to the condition reflected in its ARV comps. Early-stage estimates often start from a price-per-square-foot rule of thumb, then tighten into line-item scopes — roof, HVAC, kitchen, baths, flooring, cosmetics — as the deal gets serious.
Because it feeds directly into the 70% rule and the maximum allowable offer, an underestimate is one of the most expensive mistakes in the business. Experienced buyers pad for the unknowns behind the walls and walk when the repair number stops leaving room for profit.
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