Today, David invites his good friend Matt Hedstrom, the creator of Rehab Estimator Pro. Together they will discuss the features and how Rehab Estimator Pro will help you in your investing journey. Check out what other features Rehab Estimator Pro has.
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David: All right guys, welcome back to the discount property investor podcast. I am your host David Dodge. Mike Slane, my co-host is out in the field working on some of our rental properties, thank you Mike. Today, I am joined by Matt Hedstrom, and Matt is the creator of Rehab Estimator Pro, and Rehab Estimator Pro is a one-of-a-kind software that helps you estimate your rehab repairs. Welcome Matt, how you doing today buddy?
Matt: Great man! Thanks for having me on. It's good to see you again brother, its been too long.
David: Pleasure seeing you and I'm grateful for your time. Thank you for coming on today to talk about Rehab Estimator Pro. Now, this is awesome, you guys have put together a software that it helps every single investor get to the bottom of what the repair costs are going to be, and the thing about repair cost is they’re going to be so unique to every property. You know, very rarely are you going to come across a property that's going to need the same amount of work as the next one. I mean, there's always going to be a bunch of different things and before we jump on this podcast, I had the pleasure to just hang out with Matt for a few minutes and he was saying, you know, there's a lot of places online to go and to find values, you know, like Propstream is you know, one of our favorite tools that we use. You can also pull comps from the MLS if you have access or you're an agent or a broker. You can go to Zillow just to get a real quick from the hip estimate based upon like square footage and the ZIP code basically, you know. So, getting up the value of the property is relatively pretty easy, you know, but determining the repairs, everybody's going to struggle with that no matter what and guess what? I've been doing this full time for 6, 7 years, been investing in real estate for 15 and I still struggle with this guys. I'm not embarrassed to say it, estimating repairs is freaking hard, it just is. So Matt, I can talk all day man. You gotta- you got to jump in here and cut me off cuz hahaha.
Matt: You got it man.
David: I'm gonna keep going here haha, but it's that important so that's why I'm just happy to have Matt here today and to talk with us a little bit about Rehab Estimator Pro. This software is basically revolutionizing the way in which you know, people are determining their repairs and making them really accurate. So Matt, tell us a little bit about what you got going on here.
Matt: You got it man. This is something that you know, you hit it right on the head man. It's something that you know, you can go and learn in a boot camp, a 3-day class or whatever how to est- you know, estimate property values and where to get deals from but then when it comes to repairs, they just kind of tap you along and say all right man, you know, you'll figure that part out on your own but that is one of the most important aspects of any deal whether you're wholesaling it to another investor or whether your private money lender wants to see numbers, or your contractor, obviously, your hiring needs to have trust and faith in the numbers that you are out there writing offers with, right? So we can't just make this number up, we can't just use a standard square foot you know, number, that doesn't work, okay? I've got a system I developed that I basically took my 25 years of experience as a licensed contractor and in several states and said, hey, I want to put something together for my own self, okay, so that I can scale my business. This wasn't for the rest of the world, this was something that I wanted to put together so I could send my bookkeeper, my office manager, any acquisition person with no training out in the field to accurately repair- get repair costs with a checkbox style system that they can instantly in less than 13 minutes in any house, walkthrough check the boxes, and have a takedown number that they can go use to sell a contract with or by themselves or present it to a contractor and that's basically the gist and the theory behind the vision of creating Rehab Estimator Pro.
David: Wow, I love it man. So, the check box system, I mean it's literally that easy is you're walking through a property, you can check different boxes literally from your phone or an iPad or computer that you have out on the field with you. It is awesome. So, the ability to accurately determine repairs is, you know, the main thing that this does however, it does so much more too. So, the ability to send an offer is actually in here too so you guys actually can generate offer amounts and you can use those repairs that you're doing in real time in conjunction with your formula, right? So, you guys have- you know I'd imagine you use an MAO type formula where it's you know, the ARV of property multiplied by discount rate depending on the neighborhood minus the repairs and then maybe minus a wholesale fee if you want to do that, but you can even take that off on your own and the repairs that you are determining with the process of walking through like you said in about 13 minutes or less is actually outputted into that formula so that- mean, I think that is like one of the most amazing things, and the reason is when I'm talking to my students, you know, I call it the three pillars of wholesaling and really it's marketing to motivated sellers, it's making offers and it's following up. And those are the three things that are the money-making activities when it comes to whole thing, right? Like everything else is important in its own time, right? but if you are not consistent with those three things, your business either won't ever take off, it won't grow or it may even starve and die, right? Those are the things that matter. Marketing to motivated sellers, making offers and following up, and you know marketing to motivated sellers is not necessarily that difficult but it's hard to get people to start doing that.
David: You know I think it's harder to get them to do is to make offers.
Matt: Right right, yeah.
David: Right? because they're just nervous. You know in my company, we make 4, 5, 6 offers a day, you know like somebody sends me an address, I don't even know the number. I'm sending them a number right back. That's what I'll pay you for. I mean, it's just natural to me, right? but when you're new, you don't know that you need to send offers. The number of offers you make is going to- is basically in direct correlation to the amount of money you're going to make, right?
David: So, the ability to send an offer and I'm going to beat this dead horse here, but I already am right? is so important, so the ability to do that is cool. Now, you guys also have the ability to create a scope of work. Now, that's basically what you're doing when you're creating your repair estimate. You're using that number to offset the numbers in your formula to get an offer price. You're also using that to create a scope of work. So that scope of work could be given to a contractor, it could be offered as just repair estimates and you know, what repairs a property may need if you're going to just be marketing to sell that property or you can give it to the seller to show them hey, this is where I'm getting my repairs from. Like, the scope of work also is like so valuable, but I think it's you know, people often oversee that. They don't see that there's you know that that's needed but it is and it's extra which I love. So, estimating repair, creating offers, and sending those offers, then obviously creating the scope of work, those things all tie together and they're so important and most people either don't know how to do these things or they're not doing them right. So, what am I missing? I know you guys even-
Matt: No, it's just great man, and you're right man. You're not an investor if you're not making offers out there, like that is primary and so, you can teach the mechanics of so many things like you said, I can teach people to put letters in the mailbox, I can teach people how to drive for dollars, I can teach people how to find these lists. That's all- that's great but what you find then and especially you have a coaching program, I have a coaching program, what we find is that there's a lack of confidence and there's such fear when it comes to actually getting out that first offer so I try to tell people look, here's the thing you can- like you said, you can send it right from REP, from Rehab Estimator Pro and so it can be as easy as this: go on it for sale by owner, go on Zillow and click the fsbo leads, okay. Look through the pictures of the house online and use the repair estimator online and you can send it to an email to the agent that's listed right there. Boom, you just made your first offer. Okay, now do that 10 times a day, okay? Guess what? What's the worst that's going to happen? Somebody's going to call you back, somebody's going to accept an offer or somebody's going to have to have you come out and look at the house now, but you've got to get past the fear. Everybody can learn how to do comps and pull a value like you said but what I find most with people is that they're terrified when it comes to oh my gosh, I'm not qualified to get a repair list and how am I going to know? So, that's what we want to equip you with. We want to give you the confidence to give right offers all day long because you can trust these numbers.
David: Absolutely. I think that's amazing. This is awesome. So, if you guys want to go check out Rehab Estimator Pro, and Matt and I are going to continue to talk about some of the other things that it does and how easy it is. I know that last time we had spoken, you said that you had built this obviously for yourself, but you wanted it to be as easy- easy to use to where you could literally hand it to your bookkeeper that knows nothing about real estate and have them walk through a property and come back with a very very accurate number for those repairs. I think that's awesome. So, we have a coupon code for you guys today it's DPI and that stands for discount property investor, that's our podcast. This is actually going to be about a 66% savings in the actual cost of using Rehab Estimator Pro. So guys, if you want to check it out, it's rehabestimatorpro.com and then use the coupon code DPI for discount property investor. It's about a 66% saving, so Matt thank you so much for allowing our audience to get that discount, that is awesome. So, what the- what am I missing that you guys are doing with Rehab Estimator Pro? Tell me some of the things that your users are finding that is the most helpful.
Matt: That's great man, that's a great question. So, number one, it is going to give you an ARV in the front end, okay? but it's going to use Zillow comps and it's going to also give you a based on square footage comparisons as well so it's going to give you a couple different ways to look at it cuz we always should take a few different ways to look at a house, right? You know, come up with three different ways to kinda you know, find that magic number, do your due diligence but it's going to give you that ARV, then those repair costs are what’s solid. It's also going to break down like you said for that MAO formula. It's going to be really really close within hundreds of dollars to 70% formula, but that's not just a simple formula, you're going to see stuff like here's my holding cost, here's my purchase cost, here's the miscellaneous cost you know, it's going to break all those down, those fees for you so it's actually showing the seller that you came up with a legitimate number with legitimate facts, okay?
David: Oh okay, you're talking about the sellers net sheet, that's what I call it.
Matt: Right right and there is- there is though a separate seller net sheet, but that- this is just to kind of show a quick glance. If you want to actually show, there is a seller net sheet function in there.
David: Oh that's [inaudible].
Matt: So that's a really cool feature that we added but it also- we got some really cool coding that's been happening where it's getting into rentals now and we've got some really sophisticated formulas we've been working with investors all over the country to get cash on cash return and to show you know, those other ways that you can break down a deal to show hey look, I want to give multiple offers to this seller every time, okay? So, you're going to see the cash offer, but then you're also going to see a couple of seller finance offers, okay? So, now you got three different ways that you can present an offer to a seller and so you're basically at the table now and basically using some of the same language that you coach with like okay well, which one do you want to go with? You know, which deal do you want to go for? Like, let's get this wrapped up by giving you multiple options versus just being the guy that walks in, gives a cash offer, oh you don't want it, it's too low, alright see ya, when you just said one of the pillars is follow-up, right? I mean, now that you got that offer out there, your follow-up begins, but that fear is gone, the offer was sent and now you have room to- you have time to negotiate and do that follow up. So, it's one of the ways you can use the tool as well.
David: I love it. You know, doing return on investment and analysis, obviously the fact that it pulls like an estimated ARV which again you had said, you Matt, you always want to look at, you know, lots of different places to get your own ARV, but it is at least going to kinda put you in the ballpark, right? So, that's super helpful. And then you guys have a discount rate I'd imagine that you can maybe move up and down for certain areas like you know-
Matt: Yeah, so here-
David: You know, MAO equals ARV times 70% minus repairs, but you know there's a lot of neighborhoods here in my- where I'm looking at my window right here where it’s like I wanna buy that house right there, but there's no way they're going to accept a 70% offer on that one, you know, like I'm gonna have to come in at 80% to get that one so you can adjust those as well for the offer generator.
Matt: With just a few clicks. So, we also- I did add a- we just recently added this since we last talked, but we added ARV multiplier, okay. So, we're like basically repair value- a multiplier on there as well where I got a lot of feedback from people about- you know saying this: hey man look, I live in LA or I live in Washington or I live in Alabama, my costs are different than your costs and you know, I always called bull on that because it's like look man, a can of paint at Lowe's cost the same in every store across the country, okay?
David: Yeah, minus the sales tax which may vary a little.
David: But I mean, yeah, I agree Matt like it's not gonna be that much different, right?
Matt: It's not. So, but I did create a chart just to show you for every major market and then some outliers to show in a multiplier chart so that if you want to adjust up or down, feel free but just work- just test it, you know, just test it out.
David: [inaudible] all the materials and cost basically just multiplied so you can. So if somebody says yeah well, my labor’s higher, boom hit the multiplier a little bit and boom, you're able to average it out and it's going to be a little trial and error, but that's okay, that's the purpose of it, to fine tune it and get it right. I love that man, that's really cool.
Matt: [inaudible] man, it's no training. You just out of the box man, jump in and what a great way too to sit down and meet contractors and talk with them about pricing, right? Cuz if there's a fear that's there as well that you don't talk the right talk as contractors and you don't know how to you know, you think they're going to take advantage of you. Well, show them the pricing and just say hey man, this is what- this is what I've got for a value you know, should I tweak this up or down a little? Are we close in the ballpark? Like if I'm selling jobs for you, then where do I need to be at, and you can adjust it that way as well.
David: That's a great point, I love that. So, the ability to estimate repairs very accurately, the ability to send offers to the sellers, the ability to create a scope of work to use to sell the property or to give to your contractor to then go fix it in the event that you're buying the property. Awesome, you have a sellers net sheet, which we talked a little bit about, but it's basically the ability to show a seller what they're going to net and the one I'm familiar with has a couple different options, you know if they were to list it MLS or so on so forth, but regardless, it has all the different fees and cost that they're going to have if they were to sell the property, right? and it shows basically that you know, time is our biggest asset whenever we're buying properties, right? It's our biggest- I shouldn't say assets, our biggest convenience that we can offer, right? And we can close on your house in you know two, three, maybe four weeks, that's extremely fast. A traditional real estate, you're taking 3 to 4 months typically on average, if not more to get rid of a property, to liquidate it, to sell it. So, when we come in, you know, that's the thing we can say: yeah, you know, this offers going to be a little lower than what you can get elsewhere you know, but you may have spend 20 grand updating it and then spend 4, 5 months listing it so on so forth. Is that time worth that money, and often times it's not. So, a sellers net sheet Matt is actually one of my favorite tools because here's how I look at it, sellers net sheet does one thing very very well, its a lot of things, right? but the one thing it does very very well is it takes an offer that somebody may interpret as being low, and it makes them now interpret that offer as being fair, because they can see how you got that offer, not just coming from the hip throwing out some number. You have a calculated, you know, set of parameters and here it is, you know, and also it removes all the emotion from it as a buyer, you know, cuz there's a lot of houses where I'm like man, I really like that one and then I want to start chasing it.
Matt: Right, oh yeah. Dangerous, yeah.
David: You gotta remove the emotion from investing, so the sellers net sheet, very very cool. And then the ability to kind of start with an ARV and my man, you guys are nailing it. You guys are hitting it out the park, this is awesome.
Matt: Right, again, our focus man. Sorry, our focus again, we focus all our energy on being the number one tool and the only tool that does of its kind to get your accurate repair costs so that you can trust that, so I'm not going to put any more energy into tweaking you know, your ARV to make sure it's solid, there are other great tools that do that, okay, so and again on the other side too, there is a calculator for putting a wholesale fee in for also analyzing rental property, but I'm not going to continue to add like a CRM system, you know to this or project management for me.
David: [inaudible] either man, yes. Stick to the niche of doing what you're doing but I love- yeah and again, I think that you have all the right tools, you know, like the ability to send an offer, the scope of work, those things all tie back into the repairs. Same with the sellers net sheet, right? So, those things are kind of- their kind of needed but you have them which is great. But yeah, you don't need all that other stuff in there because then it just gets- it just gives overwhelming.
David: The ability to keep it simple and let the bookkeeper be able to do it for you if you need it too [inaudible]. That's the goal and when you start adding all this other stuff on there, then it gets complicated and I love that it's simple too man. I love it. Guys, rehabestimatorpro.com, use coupon code DPI, that's discount property investors initials and again, you're gonna save about 66% on the monthly cost. Just go try it out, I promise you you're going to love it. I've been using it for several months now, it's helping us. Like I said, I am terrible at estimating repairs. I'm real good at running comps cuz I have five different software’s that help me with it, but when it comes to running- when it comes to doing repair estimates, I mean prior to Rehab Estimator Pro, I was calling five or six contractors to give me bids and I'm getting these bids and I can't even read them.
Matt: Right haha.
David: So, that's where you guys need to be if you're struggling with repair estimates, but again it has a whole slew of other tools in there which are really going to help you and that's the thing Matt, like you know the three pillars. I don't know why I call it that, I look at it kind of like a stool though, right? Cuz if you don't do all three of those, your stool's going to fall down and it's very simple, marketing to motivated sellers, it's making offers and it's following up. And the marketing to motivated sellers, there's a lot of different ways to do that and it's easy to teach, and the follow-up, lot of different tools to help you with that and it's easy, but the making offers part is not only difficult to teach, but it's difficult for them to learn and then implement, right? So, the ability to have somewhere to go send offers is so incredibly helpful. I've actually built a little tool but it's not even really worth talking about cuz yours is better to help my students just automate sending offers because you know, every contracts a little different with your- with your fine print, your additional terms and conditions or whatever and you know, and then you have to have like a signature software whatever and it just- it complicates things. So, the ability to have that built in too, I think is awesome. Matt, thank you so much for your time today. Thanks for coming on the show again. Thanks for talking about a solution to a problem that we all have and again, I am grateful for your time my friend. Any parting words for today Matt?
Matt: Man, just encourage people to just get out there and if you haven't made an offer, just do it today. Just make sure- just do it today, don't put it off until tomorrow man, just make an offer and if you already are, you've made a few or you're making offers, then it's time to turn that up man. Just make a goal for yourself that you're going to put- you know you said you guys are putting out 4-5 a day. I mean that's where people [inaudible]
David: I mean really like, I'd say verbally we probably make close to 50 offers a day.
Matt: Right, so-
David: But that's like, you know, cold call or you know via Batch when we're doing cold texting and whatever.
David: You know, but we're sending usually five or six written offers every single day.
Matt: That's great man. So, even if that's overwhelming for someone at first, then make it a goal to say I am going to send at least one offer a week, who- everybody can do that.
David: Yeah, everybody can do that. Man, I love it. Well you guys heard it from Matt himself. Matt, thanks again for coming on the show. Guys, rehabestimatorpor.com, the best tool by far for estimating repairs, helping send offers, running scopes of work, and using a sellers net sheet to justify your offers as being fair not low. Use code DPI on check out and you're going to save 66% thanks to Matt and that's it guys, signing off, we’ll see you next time.
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