"A major restoration project on an old house or other building, ripping out plaster walls back to the studs and rafters and replacing them along with some or all of the trim,"
on that link it said something like a gut job is about $40 a square ft.
so if i am really bad with estimating repair costs, could i just do a 1400 sq ft house and multiply it by $40? 1400*40= 56k. so that 56k would be the the estimate of the most i would be spending on repair costs?
200k (ARV) * 70%(my profit) = 140k
140k-56k (max repair cost) =84k
now obviously 56k seems like wayyyyy toooo much unless the property has completely gone to crap... but is that the most it could be?
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
12y
Originally posted by @Derek LeBlanc:
im just trying to find an easier way to estimate repair costs. i am no contractor and have no idea how prices run. i went to home depot to look at prices of things but that comes nowhere close to what it would cost for installation and everything..
so how do i figure out repair costs if i have never been in construction
You're looking for shortcuts and there are no shortcuts when it comes to estimating (at least not at first)...
In my opinion, the best way is to break the rehab down into all the major components and then break the components down into specific tasks. All of these specific tasks together make up your Scope of Work (SOW).
Each line-item on your SOW will consist of some material cost and some labor cost. For each line-item, you can get an idea of the material cost by visiting your local big box store, building supply shop, online retailer or talking to other investors. For each line-item you can get an idea of the labor cost by talking to contractors or asking other investors who are familiar with contractor pricing in your area.
Then you add up all the labor and material costs for all the line items and you have your budget.
If you dig around, you'll find a lot of posts I've done going into more detail about this (both here and on my website). And, after you've exhausted the free resources, if you want more, BiggerPockets has an entire book devoted to the topic (that I wrote).
If you're looking for a quick and easy answer, you're not going to find it. If you're willing to do some study and some work, you'll find that estimating really isn't that hard once you have a framework.
Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes
12y
But here's the thing, Derek. You DON'T just need "a few extra tips." As many posters have told you, again and again, your questions reveal just how much you do not know.
Look, I'm not trying to bust your peanuts just for the sake of it. I'm happy to see people be successful, and I am especially happy to see young people with ambition. It is a good thing.
But you're over your head, and you are going to lose your shirt. Or worse, tie up a house in a contract you cannot perform on, and cause the seller real financial damage.
RE Licensing course: $375
Home inspector course: $900
Working on a Habitat house: Free
New Hampshire Housing Finance Authority courses: Free
Work as a construction laborer: They pay you
Get a secured credit card, join St. Mary's credit union and get their credit builder personal loan, check your credit reports: Maybe $300-$500.
Buy the J. Scott rehab book that has been recommended; $20(?)
It takes a little bit of money, and a fair bit of work, and then you will be much more likely to be successful.
sometimes you have to just see when your advice is not wanted, even if it is good and divert your efforts in another direction. @Account Closed
maybe you can look at some cheaper properties where you expose yourself to less risk if you make mistakes along the way. Every year there is book you can pick up that will give you estimates and ranges of what contractors charge for different jobs that can give you an idea.
i am just looking for a way to estimate repair costs. i dont know any repair costs so it is hard for me to put a house under contract or even make an offer
You should have attended the meet up n NY last week in which I spoke about this very thing.min fact, I presented a video of how I walk through a home, break it up in parts,and easily price things out and come out with a total rehab budget. Granted I have been doing this for some time, but as I explained then and numerous times in many threads here on BP, practice, practice, and practice some more.
I have many threads on how to evaluate rehab budgets and NONE of that advice includes a price per square foot!!!
Simple get the prices for materials at Lowes and HD and then get installation costs from contractors and subs. Fill in the values and go practice on some listings.
Investor · Cranford, NJ · Member since 2012 · 303 posts · 153 votes
12y
Originally posted by @Account Closed:
i am not looking to do some habitat working or whatever. i have too much stuff going on to start up a different project. im making major process in wholesaling i just needed a few extra tips.
FYI Habitat is a volunteer program, you can go for one day and never go back if you hate it. I think you might learn something about construction, but not so much about its costs. Either way if you pay it forward you never know what you might garner from the experience.
There are no tips, this is not something you can just pick up. Experinced contractors and rehabers learn this from years of experince. If you are trying to wholesale consider paying for a contractor to deliver an estimate, or pay for a home inspection that way at least you know whats wrong and you can get specific bids to fix it.
Learning what needs to be fixed, what materials to fix it with, and how much it should cost is way more than a form post worth of info.
At the very least buy @J Scott book, and invest the time to understand the concepts he lays out. After that read Flip by Rick Villani, and you will be a long way further along, but nothing can really replace the knowledge you gain by doing it.
Investor · Baltimore, MD · Member since 2014 · 1k+ posts · 688 votes
12y
The only real way to estimate a rehab, is to know what a rehab costs given the house in question. each house has its own set of circumstances. A guess is just that, a guess
Real Estate Investor · Boston, MA · Member since 2009 · 2k+ posts · 542 votes
12y
@Account Closed Hundreds of posts, all that reading and you still haven't done a Deal and made tens of thousand$?
I think this business is Simple but not Easy. You've got some great advice already.
At our meetings we usually pair Investors up with the Contractors they'll need. Two nights ago 6/24 we did a ton of Networking and found there was at least one of everything in the room, it worked out well for putting teams/partners together.
Maybe you need a deal that's just Cosmetic? However there's usually other expensive deferred maintenance...
Many contractors prefer to give you a single, bottom-line price for your project, but this puts you in the dark about what they’re charging for each aspect of the job.
For example, if the original plan calls for wainscot in your bathroom, but you decide not to install it, how much should you be credited for eliminating that work? With a single bottom-line price, you have no way to know.
If you get an itemized bid, it’ll show the costs for all of the various elements of the job, including:
Demolition and hauling trash
Framing and finish carpentry
Plumbing
Electrical work
HVAC
Tiling or other floor covering installations
Lighting fixtures
Drywall and painting
That makes it easier to compare different contractors’ prices. If you need to cut the project costs, you can easily figure your options. Plus, an itemized bid becomes valuable documentation about the scope of your project, which may eliminate disputes later.
Contractors shouldn’t give you a hard time about itemizing their bids. If they resist, it’s a red flag for sure.
is that something i would follow or do you suggest something completely different.
Derek, we have combined a longer list of questions you should be asking here (87 questions):
Investor · New York, NY · Member since 2008 · 169 posts · 73 votes
11y
@Account Closed
I believe rehab costs really boil down to location of your property. In order to get the best estimates, you really should get bids from 3 different general contractors. Ask for references from investors in your property's area (REIA?), neighbors, agents, even Angie's list!
I would not try to estimate based on a formula, unless you've done it hundreds of times already. Better safe than sorry.
I can tell you this. Our apartment is a 2/1, 1100 sq ft in a very nice part of Queens. We gutted the kitchen & bathroom. Total cost was $40k. That same 40k could do very different things in different regions of the country. Get bids!
When it comes to estimating rehab, it's the best $30-$50 you'll ever spend. Read the book, walk through a property, generate a SOW, use his cost estimates and then add 10% ;) Stop trying to cut corners - failure to educate yourself is a quick ticket to losing money hand over fist. If it were easy as "hmmm, square footage times some random magic number = my estimating costs!" then everyone would do it successfully.