Rehab Strategy · The Cowboy Sales Process

Estimating Rehab Costs

Getting your rehab budget right is one of the most critical parts of a successful fix-and-flip. Underestimating costs can turn a potential profit into a major loss. This guide will teach you a practical, repeatable method for estimating rehab expenses, straight from a seasoned investor's playbook.

The Strategy: Square Footage and Condition

Don't just guess your rehab costs. Instead, use a structured approach based on two key factors: the square footage of the property and its current condition.

The condition is broken down into three tiers:

Light Rehab: The property is in good shape and only needs cosmetic updates like new paint, some light landscaping, or minor repairs.

Medium Rehab: The property needs more significant work. This might include new flooring, a kitchen update, or a bathroom renovation.

Heavy Rehab: The property requires major overhauls. This could mean a new roof, updated HVAC system, major structural repairs, or a full gut and remodel.

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Step 1: Pinpoint the Property's Size

First, get the exact square footage. This is the foundation of your budget.

Property Size (sq ft):

Under 1,500

1,500 - 2,500

Over 2,500

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Step 2: Ruthlessly Assess the Condition

Now, for the tough part. Sellers lie. They will always try to sell you a dream. You need to be a realist. Ask the right questions to determine if it's a Light, Medium, or Heavy rehab.

Ask the seller:

"How old is the roof and HVAC system?" (If they're over 15 years old, you're likely in the "heavy" category.)

"When were the kitchen and bathrooms last updated?" (Outdated spaces with original cabinets and plumbing signal a "medium" or "heavy" job.)

"Any major issues with the plumbing, electrical, or foundation?" (This is a red flag for a "heavy" rehab, a category you might want to avoid.)

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Step 3: Calculate Your Rehab Budget

Based on your findings, use the chart below to lock in your rehab estimate. This is your kill-or-be-killed budget. No fluff, no "what-ifs."

Square Footage

Light Rehab

Medium Rehab

Heavy Rehab

Under 1,500 sq ft

$10,000

$25,000

$50,000

1,500 - 2,500 sq ft

$25,000

$35,000

$60,000

Over 2,500 sq ft

$35,000+

$50,000+

$75,000+

There are no rows in this table

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Your estimated rehab cost is a direct input for your offer formula:

Your Offer = After-Repair Value (ARV) - Rehab Cost - Your Desired Profit

Ready to apply this?

Tell me the square footage and a few details about the next property you're looking at, and I'll help you plug it into the calculator.

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The Cowboy Marketer⁠

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