Per house cleanout estimates from photos versus one flat allowance across a large REO batch

The shed thing is what gets me. Every set of REO photos I've looked at is eight interior shots and one from the curb. Nothing of the garage, nothing of the basement stairs, and no idea whether the attic has forty years of boxes in it. If half your variance lives in the spaces nobody photographs, does a per-house estimate actually get you accuracy, or just a more detailed version of the same guess?

On the management side, flat-rating by unit type works because turnover is repeatable. A two bed vacate looks like the last two bed vacate roughly 80 percent of the time, and the average all-in cost of a turn tends to land somewhere near 1,750 dollars once cleaning and paint touchup are added. Distressed acquisitions don't behave that way. Turnover cleaning spread might run 30 percent between best and worst case, but a spread across 41 foreclosures is likely to run ten times that, from an empty ranch to a house with a decade of belongings in it. Flat allowances work where variance is narrow, and this isn't that.

Here's what a flat allowance number does to a bidder. Ask for a fixed price off photos and the crew loads the price for what they can't see, because they've eaten that difference before. So the quotes that come back tend to cluster near whatever flat number was floated, even on the empty houses. A sturdier structure is a base for the visible scope plus a per-yard rate above a stated volume, with the walkthrough count controlling. On a house that photographed at 12 yards and came out at 21, the buyer pays the base plus nine yards. That's the honest allocation of who eats the unknown. For pricing 41 addresses sight unseen, use the flat allowance to decide whether to make the offer, then get a real number during the inspection window and use it to renegotiate or walk. The allowance isn't a budget. It's a screen.

Thatch, when you write it that way, who counts the yards? If I'm the buyer and you're the crew, we're both looking at the same pile and I've got every reason to see 14 and you've got every reason to see 18.

Flat number is the practical answer. Anyone sending 40 offers is not going to sit and estimate 40 photo sets, the offers simply stop going out otherwise.

Yards is the wrong unit for half of these anyway. A garage of clothes and cardboard is volume. A basement with plaster, tile, and a couple of cast iron rads is weight, and the transfer station bills you on weight. I've seen a 15 yard load come off the scale at 4.5 tons because somebody demoed a bathroom into it. If your allowance is built in yards you'll get surprised on any house where the previous owner started a project and stopped.

A common approach once a portfolio gets large enough is to stop pricing cleanout per house and instead carry a cleanout reserve across the portfolio, refilled monthly. Averaged over a year, that number tends to be stable even though no single property matches it exactly. Take an operator running roughly nine turnovers and two acquisitions a year and spending a bit under $19k across the year on cleanouts: that comes out to somewhere around $1,700 a door annualized on the rentals, with the acquisitions eating a disproportionate share of the total. That approach only works once there are enough properties for the average to mean something. Bramble, at your stage you're buying one house at a time, and a bad surprise on house one is your whole margin. Averaging does not help until the portfolio is bigger.

Numbers to sanity check whatever allowance gets picked. Three crew for a day runs about $1,150 in labor to the client, plus disposal, plus $95 if the trailer has to come twice. A standard vacated three bed with contents is a day and a half and two loads, so call it $2,400 to $3,000 all in depending on the tip fee, and that is without carpet or appliances. Hoarder conditions double the days and add PPE and sometimes a bin swap, so $6,000 is not unusual. So a $2,800 flat allowance is a fair median for occupied and left houses and roughly triple what a truly empty one costs. If more than half the list is empty, that flat number prices out of the clean deals.

Cobalt, does anybody on your side quote from photos and hold to it, or is everyone doing base plus per yard like thatch? Trying to work out whether photo bidding is a real market or a thing investors ask for and nobody honors.

This thread is useful from the other direction. If investors buying lists want one number per house before they walk it, the crew that can produce a fast, defensible photo estimate wins the relationship even if the number gets trued up later. Saying "$2,400 for what I can see, plus $55 a yard past 14, count taken together on site" beats saying "can't quote without seeing it." Bramble, would buyers actually pay for a paid pre-offer estimate, like $150 a house, or is that instantly too expensive at 41 addresses?

At $150 a house, pricing all 41 addresses to buy maybe three comes to $6,150 spent to close three deals, and that math rarely works for an independent buyer. It works better on the servicer side, where somebody is already paying for property condition reports across the whole inventory.

If any of these are going on a rehab loan, check how the lender treats cleanout before setting the allowance. Some treat it as part of the funded scope and reimburse on draw, some call it a soft cost and won't fund it at all, which means it comes out of cash on day one whatever the spreadsheet says. Get that in writing from the lender before committing to a number, because it changes the timing of the money even when the total is the same.

Everything in this thread assumes a transfer station you can get to. In a rural county the nearest one that takes mixed household can be 38 miles out, open four days a week and closed by 2pm on Saturday. Two round trips is most of a day of truck time before anyone lifts anything. An operator in that position carries a flat allowance well above the numbers here, and most of it is windshield time rather than labor.

A separate line item you will want in the same spreadsheet: what you are allowed to do with the belongings. Abandoned personal property rules differ by state and sometimes by whether the former occupant was an owner or a tenant, and in some places you owe notice and a storage period before anything goes in the bin, which turns a one day job into a scheduled one. That is a question for a local attorney on your specific facts, and it belongs in the allowance because storage and haul-and-hold cost money that photos will never show you.

Warrant's point is the one most likely to blindside an operator here. Bramble, if a house on your list still has occupants or their belongings and you are on the hook for a notice period, the calendar becomes the binding constraint, and the cleanout allowance is secondary to it.

I'd carry both numbers and use them for different decisions. Flat allowance to screen, so you can move on 41 addresses without drowning. Then a per-house number after the walkthrough that has to clear before you release contingencies. What I'd add is a hard reserve on top, because the tail is what kills people. Cobalt's $6,000 hoarder case is maybe one in ten houses on a distressed list, so 10 percent of $6,000 is $600 a house of expected tail on top of the median. Build that in and your flat number is closer to $3,400 than $2,800, and the clean ones get cheap enough that you can win a couple.