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Forums » Rehabbing and House Flipping » Help with first deal....

Help with first deal.... Subscribe to Help with first deal....

13 posts by 7 users

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Wholesaler · Richmond, Virginia


Ok, so it's about time that I get ready to construct my first deal. My only concern is, once I find a place how do I estimate rehab cost? I have worked with my father when I was younger so I have a basic understanding of do it yourself work. Other than that I'm pretty much left in the dark.

How does one estimate cost and generate a total amount needed for material and labor? I know I can have a contractor come in and give me an estimate but I simply don't trust anyone else on telling me how I should spend my money.


Wholesaler · Richmond, Virginia


Anyone??


Electrical Contractor · Maine


Seems if you don't know how to do it and you don't trust anyone else to do it, your stuck...


Contractor · New Haven, Connecticut


there is home repair price guides available online. Basis upon sq ft. Can use as a "guestimate", I would set aside 15% of that total for the unforeseen and fluctuations of accual cost vs the guidelines. Good luck...


Real Estate Investor · Atlanta, Georgia


I'm actually working on a solution to this problem, and it should be ready in a couple months... :D

In the meantime, here are some suggestions:

- For materials, spend several hours walking the aisles at your local big-box store, getting familiar with material pricing;

- As for labor, you don't need a contractor to "tell you how to spend you money." It's up to you to decide how to spend you money -- the contractor just tells you how much of it you'll have to spend.

- On your first couple houses, either make up a detailed list of what you want done to the property and get several bids from contractors, or -- if you have no idea what does and doesn't need to be done -- get a good inspector to provide an inspection report and use this report to generate a scope of work for the contractors.

- Regardless, it's always a good idea to get an inspection on the first one. This will give you the opportunity to see how the inspector approaches the inspection and also give you an opportunity to ask a LOT of questions. Consider the $250-350 you spend on the inspection to be a 1:1 coaching session (your inspector may not like this, but if you use him a few more times, he'll get over it).

J Scott, Lish Properties, LLC
Telephone: 770-906-6358
Website: http://www.123flip.com
http://www.123flip.com


Rehabber · Santa Clarita, California


I always recommend to spend many hours at home depot or lowest and get familiar with material costs. I have uploaded a great form for rehab costs here on bp. Next, u need to grasp the ability to know what to fix, how to improve floorplan layouts, and what to put into homes for your market to get the most for every dollar spent. Only experience will accomplice this and u can get that by going to as many fro listings as possible, walking thru and noting items, practice majesty perfect and if u can go with an experienced rehabber for practice, that is best.

Small_barnardenterprisesWill Barnard, Barnard Enterprises, Inc.
E-Mail: info@barnardenterprises.com
Website: http://www.barnardenterprises.com
info@barnardenterprises.com


Wholesaler · Richmond, Virginia


this is exactely the help that i was looking for. Thanks!


· Anaheim, California


Actually, what you are really looking for is a cost estimator by project. Try https://www.repairbase.net/ This is put together by Blue Book which tracks real estate and construction value/costs across the country. It is low cost and you list your work by project and quality e.g. "High end bathroom remodel." You can also look for "Construction Estimation Software" but that only tracks cost and generally doesn't provide pricing. Many of the cost estimators are very detailed and you can use some from the insurance industry. They have live links to industry averages based on geography but IMHO they are too detailed and are not worth the time to set up.

I learned pricing on my first jobs by getting 3-5 contractors quoting the job. By the time the 3rd contractor comes by, you are asking smart questions and you get a detailed understanding of what it takes to complete a job. Don't go with a general contractor, get a plumber, electrician, concrete guy, etc. There is no better way to learn than direct from these guys once you control the property.

However, you want to price it out prior to committing to a purchase so RepairBase is a better start. Add a 15%-20% contingency onto it for unknown items, errors and behind the wall discoveries.

Try this for a quick and dirty rehab. I can produce these prices in SoCal and if you are in SoCal I would be willing to walk your first job with you:
Painting (inside and outside): $2/SF
Carpet: $2/SF installed and add a little for stairs
Ceramic tile: $1/SF + $3/sf - $6/SF to install
Hardwood flooring: $3/SF + and $3/SF -$6/SF installed
Vinyl: $2/sf installed
Kitchen cabinets, sink, granite slab: $6000 (this will get a pretty nice kitchen)
Bath remodel by a contractor: $6K - $8K
Whirlpool stainless steel appliances (entry level DW, micro, stove): $1500 installed
Pricing your own installs with a handyman: Price materials at a big box store using the contractors desk and tell them you are new and self managing your first project. Go at 10AM AFTER all the contractors are on their jobs and the people have time or go at 2PM after they have filled most of the orders for the contractors. Whatever the price of the product, add 50% for labor to install. Toilet for $100 means $50 install. Tub and shower enclosure for $450, allow $225 to install. If the material is over $500 use 30% of the cost to install.

This gets you in the ballpark and perhaps a little high on your estimates.


· Anaheim, California


Mike - in case I get blasted for that last post - it is general rules of thumb and anyone blasting me should also post ways to improve what I said. Good Luck!


Wholesaler · Richmond, Virginia


Greg - Thanks for your help, I sent you an e-mail.


Real Estate Investor · laurel fork, virginia


hey mike, best of luck with your rehab! wow, you got some very powerful feedback here!...people here amaze me! i was also wondering if you've talked with rehabbers and contractors in your local reia group?

much success,

sage


Wholesaler · Richmond, Virginia


Yeah Keith I feel like this site has helped me a lot. I have came a long way since I first started researching REI. How are things coming along on your end?


Real Estate Investor · laurel fork, virginia


sounds like you are asking some great questions, mike...i'm learning alot from all the questions on here! am turning over a couple of rocks here and there...thanks for asking. been having good discussions with seller of a mobile home park, but may have hit a wall (see my recent post under mobile home parks). sometimes i'm learning my biggest challenge is myself!

take care,

sage




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