Should the person finding a wholesale deal also be the one estimating the rehab?
A recurring pattern in wholesaling as a service is a sourcing fee quoted with a repair estimate bundled in, and it's worth thinking through whether that number should come from the same person who gets paid when the deal closes. The case for including it: a sourcer has been inside the house, knows the local trades, and has seen many comparable rehabs in that zip code that year. Requiring a separate person to walk every property adds a week and real cost to each look, which is a meaningful drag on a small deal. The case against: a sourcing fee that's contingent on the deal happening creates an incentive problem. A rehab number that's $12,000 light is the difference between a deal that gets taken and one that gets passed on, and there's no mechanism that punishes optimism after the fact. It isn't uncommon for an estimate to say $28,000 while the first contractor bid comes in near $46,500, with the sourcer's explanation being that contractors always pad. Sometimes that's true. The buyer still has to pay the bid. At the same time, an independent estimate from someone who's also only walked the house once isn't automatically more accurate, just differently motivated. The independence can buy someone else to be annoyed at more than it buys real accuracy. Operators who have run it both ways tend to have a clear preference, and that experience is worth more here than another round of theorizing.
Rehab estimate on a sourced deal, where should it come from?
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