Washington rehab costs

8 Replies

Hello!

I'm am starting to look at houses and have some questions on the rehab costs. 

Does anyone in the Olympia area have any recommendations for contractors? 

Are there any ball park estimates for rehabs you guys use?

I have started my own research as well looking here on bigger pockets reading some estimating rehab articles and watching some videos. But the more information I can get from all sources the better. 

Thank you,

Collin Savunen

@Collin Savunen this question is really hard to provide a meaningful answer to other than it depends. I completely get that doesn’t help you at all but it’s the reality. Your scope of work is going to determine your rehab budget. I would suggest you attend local REI meet ups and speak with contractors/flippers about their experiences with specific projects. This will allow you to be respectful of their time but also build up specific knowledge about materials they like and the costs of those projects. This will be a lot more meaningful than just us $25-$35 per sq ft for a light to medium rehab. Also, spend sometime to develop an example scope of work (bathroom remodel) and price out all the materials to do the job. You can learn an awful lot by just wandering around home depot at the various pricing on items. Hope this helps and best of luck.
Originally posted by @Collin Savunen :

Hello!

I'm am starting to look at houses and have some questions on the rehab costs. 

Does anyone in the Olympia area have any recommendations for contractors? 

Are there any ball park estimates for rehabs you guys use?

I have started my own research as well looking here on bigger pockets reading some estimating rehab articles and watching some videos. But the more information I can get from all sources the better. 

Thank you,

Collin Savunen

 $20,000

@Collin Savunen As I read through this thread, I saw something I wanted to address. Seems like you want to get a handle on evaluating rehab costs.

I'm going to comment on evaluating the overall deal, because people get killed on the purchase.  It's not usually the rehab that gets them, it's the purchase.   

I'm an investor, but I'm also a rehab consultant and cost analyst.  My partner is a construction specialist and a broker. 

Work it all backwards before you purchase. What are the comps on the property you are looking at. What type of ARV are you shooting for. What work needs to be done to reach your target ARV. This is what your scope of work will be.

Now we have to figure how much it will cost to complete the scope of work to get to the target ARV.

Then, how much return are you needing.

Holding costs and brokerage fees.

Work it backwards and you will know what you can afford to pay for the property.  If you can't get the purchase price down to where it needs to be - then you have to walk away. 

I see too many people purchasing too high and then trying to squeeze the rehab or contractors to force the deal to work.  It all adds up to disaster.  You can't MAKE A DEAL WORK.  

I saw this comment.  Taken out of context - it can cause problems. 

"Your scope of work is going to determine your rehab budget."

The scope of work needs to fit into your budget, and you can't MAKE it fit.  

One one end you have target ARV or even retail selling price. Other end is your purchase price. It is the "guts" of the evaluation that will tell you if you win or lose on it.

I'm sure there is nothing new or mind blowing in my comments. I talk REI with "newer" investors every day and even see veterans trying to force things to work out. I just think it's about basic fundamentals and not shooting from the hip and I take every opportunity to say it.

Take me with a grain of salt, but I just wanted to chime in and try to be helpful.

Best wishes!

@John Barrett thank you! Already started building a scope of work. Will try and price it for average sized rooms. I know kitchen and bathroom will be the most expensive per square foot. And I have an REI that I am going to next week. Missed the last one by acouple days. But your $25-35 per square foot is helpful. I got $45-$55 from someone else in a high demand for contractor area. The more I gather the better.
@Ritch Bonisa Thank you for the wisdom and don't worry I have thick skin and an open mind. I agree, working backwards is better. You can only sell it for what the market wants. I am going to make a scope of work so I can quickly estimate rehab costs and have a foundation for the rehab, also to attempt to save some money. However I will use your advice and the scope of work will not be my end all be all, it needs to be flexible and adjustable.

@Collin Savunen Do you have a property in mind that you are looking at? If we had more details, we could really be of more help. I'll PM you about a GC that I have used in Olympia, but I will say here that it is VERY hard to find good, honest, AFFORDABLE contractors in the Olympia area because Seattle jobs pay so much more. With that said, there are some who just won't drive for it. 

@Collin Savunen  I’m sure if you are like me you believe in “if you don’t open your mouth, you won’t get fed” BP is a great source of information, other posts, books, blogs and podcasts. Also I’ve come across a few articles on Google (search those key words). 

To be totally honest even as a contractor you really just have to do your homework and test out what you have leaned to the fullest. Each contractor, area, flip, remodel and materials used have different outcomes in the end and as long as you give yourself room for the unexpected you will be good to go. Also from what the good ones say “buy right”.

Hope this helps and I wish you the best of luck! Cheers!