As a new investor I am not at a place where I can estimate rehab within any real level of confidence. There is a matrix I like from Jeffery Norton that uses the ppsf method and I think that is a good place to start as he has the numbers updated for 2021....however, for my own comfort I want a few GCs to go boots on ground after I have locked in a property through a contingent offer. While inspectors can tell me what needs to be fixed that is not the same as here is what is needed to bring the ARV to look like XXXXX.
In my market its very competitive (San Antonio, TX) to the point that I am going to focus on OFF MARKET leads, but the on market are helping me learn and get my reps in.
As I don't have GC relationships I trust yet what is a reasonable amount of time from "hey I dont know you" to they show up and bid? I can wait to build GC relationships until I have a deal but the option window is only 7 business days I am concerned that is not enough time to contact, prequalify, have them avail to bid, and get back to me with a bid all while still working my day job.
Also an enormous amount of GCs that I talk to are not registered with the city to pull permits. These come from referrals.
As a new investor without a property that you own, it will be very difficult for you to get anyone to come out and spend their valuable time talking with you about a possible project. Their odds of landing a job from an investor is 1% and they know it. You will have to find a couple of good Contractors, check them out thoroughly and then ask how much it will cost you to get a rough bid or a firm bid. Expect to pay $300 - $500 for a good bid. And since you won't have any approved engineered plans, they'll still be just guessing, so you can have these bids come in 20% off, easily. You may find a young rookie guy desperate for work who will throw some numbers at you but he's really guessing.
I could get my GC by this week. I keep her pretty busy so she's pretty good about getting by these kind of things for me.
This is exactly the reason that you have to know what things cost BEFORE you even bid on the property. I hope that you take this in the nicest way possible: You have to know what you are doing in this business to have a successful business. If you dont know construction, dont have a construction business. Flipping houses or even doing rehabs to be a buy and hold investor is a CONSTRUCTION BUSINESS. You gotta know the construction business. OR partner with people who know or own a construction business. I can't tell you how valuable partnering is to your success.
Knowing that a roof costs 8k is great. But do you know how to deal with the roofing contractors? How long should it take? Why might they take a week to do the job? or should it take 2 days? Do they need a license to do a roof? And do they need an inspection? Big learning curve in addition to just knowing what something costs.
@Rick Pozos Really good points...!
@Rick Pozos isnt that the point of the GC? And finding ones filtering them building trust etc?
(Quality) Contractor relationships have been the hardest piece of the puzzle for me in Austin. The best ones are booked months out and cost a fortune and the rest, well we all know the rest. I have considered starting my own construction co just to have people around at all times.