Repair Estimating

Why repair estimates matter

After the ARV, the repair estimate is the second biggest number in every offer. Underestimate repairs and the deal will not sell to any buyer. Overestimate them and the offer is too low to win. The goal is not perfection on the first call. The goal is to be consistently reasonable, so offers are fair and buyers trust our packages.

The four repair tiers

Each tier includes everything in the tier before it.

Tier	What it includes	Typical picture
Easy	Light fixtures, flooring, interior paint	Lived-in and maintained. Dated colors and worn floors. Everything works.
Needs Work	Everything in Easy, plus countertops and appliances, vanities and toilets, exterior paint	Kitchen and baths are old but usable. Exterior looks tired.
Full Cosmetic	Everything in Needs Work, plus cabinets, tubs and showers, water heater	Kitchen and baths need replacing. Interiors are original or worn out. Major systems mostly OK.
Full Gut	Everything in Full Cosmetic, plus roof, HVAC (heating and cooling), windows	Big systems are old or failing. The house needs nearly everything.

The Narqix rehab table

Find the row for the home's living area, then the column for the tier. Amounts are in US dollars.

Living area (sqft)	Easy	Needs Work	Full Cosmetic	Full Gut
500 to 1,000	10K	20K	30K	50K
1,000 to 1,500	15K	30K	50K	60K to 70K
1,500 to 2,000	20K	40K	60K	80K to 90K
2,000 to 2,500	30K	60K	80K	100K to 120K
Over 2,500	40K	80K	100K	130K to 150K

Using ranges: for Full Gut, use the top of the range when information is thin or the seller is vague. Use the middle only when the seller gave clear, specific answers and photos support them.

Between rows: if a home is right on a boundary (for example 1,500 sqft), use the higher row when the condition is uncertain.

Cross-check: cost per square foot

As a quick sanity check, for mid-size homes (about 1,500 to 2,500 sqft) the table works out to roughly the numbers below. Small homes cost more per square foot, because a kitchen, a bathroom or a furnace costs about the same in a small house as in a large one.

• Easy: about USD 10 to 15 per sqft
• Needs Work: about USD 20 to 30 per sqft
• Full Cosmetic: about USD 30 to 40 per sqft
• Full Gut: about USD 40 to 60 per sqft

If your number is far outside these ranges, check the row and tier again.

Picking the tier from phone answers

You will rarely see the house. You will hear about it. Ask about the big five first, then the finishes.

The big five (they decide Full Gut)

1. Roof: "About how old is the roof? Any leaks?"
2. Heating and cooling: "How old is the furnace and the AC? Do they work?"
3. Windows: "Are the windows original, single pane, or replaced?"
4. Plumbing and water heater: "Any leaks or plumbing problems? How old is the water heater?"
5. Electrical: "Has the electrical panel ever been updated?"

The finishes (they decide Easy, Needs Work or Full Cosmetic)

• "Are the kitchen cabinets original, or have they been replaced?"
• "What about countertops and appliances?"
• "Are the bathrooms original? Tubs, showers, vanities?"
• "What's the flooring like? Carpet, wood, tile?"
• "When was the inside last painted? The outside?"
• "If you were keeping the house, what would you fix first?"

Decision guide

What you hear	Tier
"Just needs paint and new carpet." Kitchen and baths updated in the last 10 to 15 years. Systems fine.	Easy
Kitchen works but counters and appliances are old. Bath vanities and toilets are dated. Outside needs paint. Systems fine.	Needs Work
Kitchen cabinets and bathrooms are original or falling apart. Old water heater. Roof and HVAC are fine or fairly new.	Full Cosmetic
Roof over about 20 years old or leaking, HVAC old or not working, original windows, plus dated interiors	Full Gut
Two or more of the big five are failing	Full Gut, even if the seller says "it just needs a little work"

Red flags: beyond the table

Some problems are not covered by any tier. When you hear them, write them down clearly, choose at least Full Gut, and flag the lead for acquisitions review. Do not try to price them yourself.

• Foundation problems: large cracks, sloping floors, doors that do not close
• Fire, flood or major water damage
• Mold that covers large areas
• Septic system failure or well problems
• Sewer line backups
• Termite or structural wood damage
• Very old wiring types or an electrical panel the seller says is "dangerous"
• Unpermitted additions or garage conversions
• Hoarding, heavy trash-out or squatters
• Asbestos or lead paint concerns (common in older homes)

Regional cost note

The table assumes average US costs. Labor and materials differ a lot by region:

• Higher-cost areas (for example large coastal metros in California, the Northeast and the Pacific Northwest): costs can run 20% to 40% higher. Ask your client for their local factor.
• Lower-cost areas (many parts of the Midwest and South): costs can be lower, but labor shortages can change this quickly. Never go below the table without your client's approval.
• Older homes (built before about 1960) often hide extra costs. Leave room.

Worked examples

Example 1: Easy, 850 sqft

Seller says: "My mother lived there until last month. It's clean. Kitchen was redone about 8 years ago. Roof is 6 years old. It just needs paint and the carpet is old."

Tier: Easy. Row: 500 to 1,000 sqft. Estimate: 10K.

Example 2: Needs Work, 1,250 sqft

Seller says: "Kitchen works fine but the counters are the old laminate and the stove is 20 years old. Bathroom vanity is old. The outside paint is peeling. Roof and AC were replaced about 7 years ago."

Tier: Needs Work. Row: 1,000 to 1,500 sqft. Estimate: 30K.

Example 3: Full Cosmetic, 1,450 sqft

Seller says: "The kitchen is original from 1979, cabinets and all. Both bathrooms are original too, with the old tubs. Water heater is maybe 15 years old. The roof is 8 years old and the furnace and AC were put in 6 years ago."

Tier: Full Cosmetic (cabinets, tubs, water heater; big systems fine). Row: 1,000 to 1,500 sqft. Estimate: 50K.

This is the house used in the ARV worked example on the Underwriting 101 page.

Example 4: Full Gut, 1,850 sqft

Seller says: "Honestly, everything is original. The roof leaks in the back bedroom. The AC died two summers ago. Windows are the old single-pane ones."

Tier: Full Gut (roof, HVAC, windows). Row: 1,500 to 2,000 sqft. Range: 80K to 90K. The seller gave clear answers but there is an active roof leak, which can mean hidden water damage. Estimate: 90K (top of range).

Example 5: Full Gut plus red flag, 2,800 sqft

Seller says: "There was a kitchen fire last year. Insurance paid out but we never fixed it. Smoke damage in most rooms."

Tier: Full Gut. Row: over 2,500 sqft. Range: 130K to 150K. Estimate: 150K plus a red flag for fire and smoke damage. Acquisitions must review before any offer; a contractor's opinion is likely needed.

How to write the repair note

Use this short format in the CRM:

• Sqft and row: for example "1,450 sqft, row 1,000 to 1,500"
• Tier: for example "Full Cosmetic"
• Estimate: for example "50K (Narqix planning estimate)"
• Big five: roof age, HVAC age, windows, plumbing and water heater, electrical
• Finishes: kitchen, baths, floors, paint
• Red flags: any, or "none mentioned"
• Source: seller phone answers, photos, or walkthrough

Check yourself

1. List what each of the four tiers adds.
2. A 1,700 sqft home needs a new roof and AC, and the kitchen is original. What is the estimate?
3. When do you use the top of a Full Gut range?
4. A seller mentions "big cracks in the basement wall". What do you do?
5. Why do we call these planning estimates, not contractor bids?

Answers

1. Easy: light fixtures, flooring, interior paint. Needs Work adds countertops and appliances, vanities and toilets, exterior paint. Full Cosmetic adds cabinets, tubs and showers, water heater. Full Gut adds roof, HVAC, windows.
2. Full Gut, row 1,500 to 2,000: 80K to 90K. Use 90K unless the seller gave clear, specific answers.
3. When information is thin, the seller is vague, or there are signs of hidden damage.
4. Note it as a red flag (possible foundation problem), choose at least Full Gut, and flag the lead for acquisitions review.
5. They are fast, consistent first numbers from phone answers. Real costs depend on the house, market and contractor, and a real bid replaces them.

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