Posted on: August 26, 2020

Determining the accurate repair cost of a home is something many wholesalers struggle with. This is especially true among those who are new in the business. Fortunately, there’s a technology that can help you determine a home’s cost in under 13 minutes and you’ll learn all about it in today’s show!

Today’s amazing guest is Matt Hedstrom, a computer software engineer who joined the real estate space way back in 2002. Since then, Matt has rehabbed over a thousand houses and has completed over 100 transactions. Using his computer software background and his extensive real estate experience, he created Rehab Estimator Pro.

If you want to learn about a technology that will be a total game-changer for your business, this is one episode you can’t miss!

Key Takeaways

  • Two things you can’t mess up
  • What Rehab Estimator Pro does aside from helping users save time
  • Why building a community is very important
  • What he’s seeing in terms of accuracy and trust
  • What he sees in terms of consolidation
  • How Rehab Estimator Pro increases revenue
  • Promo code for the listeners
  • Where people can go and sign up

RESOURCES:

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Episode Transcription

Chris Arnold:
Welcome to the Wholesaling Inc. podcast. I’m your host, Chris Arnold. Glad that you’re joining us today. Man, we’re going to have a tech talk today. If you’re like me, we talk a lot about strategies, how to find deals and so forth. But here’s the thing. When you have a deal, one of the most important things is how you process that deal from a system standpoint, really utilizing technology to make sure that you’re maximizing each deal and getting the most out of it. My team and myself, we’re always on the hunt. We’re always looking for technology that’s going to help us make more money and make our lives simpler. I see a lot of stuff out there and honestly, a lot of stuff, I just turn away and going, “Eh, it’s not really going to work that well.”
But one of the things, and maybe you’ve heard me talk a little bit about it before that I think’s an absolute game changer, is Rehab Estimator Pro. I believe that it’s going to become the industry standard. I believe that things you see, like a QuickBooks that everyone just naturally gravitates and begins to use, I really believe that you’re going to see that with Rehab Estimator Pro. Just like the Multiple Listing Service. It just becomes a standard that everyone gets comfortable using and agrees that this is what needs to be utilized. I’ll tell you just straight up, the fact that this thing costs $29.99 a month, I’m just coming out and saying in the beginning, is a no brainer because we’re talking about a system that is going to allow you to accurately determine the repairs on a house, which no one talks about.
I have my guest today, Matt Hedstrom, a buddy of mine, also the founder, of course, of Rehab Estimator Pro. So Matt, glad to have you on today. You and I were just talking about someone out in the industry, right, that’s kind of a guru and when they got to the part of really educating the public on, here’s how you determine the repair value, what did they say? Give us a… What was the coaching, which I laugh at, because this happens again and again? How did they express that?

Matt Hedstrom:
Yeah, man, I don’t get that and thanks for having me again, man. It’s so good to see you.

Chris Arnold:
Yeah. Glad you’re on.

Matt Hedstrom:
I was shocked because it is somebody that I’ve bought several courses from myself. I continue to network with people like this and when they throw out… Again, we’ve talked about this many times, the two things you can’t screw up, right? ARV and repair costs. So everybody wants to dive deep and go into ARV and it’s very teachable, right? It’s coachable. This is how you find comps. Whatever you’re using. You can use… There’s great programs outside of the MLS even. But when it comes to repairs and they just say, “Oh yeah, here’s one page quick. Just throw 30 to 40 bucks a square foot at it and that should cover it.” Wait a second. What? so I should assume every house is the same and needs…

Chris Arnold:
It’s this napkin math approach, and I’m laughing because when I got in as well, one of the challenges I had, Matt, is I was getting educated via coaching on how to find deals. I was getting educated on how to run comps. But by the time I got over to the repair side of doing a rehab or evaluating a deal, it’s just like everyone just patted you on the butt and said, “Well, you can figure that out when you get out there.” And I’m like, “This seems to me the most complicated part. Why are we not spending more time getting educated?” So if you’re tuning in, here’s what you’re going to get today. We are talking about a piece of technology that’s going to allow you to accurately determine the repairs on a house in less than 13 minutes. That’s valuable, the accuracy and the efficiency of time.
Particularly if you’re tuning in and you’re new and you’re just learning how to evaluate deals, this is a piece of technology that, in my opinion, is an absolute no brainer. So Matt, let’s hop in today. We’re going to hit on maybe four or five points today about Rehab Estimator Pro. If you haven’t heard about it, it’s time to tune in. If you’ve heard about it before, we’re going to give you some new angles and details to consider that you might not have thought of. So let’s talk about Rehab Estimator Pro from the sense of being a tool and being able to start without extensive training. Because Matt, when I think about having to figure out how to be, let’s say a contractor type mindset or an inspector that can go in and figure out repairs, that seems like a lot of training to be able to get a level to be able to evaluate and estimate repairs. What does Rehab Estimator Pro do in the sense of saving time on training?

Matt Hedstrom:
That’s great, man. That’s a great question because it is almost insulting, in a sense. You even said, you get this pat on the butt. It’s like, “Okay, great. You’re ready. Get out there.” And you get into a house and go, “Oh my gosh. I have no idea what to do,” in this sense. I’ve got over 23 years as a general contractor as well and licensed in several states. This is something that I’m giving you that says you don’t need any of the training. I’ve taken all the last 23 years of experience and I’ve put it all in here. So right out of the box, this is plug and play. You just go in and check the boxes and trust the numbers. That’s what this comes down to. So it is a tool, like you said. We all have to pick the tools we’re using and this is one that you just can’t ignore. You have to have something that works, as well. This is something that doesn’t require that training to jump in and take a class.

Chris Arnold:
I love this because what you’re doing is you have utilized technology to take the experience that’s in your brain and almost, and I’ll say it, create a dummy proof system. I’ll say that that works for me because I can’t even hammer a nail. I’ll admit it. If it requires the use of my hands, I outsource it. Bottom line. I’m just not that guy. What I love is, it’s like walking into an appointment or into a house and having Matt Hedstrom with 23 years experience right next to you.

Matt Hedstrom:
Right.

Chris Arnold:
Because that’s what the technology is. It’s like the system is reminding you, “Did you check this? Did you look for this? If you click that button, it’s going to cost this.” It’s like you’re walking in, not alone anymore, but with all the experience of what you are as a sophisticated contractor and your ability to do that. That’s why I think I love tech, and I think that’s a good way to look at Rehab Estimator Pro.

Matt Hedstrom:
That’s a great approach because I’ve had a lot of your users, too, that have recently utilized our Facebook group and also our support system because it comes right to me. So they’ll get in and say, “Man, this is a great tool. I’ve been using it, but I have a full gut situation. I know you have a full gut bar on here, a box to check, but man, I’m a little nervous about this.” Man, I’ll get on the phone. I’ll jump on Facebook. I’ll do whatever and we’ll walk through it and talk through it. That part I still love because it allows me to be that consultant still, in essence, in that and bring more experience to the table. So we’re there for you.

Chris Arnold:
I think that’s valuable. If you’re listening, community’s so important. You might be listening and be a part of the tribe. But I love also, Matt, and I think this is important when someone launches technology to also launch the opportunity for community, like a private Facebook group, so when someone bumps into challenges on a deal, not only can they utilize the technology you’ve created, but for no additional cost they can then reach out to a community and maybe ask some questions to get a better understanding of a unique circumstance and so forth. So I think it’s super cool that you provide community. So let’s talk about the next thing, the idea of saving time and more importantly, guarding against mistakes. How is Rehab Estimator Pro doing this and how much time and money do you think that this is saving based on your experience with the amount of people that are using it now?

Matt Hedstrom:
For you to be able to get in and accurately get a number without having the experience of making the mistakes, right, for you to get that take down number fast and trust it, is huge. Think of the time… I’ve actually had people tell me that they want to just go estimate. They even want to just, even if they’re wholesaling, they want to do one flip just to make all the mistakes so that they can learn. They’d rather lose money on the first deal, just for the experience. And I said, “Well, that’s the dumbest thing I’ve ever heard. Why would you do that?” And here’s the thing. Every house is different. We know that. Every single house.
So you can take guys that have 10 accounts. They’ve got 10 acquisition guys running around with Rehab Estimator Pro, right? Every single one of those is different as far as what they’re bringing. You can take one guy that’s doing one house a year, okay? They’re trusting the numbers. But every single house that they get into is going to be different. It’s going to be a different experience. And even those guys with 10 acquisition agents, okay? They have things that they find new in every single house because they’re just not the same.
So this is going to eliminate those big mistakes because it’s forcing you to look at a checkbox system, a checklist also, to say, “Okay, let’s make sure I got this, this, this, and this.” Make sure I laid eyes on it, right, and at least looked at it. So you’re going to save, it’s incalculable really, all the mistakes that can be avoided by using this [crosstalk 00:09:49].

Chris Arnold:
I love that perspective because let me repeat what you said, which I think is important. People are saying to you, “I’m going to learn how to accurately evaluate a property through mistake making.”

Matt Hedstrom:
Right.

Chris Arnold:
But again, I get it. It’s that ail forward mentality. You got to make some failures. You learn most from your failures. You’re challenging that, and I am too. That is true in some contexts, but in the other context of having a software and utilizing technology so that you’re not required to learn through mistakes, but to actually learn through a piece of software, I’d rather use the software and save the money and the heartache then go the route of, “I got to get some lumps on my head in order for me to really learn how to do this.” So again, this is why I think technology’s super valuable, but it’s a great point. I think it is a way that people think, “I’m just going to fail my way there.” That’s good if you have to, but in this case we’re telling you it’s not necessary when it comes to-

Matt Hedstrom:
Especially in this business, right, Chris? That could cost you. You’ll be one and done.

Chris Arnold:
Yeah, absolutely. It can cost you a lot. No reason to make a 10, $20,000 mistake if you don’t have to. So let’s talk about accuracy and trust. What are we seeing here now with Rehab Estimator Pro both in the sense of accuracy for myself, trust in myself, as well as externally, maybe with people that I’m working with, like cash buyers or someone that’s coming in, maybe to rehab my house as a contractor, et cetera? What are we seeing there?

Matt Hedstrom:
The one part that, of course being the owner of it and developing it, I’ll be vulnerable and say, man, that’s always like, I trust that it’s working for people. I just got to hear it. I got to hear it. I don’t want to… We have not heard any bad stories yet. We’ve just got one yesterday that came in that they did… I won’t name names. It was a big guy. He’s operating out of Minnesota and it was him and his son that went in. Now, he’s been doing this for 40 years. He’s a guy who can walk into a house and know in his head what it’s going to cost. So he did a little challenge with his son who is getting into the business. Brought Rehab Estimator Pro. This guy is a desk guy. He doesn’t have dad’s experience.
So they did a little challenge. And I just heard about this. I didn’t know it was going on. Dad came up with, and of course it’s always a round number, right? It was $150,000. So obviously a big rehab, okay? 150 grand that dad came up with. Son came in. Rehab Estimator Pro, in less than 15 minutes, it was off by $150, okay? So for these repairs. So again, I love hearing those stories because we hear them so often. You have to be able to trust those numbers and the accuracy of them in order to get a take down number that you’re going to actually go buy a house for. That’s what we’re going after. So I love the fact that you can trust it.

Chris Arnold:
That’s a great analogy. What I’ll say is, I think we as a culture, and particularly where we are in the development of technology as a whole, are really beginning to understand that in a lot of ways, technology is more accurate and more dependable now than the human. That wasn’t the case 50 years ago. Maybe you might even argue that 25 years ago. But the reality is the world is changing and the more we’re going to rely on technology, because we realize that it outperforms the human mind. The human is more fallible. The technology is not. I think that’s a great example of dad with all the experience going head to head with the son who doesn’t have any, right? it’s like the first time that tech beat the champion chess player, right?

Matt Hedstrom:
Right. Right.

Chris Arnold:
You know what I’m saying? It’s like, “Wow, okay.” So now tech is moving beyond what humans can do. I think a lot of this is just shifting with the mindset and really getting into the understanding of the 21st Century on this. So let’s talk about the fact of one system, this idea that you can use one tool to get what you need versus different ones. What are we seeing here in a sense of potentially consolidation?

Matt Hedstrom:
Again, we love to focus on the fact that, hey, we’re always drilling down on the numbers in accuracy and adding things. Adding things that even users are suggesting. “Hey, I’m running into a lot of casement windows versus double hungs. Hey, great. I’m going to add a piece on the back end to this.” But we hyperfocus on that, but we have an entire system, right? Again, no training, because you can put an address in, get comps, choose which comps you want to use. It gives you a suggested ARV based on Zillow comps. Then it also does a suggested, based on square footage, pricing from sold comps on Zillow. So it’s giving you multiple passes, but it’s also asking you to do your own due diligence, right, on that. So you now have an ARV to work with. You can adjust that up or down.
It also gives you different areas of the country if you want to adjust that number up and down, on a multiplier that we talked about on the last show. So you now have an ARV to work with that you can scroll around with a little bit, but then now you have the repair costs, which are the guts of the system, but then it’s also spinning out an entire scope of work that you can print out for your contractors and your seller, whoever it is, or to the investor, with itemized pricing or without. You can choose. And then also gives you three offers. So you have now entire, from ARV to offer, it’s all there. It’s right at your fingertips.

Chris Arnold:
Mm. So what I hear is you’re killing multiple birds, right, with one stone here, with this piece of technology. So make sure you heard that, if you’re listening. Not only is Rehab Estimator Pro helping you do something that no other tech is doing, which is to figure out what the repair amount is on the house, it’s actually helping you figure out the after repair value, the actual comp process from an automated standpoint. So if you’re tuning in, it’s like, “Wow, I can have a system that can do both of those things? And on top of that, spit out an itemized list of work and so forth that needs to be done so that when I’m working with the contractor, et cetera, we’re on the same page about the scope of work that needs to be done.”
So what I hear is happening, which I think is cool with Rehab Estimator Pro is, you’re keeping the focus on what it needs to be, but you are adding on, very strategically, a few bells and whistles that you realized are just super valuable to add in there. So now someone can come in and, with one system, get more than just one benefit.

Matt Hedstrom:
Yeah. Yeah. You got it, man. I’ll be releasing with you next time, for the first time ever. We’ve been really working on some deep code on some more offer strategies.

Chris Arnold:
I like it.

Matt Hedstrom:
So I am really getting deep on that.

Chris Arnold:
Can you tell me I’m going to be the first to hear?

Matt Hedstrom:
Yup. You got it, man. Yup.

Chris Arnold:
I love it, man. Lastly, this is a contact sport, particularly right now with the current environment. It’s about making offers. Getting offers out there in front of sellers, right. The potential, a lot of times, the more offers you can get out there. Again, this is based on statistics. This is based on conversion and probabilities. How does Rehab Estimator Pro increase revenue, because it’s helping us as investors get out and make more offers because we’re doing it more efficiently and effectively?

Matt Hedstrom:
Yep. That’s a great question too, man. Because I look at it like, even in the times we’re living in, I mean, if somebody is listening to this in 2035, they’re going to ask you, “Hey, what in the world was going on? Schools closed and it’s getting pretty crazy out there, right?” So you can do these offers right from your office. If you pull up For Sale By Owners, whatever, realtor.com, Redfin, Zillow, you can go through pictures and send a cash offer right to the realtor listed on that screen, okay? But like you were saying before, I mean, you’re getting out offers. If you’re not sending offers, are you an investor, in that sense? You have to make offers to be an investor in this business. So with this, it’s not just the process of, “Okay, I’ve got this tool. I’ve got this system. I’m going to go out and meet with the homeowner.”
This is something that, if we go back to dad and son, right, the story we just talked about, that analogy, dad can’t scale his business with the knowledge in his head, okay? But he can now hire 10 people to go out and make offers all day long, trusting the numbers that he’s verified himself on this tool, right? So he now can scale his business with his son and beyond, and that’s probably where his son will take it. So how many offers now can you put out by actually going online and looking at properties, going out and meeting with people, having them send you videos in of their house? We just did that, where they send a video of your house as a walkthrough and I can accurately estimate it with this tool online, send you the offer and get it closed.

Chris Arnold:
I think that’s a huge point, because I’m going to tell you why I know this is true. We hired an in-house inspector for us, that’s still with us now. Does our inspections in-house. Also is kind of a courier, just our boots on the ground person. I never told you this. We hired him before we actually ever came across Rehab Estimator Pro. At the time, my business partner was the one who understood repairs. I didn’t. The guy that we brought in was not technically an inspector, but we wanted to raise him up to be. So guess what the process was to reduplicate my business partner’s knowledge in his brain into the new inspector? Shadowing. “You can come shadow me and take notes.” Again, it took a long time because it was just that manual transfer of, “Here’s what’s in my brain. Let me put it in yours.”
When I look back on that now and just connecting the dots, you’re talking about the ability to bring on someone and immediately get them out there because of the tech and getting them out there and actually delegating this aspect to them, whether it’s an acquisition manager, whether it’s someone that’s managing your repairs or your rehabs, et cetera. I mean, that’s what makes this thing so scalable is, I’ll use the word, you can reduplicate your process faster.

Matt Hedstrom:
That’s great.

Chris Arnold:
That is what you’re driving home is, you’re going to do more business when you have more people that understand how to evaluate deals and get offers. So it’s not just you that has the specialized knowledge that doesn’t trust anyone else to do it because you don’t think anyone can do it as good as you can. And they can’t, possibly, if they don’t have the technology

Matt Hedstrom:
That’s a great point, man. Yep.

Chris Arnold:
Yeah. It’s spot on. Spot on. So if you’re tuning in, Matt, again, everyone always asks if I’m ever liking a piece of technology, they want to get me to get in and get some type of discount. I’m just learning [inaudible 00:20:31] everyone was like, “Chris, what kind of deal can you get me on that?” So I know on your website and traditionally this costs how much per month?

Matt Hedstrom:
97 bucks a month.

Chris Arnold:
Yeah. But you’ve got a promo code that you allow us to create that give 70% off. Is that for the first month, second month? How long is the 70% off?

Matt Hedstrom:
That’s lifetime, baby.

Chris Arnold:
Lifetime. That’s what I’m talking about. So that drops it down to $29.99 a month, right? Something like that?

Matt Hedstrom:
Yup.

Chris Arnold:
Yeah. For a lifetime. So Matt, where do they go and what is the promo code if they’re like, “You know what? This is a no brainer for 30 bucks?” And it is. I’m laughing at the pricing because you’ve created something that saves so much money and is so valuable because it’s minimizing mistakes. That’s the big thing. It’s minimizing mistakes which cost them money. So if I can minimize my mistakes for 30 bucks a month, I just laugh because that’s what I call a no brainer. So how do they find this thing?

Matt Hedstrom:
Just go right to rehabestimatorpro.com. When you go to sign up, you can actually click on a code that you can use. It’ll say coupon code right on there, and it is REI Radio. You’ll get that discount code. as soon as that’s in, it’ll reflect the pricing change and sign up.

Chris Arnold:
Cool. So rehabestimatorpro.com, promo code REI Radio gets you that 70% off for a lifetime, which is a heck of a deal, Matt. So I really appreciate you allowing me to offer that. You’re making me look good to everyone, honest, because that’s your company.

Matt Hedstrom:
Right. That’s our goal. That’s our goal. Honestly, man, I love it. You’re a great interviewer. You do draw things out and make great conclusions. I did want to set out in the beginning to make this easy enough to just send my bookkeeper out in the field and that was a big challenge, but we did it.

Chris Arnold:
Yeah. Leadership is the ability to reduplicate yourself at a really efficient level. It’s always about reproducing, right? I mean, in every facet, and so you’re allowing us to do that via this tech. Man, I wish, honestly, I had this years ago because for me, I’m just admitting, repairs are a weakness of mine. People are wired. For you? Man, that’s your gift, right? I mean, you do this all over the world and travel and build things in foreign countries, et cetera, as a ministry. I’m the guy that would tag along and go, “Man, just tell me where to move the bricks from one place to another,” because that’s about all I can do.

Matt Hedstrom:
But we need that guy. We need you.

Chris Arnold:
[crosstalk 00:22:54] that guy. You got to tell that guy you need him so he doesn’t feel so bad.

Matt Hedstrom:
Right.

Chris Arnold:
So anyway, thanks for tuning in. Matt, I appreciate it. Thanks so much for scratching an itch that we all have. To the rest of you, we will catch you soon and we will see you next time when we add more value. Talk to you later.

Matt Hedstrom:
Love it. Thanks man. See you later.

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