Posted on: August 26, 2020
WI 501 | Home Repair Costs

 

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!

How To Accurately Determine A Home’s Repair Costs In Under 13 Minutes With Matt Hedstrom

Episode Transcription

We are going to have a tech talk. If you are like me, we talk a lot about strategies, how to find deals, and so forth. 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, utilizing technology to make sure that you are maximizing each deal and getting the most out of it. My team and I are always on the hunt. We are 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 turn away and go, “It’s not going to work that well.”

One of the things, and maybe you have heard me talk a little bit about it before that’s an absolute game-changer, is Rehab Estimator Pro. It’s going to become the industry standard. Things you see like QuickBooks that everyone naturally gravitates and begins to use, you are going to see that with Rehab Estimator Pro. It’s just like how the Multiple Listing Service becomes a standard that everyone gets comfortable using and agrees that this is what needs to be utilized.

I will tell you straight up, the fact that this thing costs $29.99 a month, I’m coming out and saying in the beginning, is a no brainer because we are talking about a system that is going to allow you to accurately determine the repairs on the house, which no one talks about. I have my guest, Matt Hedstrom, a buddy of mine, also the Founder of Rehab Estimator Pro.

Matt, glad to have you on. You and I talked about someone out in the industry that’s a guru. When they’ve got to the part of educating the public on, “Here’s how you determine the repair value,” what did they say? What was the coaching, which I laugh at because this happens again and again? How did they express that?

WI 501 | Home Repair Costs

Home Repair Costs: We all have to pick the tools we are using, and this is one that you can’t ignore. This is something that doesn’t require training to jump in and take a class.

 

I don’t get that, and thanks for having me again. It’s so good to see you. I was shocked because it is somebody that I have bought several courses from myself. I continue to network with people like this. We have talked about this many times, the two things you can’t screw up. ARV and repair costs. Everybody wants to dive deep and go into ARV, and it’s teachable and coachable. This is how you find comps, whatever you are using. There are great programs outside of the MLS even but when it comes to repairs, they say, “Here’s one page quick. Throw $30 to $40 a square foot at it and that should cover it.” What? I should assume every house is the same.

It’s this napkin math approach, and I’m laughing because when I’ve got in as well, one of the challenges I had was I was getting educated via coaching on how to find deals. I was getting educated on how to run comps. By the time I’ve got over to the repair side of doing rehab or evaluating a deal, everyone patted you on the butt and said, “You can figure that out when you get out there.” I’m like, “To me, this seems to be the most complicated part.” Why are we not spending more time getting educated?

If you are reading, here’s what you are going to get on this episode. We are talking about a piece of technology that’s going to allow you to accurately determine the repairs on the house in less than thirteen minutes. That’s valuable, the accuracy and the efficiency of time. Particularly if you are reading, you are new, and learning how to evaluate deals, this is a piece of technology that, in my opinion, is an absolute no-brainer.

Matt, let’s hop in. We are going to hit on maybe 4 or 5 points about Rehab Estimator Pro. If you haven’t heard about it, it’s time to pay attention. If you have heard about it before, we are going to give you some new angles and details to consider that you might not have thought of. Let’s talk about Rehab Estimator Pro from the sense of being a tool and starting without extensive training. When about having to figure out how to be a contractor type mindset or an inspector that can go in and figure out repairs, that seems a lot of training to get a level to evaluate and estimate repairs. What does Rehab Estimator Pro do in the sense of saving time on training?

It is almost insulting, in a sense. You even said, “You get this pat on the butt. Great. You are ready. Get out there.” You get into a house and go, “I have no idea what to do, in this sense.” I’ve got many years as a general contractor as well and I am licensed in several states. This is something that I’m giving you that says you don’t need any of the training.

I have taken all the years of experience and put it all in here. Right out of the box, this is plug-and-play. You go in and check the boxes and trust the numbers. That’s what this comes down to. It is a tool like you said. We all have to pick the tools we are using and this is one that you can’t ignore. You have to have something that works, as well. This is something that doesn’t require training to jump in and take a class.

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

It’s the system that is reminding you, “Did you check this? Did you look for this? If you click that button, it’s going to cost this.” You are 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 love tech, and that’s a good way to look at Rehab Estimator Pro.

The two things you can’t screw up: ARV and repair costs.

That’s a great approach because I have had a lot of your users, too, that have utilized our Facebook Group and also our support system because it comes right to me. They will get in and say, “This is a great tool. I have 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 I’m a little nervous about this.” I will get on the phone, I will jump on Facebook, and I will do whatever. We will 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 are there for you.

That’s valuable. The community is so important. You might be reading and a part of the tribe. It’s important when someone launches technology to also launch the opportunity for the community like a private Facebook Group. When someone bumps into challenges on a deal, not only can they utilize the technology you have created but for no additional cost, they can then reach out to a community.

They can maybe ask some questions to get a better understanding of a unique circumstance so forth. It’s super cool that you provide the community. 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 number of people that are using it now?

For you to be able to get in and accurately get a number without having the experience of making the mistakes, to get that takedown number fast and trust, it is huge. I have had people tell me that they want to go estimate. Even if they are wholesaling, they want to do one flip to make all the mistakes so they can learn. They would rather lose money on the first deal for the experience and I said, “That’s the dumbest thing I have ever heard. Why would you do that?” Here’s the thing, every single house is different. We know that. You can take guys that have ten accounts. They’ve got ten acquisition guys running around with Rehab Estimator Pro. Every single one of those is different as far as what they are bringing.

You can take one guy that’s doing one house a year. They are 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 ten acquisition agents, have things that they find new in every single house because they are not the same. This is going to eliminate those big mistakes because it’s forcing you to look at a checkbox system, a checklist also, to say, “Let’s make sure I’ve got this and this.” I made sure that I laid eyes on it and at least looked at it. It’s incalculable to all the mistakes that can be avoided by using this system.

I love that perspective. Let me repeat what you said, which is important. People are saying to you, “I’m going to learn how to accurately evaluate a property through mistake making.” I get it. It’s that fail-forward mentality. You’ve got to make some failures. You learn most from your failures. You are challenging that, and I am, too. That is true in some contexts but in the other context of having software and utilizing technology, you are not required to learn through mistakes but to learn through a piece of software.

I would rather use the software and save the money and the heartache than go the route of, “I’ve got to get some lumps on my head for me to learn how to do this.” This is why technology’s super valuable but it’s a great point. It is a way that people think, “I’m going to fail my way there.” That’s good if you have to but in this case, we are telling you it’s not necessary when it comes to this business.

That could cost you. You will be one and done.

WI 501 | Home Repair Costs

Home Repair Costs: You have to trust those numbers and their accuracy to get a takedown number that you are going to buy a house for.

 

No reason to make a $10,000, $20,000 mistake if you don’t have to. 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, cash buyers or someone that’s coming in maybe to rehab my house as a contractor?

The one part that, being the owner of it and developing it, I will be vulnerable and say, “I trust that it’s working for people. I’ve got to hear it.” We have not heard any bad stories yet. We’ve got one that came in. 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. He has been doing this for over 40 years. He’s a guy who can walk into a house and know in his head what it’s going to cost.

He did a little challenge with his son, who is getting into the business. He brought Rehab Estimator Pro. This guy is a desk guy. He doesn’t have his dad’s experience. They did a little challenge. I heard about this. I didn’t know it was going on. Dad came up with, and of course, it’s always a round number, $150,000, so a big rehab. The son came in with Rehab Estimator Pro. In less than fifteen minutes, it was off by $150 for these repairs. I love hearing those stories because we hear them so often. You have to trust those numbers and their accuracy to get a takedown number that you are going to buy a house for. That’s what we are going after, so I love the fact that you can trust it.

That’s a great analogy. We as a culture, and particularly where we are in the development of technology as a whole, are beginning to understand that in a lot of ways, technology is more accurate and dependable now than a human. That wasn’t the case many years ago. The reality is the world is changing, and the more that we are going to rely on technology because we realize that it outperforms the human mind, the human is more fallible. The technology is not. That’s a great example of the dad with all the experience going head to head with the son who doesn’t have any. It’s the first time that tech beat the champion chess player.

It’s amazing. Tech is moving beyond what humans can do. A lot of this is shifting with the mindset and getting into the understanding of the 21st Century on this. 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 do we see here in the sense of potential consolidation?

We love to focus on the fact that we are always drilling down on the numbers in accuracy and adding things. Adding things that even users are suggesting like, “I’m running into a lot of casement windows versus double-hung. I’m going to add a piece on the back end to this.” We hyperfocus on that but we have an entire system. 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. It also does a suggestion based on square footage, pricing from sold comps on Zillow.

It’s giving you multiple passes but it’s also asking you to do your due diligence on that. 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. 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. It’s also spinning out an entire scope of work that you can print out for your contractors and seller, whoever it is, or to the investor, with itemized pricing or without, you can choose, and it also gives you three offers. You now have an entire from ARV to offer. It’s all there. It’s right at your fingertips.

You are killing multiple birds with one stone here with this piece of technology. Make sure you understand that. 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 but it’s also helping you figure out the after repair value, the actual comp process from an automated standpoint.

It’s like, “I can have a system that can do both of those things. On top of that, spit out an itemized list of work so forth that needs to be done so when I’m working with the contractor, we are on the same page about the scope of work that needs to be done.” What I hear is happening, which is cool with Rehab Estimator Pro is, you are keeping the focus on what it needs to be but you are adding on, strategically, a few bells and whistles that you realized are super valuable to add in there. Now someone can come in and with one system and get more than one benefit.

Rehab Estimator Pro is going to eliminate those big mistakes because it’s forcing you to look at a checkbox system.

You’ve got it. I will be releasing it with you next time. For the first time, we have been working on some deep code on some more offer strategies.

Lastly, this is a contact sport, particularly now with the environment. It’s about making offers and getting offers out there in front of sellers. Potentially, a lot of times, the more offers you can get out there are based on statistics, 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 are doing it more efficiently and effectively?

I look at it even in the times we are living in. If somebody is reading this in 2035, they are going to ask you, “What in the world was going on?” Schools are closed, and it’s getting pretty crazy out there. You can do these offers right from your office if you pull up For Sale By Owner, Realtor.com, Redfin, Zillow. You can go through pictures and send a cash offer right to the realtor listed on that screen but you are getting out offers. If you are not sending offers, are you an investor in that sense? You have to make offers to be an investor in this business. With this, it’s not the process of, “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, the story we talked about, that analogy. Dad can’t scale his business with the knowledge in his head but he can now hire ten people to go out and make offers all day long, trusting the numbers that he’s verified himself on this tool. He now can scale his business with his son and beyond.

That’s probably where his son will take it. How many offers now can you put? It’s either by going online and looking at properties, going out and meeting with people, having them send you videos of their house. We did that. You 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.

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, who is still with us now and is also a courier, our boots on the ground person. I never told you this. We hired him before we 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. Guess what the process was to reduplicate my business partner’s knowledge in his brain into the new inspector? Shadowing. It’s like, “You can come to shadow me and take notes.” It took a long time because it was 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 connect the dots, you are talking about the ability to bring on someone and immediately get them out there because of the tech and delegating this aspect to them, whether it’s an acquisition manager, someone that’s managing your repairs or rehabs. That’s what makes this thing so scalable. You can reduplicate your process faster.

What you are driving home is, you are going to do more business when you have more people that understand how to evaluate deals and get offers, so it’s not 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. They possibly can’t if they don’t have the technology. It’s spot on.

Matt, 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 learning that there was a time where everyone was like, “Chris, what deal can you get me on that.” I know on your website and traditionally this costs, how much per month?

$97 a month.

You’ve got a promo code that you allow us to create that gives you 70% off. Is that for the 1st or 2nd month? How long is the 70% off?

That’s a lifetime.

That drops it down to $29.99 a month or something like that?

Yes.

Matt, where do they go and what is the promo code if they are like, “This is a no-brainer for $30.” I’m laughing at the pricing because you have created something that saves so much money and is valuable because that’s a big thing. It’s minimizing mistakes that cost them money. If I can minimize my mistakes for $30 a month, I laugh because that’s what I call a no-brainer. How do they find this thing?

Go to RehabEstimatorPro.com. When you go to sign up, you can click on a code that you can use. It will say Coupon Code right on there and it is REI RADIO. You will get that discount code. As soon as that’s in, it will reflect the pricing change and sign-up.

The promo code REI RADIO gets you 70% off for a lifetime, which is a heck of a deal. I appreciate you allowing me to offer that. You are making me look good to everyone because that’s what our company is about.

That’s our goal. Honestly, I love it. You are 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 send my bookkeeper out in the field, and that was a big challenge but we did it.

Leadership is the ability to reduplicate yourself at an efficient level. It’s always about reproducing in every facet. You are allowing us to do that via this tech. Honestly, I wish I had this years ago because, for me, I’m admitting that repairs are a weakness of mine. People are wired. For you, that’s your gift. You do this all over the world. You travel and build things in foreign countries as a ministry. I’m the guy that would tag along and go, “Tell me where to move the bricks from one place to another,” because that’s about all I can do.

We need that guy. We need you.

You’ve got to tell that guy that you need him, so he doesn’t feel so bad. Thanks for reading. 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 see you next time when we add more value. Talk to you later.

Thanks. See you later.

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About Chris Arnold

WI 741 | Maximum ImpactChris Arnold is a 15 year Real Estate veteran who has closed over 2500 single family real estate transactions in the DFW metroplex. Chris is the founder of multiple companies that are managed by a US virtual team, which allows Chris to run his organizations while living in Tulum, Mexico full time. His passion for leaders has led to the creation of Multipliers brotherhood which serves the top 5% of real estate entrepreneurs out of the US. Most recently Chris has launched his REI Radio coaching program. This program is designed to teach real estate investors the marketing stream that everyone knows about but NO ONE is doing!

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