Posted on: April 15, 2020

At this time of economic uncertainty and social distancing, many entrepreneurs have resorted to the best alternative available—doing things virtually. If it’s something you’re not accustomed to, you’d be delighted to know using the right tools can make the transition a lot easier!

Today’s brilliant guest is Matt Hedstrom. Matt is the brains behind Rehab Estimator Pro, an advanced tool that can help you evaluate ON THE SPOT what a property needs to get done and how much the repair (if any) will cost. That means before you leave any property, you’ll be able to provide the seller with an offer AND have the details to back it up!

In this episode, discover who the tool is for, how you can use it, and how your business can benefit from it. With tools like Rehab Estimator Pro, you’ll not only be able to make your transition to the virtual world seamless, you can also ensure the impact of today’s economic downturn to your business stays minimal!

 

Key Takeaways

  • Where he got the idea to build Rehab Estimator Pro
  • Two things you can’t mess up in a deal
  • One of the biggest pain points of the wholesaling business
  • What ARV means
  • Walkthrough of how Rehab Estimator Pro works
  • How easy the tool is to use especially for newbies
  • How long the entire process is going to take
  • How he built a universal and trusted system
  • Number one objection he gets all the time
  • Who the system is built for
  • The advantages of using the tool
  • How the tool can be beneficial especially at times like these
  • Where you can go to get 70% off his app

RESOURCES:

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Episode Transcription

Chris Arnold:
I’m your host, Chris Arnold. And this is actually a very important show because we got a lot going on in the market right now. We’ve been talking a lot about how we’re more effective doing things virtually and to do things virtually you need tools. You need tools like Zoom, you need tools like JoinMe, all that type of stuff. And I’ve come across a tool. And when Matt showed this to me, we jumped all over it because it was able to come in and help us take our virtual process to another level. So what are we talking about today? If you’re sticking around, this is what you want to hear. This is a tool that’s going to help you do virtual marketing at a whole nother level. So my guest today is Matt Hedstrom with Rehab Estimator Pro. Matt, what’s up, buddy? How are you?

Matt Hedstrom:
Awesome man. Doing well, man. Thank you for having me.

Chris Arnold:
Let’s talk about this thing that you built before we even get into it. I want to know how did you get this idea to build a software that would help us actually estimate the repairs on a property, and as we’ll talk to be able to do it virtually, where’d you come up with this?

Matt Hedstrom:
Great question, man. Most of what I produce is usually for me and my team, because we’re still doing deals. That’s what we do every day. So this was developed as something for us to make it simpler. And I’ve been a general contractor for over 25 years. And so it was really developed for our team to make this simple. And once people started seeing it, it just kind of blew up. We wanted to make it easy for anybody, including my goal setting out was, “Hey, how can I get my bookkeeper even out to appointments and trust what they’re doing out there. As far as getting repair costs, getting our take down number.” And that was the basis of it.

Chris Arnold:
So you built this to scratch your own itch, which what I always love when things develop, as you look around your own operations and go, “I got to fix this.” And then you realize you built something that everybody can benefit from, which is what you’ve done now. The thing I love about Rehab Estimator Pro is I’ve learned, as you say, and I love it. There’s two things you can’t screw up in a deal or you’re in trouble. What are the two things you can’t screw up?

Matt Hedstrom:
Yeah. Anybody in this business, two things you can’t screw up your ARV, that after repair value. And then your repair costs after that, you screw those up and your deal’s done. It’s gone.

Chris Arnold:
And how many investors found laughing because I think [inaudible 00:03:30] understands this. How many investors, wholesalers, et cetera, are frustrated because their repair amounts on a property are actually not accurate or not even being done accurately?

Matt Hedstrom:
That is one of the biggest things in this business that takes you down so fast and earns you a bad reputation as well. Those numbers have to be accurate, accurate enough to actually take that deal down. So it is one of the biggest pain points in this business. I tell people all the time, one of the hardest parts about this business is dealing with contractors, but to even get to that contractor stage, you’ve got to have an accurate way to estimate repairs quickly.

Chris Arnold:
I totally agree about that. As I see, one of the biggest questions that always come up and even with newer investors is the question is deal or no deal. Do I have a deal? Do I not have a deal? And you’re right. You know you have a deal if you can figure out two things, what is the after repair value if this properties fixed up what’s it going to sell for? And on top of that in order to figure out what profit I can make on it, I need to be able to determine the repair amount. And usually the ARV is easier to figure out utilizing the Multiple Listing Service. Then of course the actual repairs on a property. I totally get that. So you finally have this program that allows you to efficiently get in and determine the repair amount. Give us a philosophical walkthrough of how this thing works. How does it work?

Matt Hedstrom:
Okay. Yeah. And I appreciate you’re right on to about, we all have access in some way or another, whether it’s through apps or other tools that connect to the MLS or using the MLS. So everybody gets really highly trained on that, but then we just expect people to understand how repairs work.

Chris Arnold:
So true. That’s so true. I totally agree. It’s like, “Oh, you can figure out the repair thing on your own.”

Matt Hedstrom:
You go and teach people… You can attend a three day training event. And learn the basics of real estate. But then it’s insulting to me to say, “Oh, and by the way, you can get from your cubicle, you can direct the job site and figure out repair costs and run subs.” It’s 40 grand that’s all you need for the repairs. So it is insulting in that way. And it’s also extremely dangerous. So why do we have a system like the MLS that we trust for our accounts or ARV. But when it comes to repairs, we all just wing it, pull a number out of our rear end and go, “Ah, it’ll be about 30 to 40 grand on this one.”

Chris Arnold:
Let me say it again. We all trust the MLS for the ARV. And it’s true, if you’re a real estate agent, if you’re a lender, it doesn’t matter. But you’re saying, if you think about it, there’s no trusted system that allows us to all get on the same page about what the repair of a property should be. And that’s why everybody’s frustrated about this because nobody’s on the same page,

Matt Hedstrom:
Right. There are many systems out there. We have so many systems within great CRMs. There’s so many great CRM systems out there. They all have some kind of repair estimator in them. You have to do that, but you open them up and there’s 4,000 lines that you have to go through and say, “Okay, we need to know the lineal footage of crown. We need to know the square yards of carpet. We need to know how many squares on the roof.” Most people have no idea. They’re not going to calculate these things. So the basis and philosophy behind this is that you can go through a checkbox system on the screen and just check off the things you need. And it will automatically calculate your repair costs.

Chris Arnold:
So let me ask you this. I’m listening and I’m going okay, seriously, Matt, how easy is this to use? Scale of one to 10, again, you built it. So you’re going to think it’s easy, but I’m a newbie investor. I don’t know a lot about repairs. How easy is your system to actually use, to generate a number that I can count on?

Matt Hedstrom:
Yeah. I love that because the approach that I started with was, “How can I send my bookkeeper out to do what I do? How can I trust them to go out and do with all the experience I have, is my company going to be based on me only, getting in every single deal? I can’t do that.” So this forces you as an investor or a newbie, or even an educated, you’ve been doing this a long time. It’s basically like a checklist. You pull up to a house. Most of us as investors, we know. We haven’t even gotten to the front door and we’re already checking out. We’re looking at the roof, we’re looking at the siding, we’re looking at the gutters, we’re looking at the yard. So this forces you to look at all of the main components of a house.
So when you walk in, it’s going to ask you, when you check on interior, exterior, your mechanicals, it’s going to force you to look at the furnace. It’s going to force you to look at the AC, or the electrical panel, or the water heater, the kitchen, the baths. So it’s really a checklist system as well that you’re being forced to go through. So you don’t forget anything.

Chris Arnold:
So I see it. So I’m visualizing it. And again, I’m doing this for the audience, as you’re thinking about it, I walk up to the house. I have an app. The app is going to remind me everything I need to look at because it’s going to require a check or a no check. And as I check it, it’s automatically going to start pulling up the repairs. And as I’m checking, it’s tallying a total at the bottom of the screen. Correct?

Matt Hedstrom:
Got it. Nailed it. Yep.

Chris Arnold:
That’s how you do it. So here’s my question. On average, how long does it take, does it take an hour to go through this process. How long does it take to utilize this on a house?

Matt Hedstrom:
I want you to be in and out of that house in less than 13 minutes.

Chris Arnold:
Come one. 13 minutes.

Matt Hedstrom:
13 minutes. That’s that’s average. I don’t even want you to bring in a tape measure or a ladder in the house. So long gone are the days where you think about the advantage you have, where you walk into a house and you are instantly calculating your repair cost based on what you’re seeing. Knowing that, okay, yes, the kitchen does need to be updated. Yes. The flooring needs to be updated. So it’s a process that you walk through, you get it done and all of those things are done for you.

Chris Arnold:
I might feel a little bit pigeonholed in just checking boxes. What if something in the house is different or unique? How is your software going to help me figure that out?

Matt Hedstrom:
So we also have on, on the front end, it’s going to put you through three main elements, exterior, interior, and miscellaneous and mechanicals. That’s going to be 99% of what you’re going to do, but for the experienced investor or those who need to… Maybe you see like there’s a certain part of the soffit that needs to be done. And you can kind of guess, “Hey, there’s 10 feet of this.” On the backend there are hundreds of line items where you can go in and put exact dimensions.
You’re a checkbox system on the front end, but on the backend, you can add, “Hey, you know what, we only need to replace the flooring in the kitchen.” And that’s specifically used for more like rental properties too. But as a whole, if you’re doing a rehab or you’re in a wholesaler coming in to look at the whole house it’s easy to do, but yes, there’s a whole nother backend where you can add all kinds of miscellaneous items that are already preloaded for you.

Chris Arnold:
So you can customize it as needed. And the reason I threw that objection to you is because that’s the objection that my team threw at you when we were sizing this up for ourselves, what happens in this scenario? And you’re like, “Man, you can customize it.” And I know for my director disposition, as I talked to her, she’s like, “That’s my favorite part. I don’t feel like I’m pigeonholed into this process. It’s flexible to do what I needed to do depending on the circumstance.” Now I know another question is going to come up. It’s going to be like, okay Matt, I get it. It’s cool. But markets are different costs are different around the country. How can you build a software that’s accurate from East Coast to West Coast?

Matt Hedstrom:
Yep. Love it man. And of course I’m prepared for that question because this is the number one objection that we get all the time. And my first response to that, I kind of had to play around with this a little because I went around the country first meeting with investors all over. And most markets and I was shocked at how close everyone’s pricing was. So really my objection began… I asked, “Does a can of paint really cost any different if you buy it in LA or if you buy it in Columbus, Ohio or New York? It’s the same price.” So why does a painter, if a painter charges 25 bucks an hour, which we don’t base it on that. But in dealing with contractors all over the country and dealing with hedge fund pricing, a painter charges 25 bucks an hour, they don’t charge $800 an hour in California. It’s just that the houses are 10,000 square feet versus 1200 square feet. And that’s what it’s basing it on. So the prices are very accurate.

Chris Arnold:
Got you. So what you’re saying is it really doesn’t matter on the state I’m in this system is going to work for me. And I think that’s important. How can you create a universal system that doesn’t work universally? What I understand your vision for this thing is just like the MLS is the trusted system for ARV. Rehab Estimator Pro becomes the national trusted system for repairs.

Matt Hedstrom:
Exactly.

Chris Arnold:
And again, It’s got to work every state to be able to do that. I got another question, who is this system for? Is it for the newbie? Is it for the seasoned person who did you build this for who should be using it?

Matt Hedstrom:
Well, what we’ve found and I think this is the best. It really is a ladder. And it covers everyone. Number one, wholesaler, low barrier entry. You got all this education out there. People come in, what is the number one thing that wholesalers get ridiculed for all the time? It’s repair cost.

Chris Arnold:
We’re not very liked because of that.

Matt Hedstrom:
Right. They’ll show pictures and they’ll show a tree sticking out of the middle of the living room and they’ll say, “Ah, you know what? 5,000 in repairs only.” And it’s like, everybody laughs, but it’s true. So this is for the wholesaler to get out of the gate and charge. And now next is for that end investor that’s buying this property from that wholesaler, they can trust the wholesaler’s numbers. Next, you have your contractors in line, your contractor has to trust what you’re doing. You’re not bringing your general contractor to every single deal you’re looking at. That doesn’t work. So and then what about your private money lender, your hard money lender. If you’re using a system that everybody trusts, even your contractor, your lender doesn’t have to go figure out if your repairs are on or off. So it really is for everybody.

Chris Arnold:
And I think what you just said is important and it’s that ability to generate trust. And so let’s go the lender route because I think that’s an important one. I want to rehab a property unless I’ve got the cash to do that, I’m going to need to go get private lending or to a hard money lender. And how am I going to walk in there and present that potential deal. Again, the lender is going to do their due diligence, but if I’ve got a nice software system that looks sophisticated, which it is and shows this level of professionalism. I think that lender’s going to take me a bit more seriously than the other person that just submits the regular type of paperwork. And I can tell you with a private lender because I’ve raised a lot of private money. That’s a different person. And so they definitely want a better presentation in the beginning before they build that relationship to trust you. Agreed.

Matt Hedstrom:
You nailed it because here’s what we do when we get into our private money lenders. And there’s so much money around right now. It’s yes. Even with comps, you’re trying to tell a story. You’re trying to give them something and trying to get them to lend to you. So you can even do live Zoom on the MLS and show them. Instead of just giving them the comps you want them to see. Well, it’s the same thing for the repair cost. This breaks down an entire scope of work besides, just giving you a number. It breaks down an entire scope. Plus gives you a one page contract. So you’re able to deliver an entire scope of work with numbers besides each itemized line right to your lender. And again, it’s a great word, man. Trust.

Chris Arnold:
Agreed. Now you were talking about some advantages of utilizing this program along with your contractors. Will you talk a little bit about that?

Matt Hedstrom:
Yeah. Here’s the thing I love using this as a tool. Let’s take the newbie, who’s even nervous about meeting with contractors, and contractors are always trying to take advantage of us. What a great way to sit down and take him out to lunch and say, “Hey, you know what? I’ve got this national pricing tool. I need to go over this with you.” Let’s just go through maybe you can bring a couple of houses you just did. And we can go through the numbers and work, just see if we’re close. And it works all the time. Number one, it helps you develop relationship and number two, it’s so easy.
It takes seconds to change that pricing as well. Let’s say your guy says, “Well, you know what? Yeah, your paint says 3,500 on here. You’re at about $2 and 50 cents a square foot. But you know, I actually get it done for about $2 and 40 cents a square foot, my numbers are a little lower.” You can just go and change your parameters, which changes it for your entire system and take the numbers that maybe you and your contractor or decide on.

Chris Arnold:
Yeah. I love what you just said about that. And particularly for someone that’s new, because I know that feeling when I was first walking through deals myself in the beginning. You sit with that contractor you know you’re outgunned. That cat’s been doing contracting work for 15, 20 years. He knows how to manipulate it. So this, in my opinion, I love what you said is a little bit of a guard for yourself to make sure that I’m not being taken advantage of. And I think gains the respect of the contractor as well.

Matt Hedstrom:
Oh, for sure it does.

Chris Arnold:
I’m sure they get frustrated with investors as well going, “This guy doesn’t know or this guy doesn’t know what they’re talking about.” Now. I want to transition to this last part, which I think is really important. The reason that we got so excited about it outside of all the reasons we just said, those were strong enough for us to pull the trigger. But this was the cherry on top is the fact that based on what’s happening, everything needs to be done virtually. I’ve talked and I’ve done some videos on how you can deal directly with the seller virtually and maintain social distancing with the back side cash investor. And then we looked at this tool and we said, “You know what? This is prime time. The environment we’re in right now is for the best use of this tool.” So if I’m listening, I’m like, okay, how can this tool help me with the current situation that’s going on and the need to stay virtual, walk us some of those applications.

Matt Hedstrom:
Well, funny, you bring that up because that is something that as everybody’s shifting to that and focusing on that right now, we’ve been doing that for a couple of years now. Where picture this Chris and I know this is a listening audience. So imagine having a dual screen up. Let’s just say, all you have access to is Zillow and you pull up a Zillow listing and you’ve got all these pictures, it’s for sale by owner. And you’ve got all these pictures that have been posted. You can take on your other screen, have REP up and just go through and hit the check boxes. “Yep. Looks like it needs a roof. Yep. It looks like it needs some landscaping. It needs to be painted flooring, blah, blah, blah.” And now as you’re going through that, you come up with an entire scope of work.
You come up with a cash offer, two other offers as seller finance. And you’re able to push that contract and email it right from the system to that either the homeowner or the agent. And so you can send offers all day long, right from your office. You can even have a seller. We just did this yesterday, we had a seller send us a video of them since nobody wants you to come to their house at this moment, they went through and they took a live video. Walked through the entire house, showed us every room. And we sent an offer immediately, right by email.

Chris Arnold:
So you’re saying you can pull the video up, pull up Rehab Estimator Pro, and then just watch the video and fill it out in real time. And boom, you know exactly what the repair amounts going to be. And then shoot an offer from the system.

Matt Hedstrom:
And shoot an offer out to them. Yep.

Chris Arnold:
That’s about as virtual as it gets right there. And so that’s why we’re all over it because it’s speeding up our process because we’re doing everything right now via video. Our house inspector can not go into the house like he normally does. And so he can now do the same process utilizing the software. And of course that’s why we got so excited about it because we’re like this is extremely applicable for us right now. I know a question everybody’s asking is about cost and so forth. And where do I go to find more? One of the things you did was really cool yesterday when I was talking to you about this. And if you don’t know Matt Hedstrom, I’m just going to let you know, guy has the biggest heart.
I’m not even going to embarrass you with everything I know on your giving, but dude, you’re one of the most generous guys I know. And right now what you’ve got set up, you’re doing like a promo where you can get 70% off of the monthly cost. This isn’t like for one month, this is longterm that it’s 70% off. So if somebody wants to find out more, “What’s the promo code? I’m all over this. Give me my 70% discount I’m in.” Where do they go? And then how does that work?

Matt Hedstrom:
You can go to rehabestimatorpro or reiestimatorpro.com and then make sure that when you hit register that you put in the coupon code, REIRADIO, and that will get you down for your listeners to less than $30 month.

Chris Arnold:
Perfect. So the website again is?

Matt Hedstrom:
rehabestimatorpro.com.

Chris Arnold:
And of course, as he said, the promo code and he did this for REI Radio, which we appreciate, we first shared it with our community and our students is REIRADIO, of course, is that promo code. So I love it. I love it. And of course, if you’re listening and Matt you know I do this as well. You’ve been processing the idea of advertising on the radio, I just want to tell you one thing before we drop off. The radio stations have more than softened. They are losing advertisers right now, before you would go in, they might be a little bit cocky about their inventory. Maybe try to play like, “Hey, we don’t really need your advertising dollars.” I’m talking to our students right now. And they’re like, “I called the same rat back from two weeks ago. That totally ignored me. And he like agreed right on the phone to my pricing.”
So this is the time to get rock bottom pricing on radio. Plus they’re throwing at our students free stuff. We had one student who was like, “I’ll give you that price and I’ll tell you what else I’ll do. I’ll give you free spots on another radio station that we have free.” They’re just giving away free stuff because, honestly, they’re in trouble because the inventory’s low. So if you’ve been listening, you guys know we coach on radio. In all my years I’ve never seen radio stations respond like this. So if you’re interested in that, go to wholesalinginc.com/reiradio, wholesalinginc.com/reiradio and book a call. Make sure your market’s open because now more markets are actually starting to go faster because people realize it’s a great time to do radio.
Matt, thank you so much. Thank you personally, from me from my team, I was actually just talking with my COO today and she was talking, literally, I’m on a group text about additions and things that we’re using your app for right now. So I appreciate it, man. It’s a great tool for us. So thank you so much.

Matt Hedstrom:
Thanks brother. Thanks for having me on.

Chris Arnold:
All right. We’ll talk to you guys later.

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