Intro & Calc Review - itemized rehab costs, purchase costs

[Jon Catterson]

Hello all,

I live in Sacramento, CA. My wife (then girlfriend) and I purchased a long-distance SFH in Columbus, OH, in 2021 and sold it in 2024. It went well. Sidenote: @Zeke Liston is a great realtor there, and Donny Thompson was a great property manager. Both provided numerous off-market leads. Donny had contractors he worked with for his landlord clients. 

Now, I want to fix-and-flip locally before perhaps doing long-distance BRRRRs, which I believe do not work well here in Sacramento. I have read The Book on Flipping Houses by J Scott and summarized it for myself, have listened to The House Flipping Framework by James Dainard, and am now reading it and summarizing it for myself. I have utilized J Scott's The Book on Estimating Rehab Costs to estimate renovations. Since the latest edition was published in 2019, I am using the upper end of the ranges due to inflation. I also have a good friend who knows everything there is to know about construction, who corrected some of my rehab estimation mistakes, though he is not a flipper and has some blind spots for what is needed for flips. 

I have a realtor and am searching the MLS. I've made three offers. They were all lower than the list, and the properties went to someone else for list. I think my rehab estimates are high, but I hesitate to go lower since I'm a beginner to this. I will use a general contractor for sure on this first flip, which of course adds to expenses.

My money comes from a self-directed IRA. I am using all cash, no financing. My plan is to flip one or two properties within the self-directed IRA, gain experience, and then utilize hard money or, ideally, private or soft money, outside the IRA. I don't want to do too many flips in the SDIRA to avoid UDFI tax.

Below is an analysis I did on a real property I visited. The rehab estimate is itemized to a certain extent. The one I did was more in the weeds, but what's in the reports gives a good idea of what I thought. 

I would REALLY APPRECIATE any feedback IN GENERAL and on the REPORT. Thank you!

View report

*This link comes directly from our calculators, based on information input by the member who posted.

[Andy Sabisch]

Jon

What is the ft2 of the house . . . to have a new roof put on (and include decking from what you said) with permits in CA, the estimate you have seems low - we pay more here in NE Pennsylvania.  

The $7000 estimate for HVAC may be a tad low depending on the size of the house and size of the unit you are installing.  Once you have the ft2, call a few HVAC people and get a ballpark . . . again, we paid $9,000 for one in an 1800 ft2 house a few months back here.  

The garage conversion could be a can of worms . . . can always add that to the offer as a contingency to verify that the conversion was permitted.  

As far as flooring, what do comps in the area have for flooring?  We usually use LVP or actual hardwood for higher finish homes . . . not sure what $482K buys in your area and the finishes it demands (around here that would get you a 4,000 ft2 on an acre lakefront lot). 

Again, check the buying and selling costs . . . we closed on a $210K house yesterday and our closing costs with just the buyers agent commission were just over $10,400.  

As far as bids, realize that GCs need to make money so spending time giving estimates on the hope you buy the property and then use them is often a non-starter.  Get ballparks from them and when you buy a property and the GC you use does a good job, stick with him on future jobs - we have found we get bumped up when we need him.  

Finally, yup, permitting can suck and you really have to keep your cool which is extremely difficult at times dealing with some of the people in power.