I am a new member to Bigger Pockets and have already learned a great deal from the forums and podcasts. I'm truly grateful for the information.
I am also a new investor in flipping in the Las Vegas/Henderson, NV area. Currently I have a property under contract - the house was built in 1989, 2000 sq. ft, 3 bed, 2 bath, in good condition but needs a lot of updating/upgrading to bring it into the 21st century. So far I received quotes from two local general contractors. Below are the details of the quote from one of them (#1-16).
As a new "flipper", I'm not 100% sure if the GC is over-quoting me. I welcome any comments and/or recommendations you have. It's scary the first time but I'm excited and nervous at the same time. Any help you can offer is greatly appreciated!!!
Thank you in advance,
1. $850 Landscaping = There are weeds between rocks so we will have to remove rocks to get get to them. Clean out the front planting bed by the front window, remove weeds and put in 3-4 new plants. Add dirt, wood chips, hide irrigation system. Trim the small palm tree in front. Remove the big tree in the middle of the back yard to open up the area, trim all trees in the back yard. Remove trash.
2. $3000 Removing popcorn ceiling = this may take about 7 days, cover up all the floor, remove all ceiling fixtures, wet ceiling let soak, scrap off, clean up, let dry completely 2-3 days, add new texture, paint.
3. $3000 Paint the house 2 tones, paint front door white
4. $4000 Master bathroom = removing old sink, counter, and fixtures. Install granite, new sinks and faucets, install new lights, clean up mirror, paint cabinet white. Install new tiles for shower and bath tub, cut out the wall to make room for a door going to shower and toilet. Please note adding a door for toilet alone make the space claustrophobic and will require adding more lights and fans, therefore, I think a door to shower and toilet is better.
5. $450 = Master bedroom = install new ceiling fan, upgrade entry doors.
5. $3500 Kitchen = removing old counter and install granite counter and full back splash. The back splash will go up all the way to the cabinet and also extend into the window area, paint bottom cabinets white, install new hinges, knobs and handle, remove old excess wiring, remove the ceiling fan and install track lighting, install can lighting over the kitchen sink. add new kitchen sink and pull out faucet.
6. $1200 Downstairs bath = install granite counter, new sink and faucet. Install new toilet seat, new bathroom door. Please add $300-500 for new shower door depending on styles.
7. $ $500 Downstairs bath = install new tile flooring
8. $ $300 Bedroom 1 = replace missing closet doors, upgrade entry door and knobs
9. $150 Bedroom 2 = upgrade entry door and knobs
10. $ $800 fireplace = upgrade the fireplace area, removing and installing new tiles
11.$500 = replacing lighting = front door, ceiling, stair way, hall way
12. $750 = Office room = fix the bend on the wood walls, install dry wall, texture and paint. Run wire, add new light and fan switches
13. $450 Laundry room = install new upper longer cabinets, install utility sink
14. $700 = garage = correct wiring to code, relocate lighting, add vents to water heater room, add light switches, install self closing door per code required, remove old carpet, pressure wash.
15. $850 Garage door = replace, install new garage door, = current garage door has cracks.
16. $400 = change entry area tiles
Total = $21,400Please note this is only a rough. There are, of curse, areas we can skip/ not needed. Some cost may change depending of the materials you choose. About 40-50% is material and 50% is labor.
Seems high to me but I don't mind doing a lot of the work myself.
Landscaping, we can clear a yard for $500 in Phoenix. as for weeds Roundup is cheap and effective.
Cant remember what I paid for popcorn removal is it the whole house? This is a nasty job and getting the texture right after your remove this stuff is important.
Some of this looks expensive to me. We have done houses and a bare door (Nice 6 panel) drilled for the handset is @ $35 at home Depot, add $15 for a handle and labor to paint it and router the recess for the hinges.
Paint the house - we pay less then $1 per sq foot for exterior. $300 per room for interior. Remember though for interior will require 2 coats of primer after you remove the popcorn and retexture.
For Master Bath I would suggest looking at a new vanity from Home Depot that already has sinks and Granite. On our last flip we had an odd length so we bought a new vanity for @ $600 then bought a prefab top with the sinks already installed (same place as our kitchen granite came from) I think the top with sinks was @600, our kitchen installer installed this as well we then added fixtures. If Home Depot has a close sidze you can go with that, not everything is wall to wall these days and you can buy a matching mirror for $50-100.
For The master bedroom see my comets on doors. Most contractors want to just buy pre-hung doors and charge a lot for the privilege.
Kitchen- 3500 is a good price IF IF IF that includes the granite. If not or there is a small amount it could be a lot. Here in phoenix there is a place where you can buy a 108' granite countertop for @500 bucks. You still have to pay a fabricator to cut out the sink and install it but still cheaper and faster then starting with a slab.
Downstairs bath, see my other comments, go with a HOPO all in one for $400 and see my comments about doors.
Bedrooms Doors and hardware see above. Closet doors (bifold) were @45 at HOPO (Usually need 2 if they are bifold) and we used the old track and hardware to simplify installation.
For the garage door we can replace one in Phoenix for $600 (installed) but it is not insulated and has no windows.
Does this include both labor and materials?
I'm surprised that a GC wouldn't include a lot more detail (what specific fixtures, type of granite, type of tile, type of doors, etc) in a bid, so that's something to consider. For example, he may be thinking Uba Tuba granite while you're thinking something higher-end. If you don't indicate upfront, you're setting yourself up for frustration down the road.
As for the prices, they appear relatively reasonable for a GC, assuming he's not using ultra-low end fixtures. I'd definitely try to negotiate down about 20% before I felt I was getting a good deal.
Unfortunately, it's not specific enough for anyone here to assist you. For instance:
1. Install granite: how many square feet? How many sink cuts? drop-in or undermount sinks (there is a price difference on the cuts)? What level of granite?
2. Install flooring: how many sq. ft.?
3. Install garage door: Does this include the garage door? single or double door? With or without windows (if door price is included)
I am a general contractor in Phoenix, Az., as well as being both an agent and an active real estate investor and flipper.
What I'm seeing in the quote looks reasonable for quality work. Remember, you are being quoted by a (I'm assuming) licensed contractor, not a handyman, or less. That comes with it much more than "I can buy a door at Home Depot for $35." You have to know what size door to buy, go to the store and purchase it, be able to transport it, know how to remove the old one, know how to square a new one so it doesn't rub or hit, and know how to paint it without ugly paint lines and roller marks, and know how to install the knob and/or cut in the hinges for proper operation. Who among us hasn't, with frustration, come across a door that sticks or rubs and has to be pushed shut or pulled open with force? They must be thoughtful to make sure the door knob and hinges match in color (brass, bronze, brushed, etc.,) usually in coordination with the bathroom fixture finishes and other hardware in the house....and pay for the supervision and overhead that has to be built into the price somewhere.
There is work that needs to be done on what looks like every room in the house, as well as the exterior. There are several different skill sets or subs needed including demo, paint, tile setting, cabinet and millwork installation, granite fabrication and installation, plumbing, electric, landscape etc. Plus the time it takes to manage the project and oversee purchasing and delivery of materials and proper installation and finish work.
Have taxes been included in that price?
As a contractor, I often come across clients who are taken back by the cost of remodeling, but if you explore the actual material costs in association with the labor, foresight, craftsmanship, taxes and overhead costs of running a legitimate business, they make sense.
That said..... A contractor is almost always willing to come down 10% or so of their initial quote. Plus, as other members have mentioned, there is a LOT of cost variable in the specifics of materials such as granite, cabinets, fixtures, and flooring. So be sure you know specifically what they are including. For example, when quoting tile flooring I often include a material cost "allowance" of say $2.00/square foot, because I have no idea what tile you are interested in, but that is usually a middle of the road cost. So, if after we get started, you choose a tile that sells for $4.00/square foot, then the price would go up accordingly. This is the same for other costs like granite, cabinets, bath and kitchen fixtures, etc.
In my opinion, one of the best ways to see if you are getting a fair deal is to quote 3 separate contractors. That usually gives you a good feel for the range. To find those 3 it's best to ask around and find out who others have used and would recommend, or look into their ratings, or perhaps look online but ask for a few references. If one is really high, rule it out. If one is really low, be very very cautious before accepting (usually means they are missing something.) If your still concerned, get a fourth quote. It is typically a waste of time to get more quotes than that unless something is wrong or unequal. Keep in mind, costs are costs are costs, and contractors are in business to make a fair profit like everyone else. Of course, any work you can do yourself can cut a lot out of the price, but you really have to look at the personal time cost/tradeoff for projects that will take you days that might take a skilled craftsman hours. As you complete more houses and gain experience you will learn more about what to look for in cost savings and can "fine tune" them by using repeat suppliers and contractors like Bob above is correctly suggesting in order to maximize your savings.
Best of Luck!
THANK YOU Bob, J. Scott, Guy and Larry for your most valuable input.
Currently I'm creating the SOW and Budget based the templates/examples shown in J. Scott's "The Book on Flipping Houses" (chapter 12 & 13). Love this book! It's been my Bible since I started two months ago.
I am incorporating all of your suggestions and comments to address the details of each item with GC #1 tomorrow and GC #2 later this week. Since the house after-renovation will be targeted towards non-first time buyers/middle-class families, my plan is to use medium grade material for the kitchen and master bath, the rest with mid-lower grade material.
I will post more specific numbers after my discussion with them and welcome any additional thoughts from you.
Thank you again!! I love the positive, supportive and informative environment BP creates! I hope when I become seasoned enough one day, I can give back the same way you are supporting me now.
Happy New Year!
@Tiffany C. I'm so excited for you!!!!! Glad to see things are starting to go in your favor.
I don't want to post redundancy, so I'll keep my comments short. Overall the bid looks to be in the ballpark of what my clients have paid for similar work. Still as several have mentioned, make sure to get the specs on the materials for the bid.
Consider putting a little extra into the landscape if the neighborhood warrants it. I see a lot of people try skimping on landscaping. I think that's a big mistake. This is the first thing people see. It might be the thing that gets someone to stop the car. It's also the last thing they see before they go to write an offer. A few hundred bucks more for some nicer plants goes a long way.
Thank you Phil for your advise and confirmation!
We have budgeted $400 for all yard work, including cleaning up the yard and trimming back tree branches. If additional work needs to be done I will definitely not hesitate.
I met with the GC mentioned above and revised the rehab items. However, during our conversation I learned that he no longer has the GC license and insurance as he hasn't had much work lately and it was too expensive to up-keep. Lesson Learned #1: Ask for GC license & insurance info up front.
Fortunately I was able to meet with GC#2, who is licensed with insurance. His quote is similar to GC#1 but includes appliances.
I will keep everyone updated on the progress of the rehab, including photos of before, during and after.
Thank you and Happy New Year!
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!