Learning Center · Deal Analysis
How to Estimate Rehab Costs on a Flip
By FlipProperties Editorial TeamPublished October 22, 2026Updated October 22, 2026PropStream figures checked October 2026
Your repair estimate sets your offer. Underestimate it and the profit disappears; overestimate it and you lose the deal. This method helps you build an estimate you can defend: walk the property, price it line by line, get bids, and add a contingency before you make an offer.
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10–20%
Contingency range HUD's 203(k) program uses for older homes
1978
Homes built before this year fall under EPA lead-paint renovation rules
70%
Rule-of-thumb share of ARV, minus repairs, for a maximum offer
Sources: HUD 203(k) contingency requirements; EPA Renovation, Repair and Painting Program (checked October 22, 2026).
How to estimate rehab costs, step by step
- 01
Walk the property with a checklist.
Go room by room and outside. Note everything that needs repair or replacement, and take photos.
- 02
Price each line item.
List materials and labor for each item rather than guessing one total. Small items add up.
- 03
Get contractor bids on the big items.
Roof, HVAC, electrical, plumbing and foundation work are where estimates go wrong most often. Get more than one bid when you can.
- 04
Add permits and fees.
Check your city or county's permit requirements. Structural, electrical, plumbing and mechanical work usually needs a permit.
- 05
Check the year built.
If the home was built before 1978, paid work that disturbs paint must follow EPA lead-safe rules, which can add cost and time.
- 06
Add a contingency.
Hidden problems show up once walls open. HUD's 203(k) renovation loans require a 10% to 20% contingency reserve on homes 30 years or older, which is a useful benchmark.
- 07
Plug the total into your offer.
Subtract your repair estimate in the 70% rule, then check the result against real comps.
Room-by-room checklist
| Area | What to check |
|---|---|
| Exterior | Roof, gutters, siding, windows, doors, driveway, drainage and landscaping. |
| Systems | HVAC, electrical panel and wiring, plumbing, water heater and sewer line. |
| Structure | Foundation, framing, signs of water damage and termite damage. |
| Interior | Kitchen, bathrooms, flooring, drywall, paint, trim and lighting. |
| Other costs | Permits, dumpsters, cleaning, utilities during work, and staging. |
How much contingency to add
There's no single right number, but a government benchmark helps. HUD's 203(k) program requires a contingency reserve of 10% to 20% of repair costs on homes 30 years or older, and at least 15% if the utilities aren't working. Older homes, unknown systems and vacant properties are good reasons to aim higher.
Lead paint in homes built before 1978
Under the EPA's Renovation, Repair and Painting rule, anyone paid to do work that disturbs paint in housing built before 1978 must be EPA-certified and follow lead-safe practices. Small jobs are exempt: 6 square feet or less per room inside and 20 square feet or less outside. Window replacement and demolition are always covered. Budget for a certified contractor if your flip is an older home.
What an underestimate costs you
Say a home's after-repair value is $300,000 and you estimate $40,000 in repairs. The 70% rule gives a maximum offer of $170,000. If repairs actually run $60,000, the maximum offer should have been $150,000, so you overpaid by $20,000 before any other costs.
That's why the estimate comes before the offer, not after. See a full fix-and-flip cost example.
Where PropStream fits
PropStream's Rehab Calculator estimates repair costs, including a do-it-yourself estimate, so you can rough out a number before you walk the property. Treat it as a starting point and confirm with your own walkthrough and bids.
Source: PropStream feature pages (checked October 2026). Plain text, not a link.
Where to go next
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Run the numbers first.
Estimate repairs and comps in PropStream.
PropStream's 7-day trial includes 50 leads. Pull a property, rough out repairs with the Rehab Calculator, and check your offer against comps.
Start the free 7-day trialRehab cost questions
Walk the property with a checklist, price each item for materials and labor, get contractor bids on the big items, add permits, and add a contingency. Then subtract the total in your offer math.
There's no single rule, but HUD's 203(k) program requires 10% to 20% of repair costs on homes 30 years or older, and at least 15% if utilities aren't working. Older or vacant homes justify the higher end.
If the home was built before 1978 and paid work will disturb paint, EPA rules require a certified firm and lead-safe practices, with small-job exemptions. Check the EPA's rules before you start.
Often, for structural, electrical, plumbing and mechanical work. Requirements vary by city and county, so check with your local building department.
Directly. With the 70% rule, every dollar you add to repairs lowers your maximum offer by a dollar. A $20,000 underestimate means a $20,000 overpayment.