I’m trying to find out more information of the market for flipping and rehabbing properties in the Dover area. All the work I’ve had quoted on my personal property and rental have all come back with outrageous prices. It seems like the market is too good for manual labor trades right now and they can afford to through out crazy numbers for smaller jobs that they aren’t as interested in. I was wondering if anyone can give me any insight on using contractors for flipping in this region. The numbers I hear thrown around for rehab budget on the bigger pockets podcast seem really low compared to what I’ve seen. Are most people in this area doing the work themselves or is it just a matter of finding the right contractor?
@Mark Pemberton briefly,
1) you're between Boston and Portland.
2) yes, the economy is HOT.
3) It's summer. It is always harder to get a Contractor's attention in the middle of the summer.
4) even in the off season, you often have to wait months for the good ones.
5) try Thumbtack and Angie's List and... simila sites. At least there's some competition there.
All that said, what are you looking for? Plumbers? Electricians? GCs? Painting?
Dover is certainly in the path of progress as the Portsmouth market becomes even more expensive and continues to attract jobs etc. We're experiencing an even more robust period for the contractors than back in the '05, '06 boom and I think a lot of this is bolstered by the fact that real estate has become even more un-affordable to the general working folks, so a lot of people are expanding or renovating what they already have, hence the lack of available contractors. You may have some success with Thumbtack and Home Advisor, seeing as new firms will align themselves with these services as a way to build up their client base quickly. Hope this helps!
Thanks for the tips on sources to look for contractors. I've definitely experienced the long waiting time for a contractor to be able to get around to my project. I guess that's the problem that comes with going with a highly rated contractor. The main stuff that I would contract out with be roofing, major structural changes (i.e. removing a load bearing wall), and complicated electrical/plumbing projects. For the most part I'm pretty comfortable with most plumbing, electrical, and carpentry type projects. I'll check out thumbtack and Angie's List. My experience with Home Advisor is that they just bombard you with telemarketing after you search for any contractor. Again, thanks for the help.
@Mark Pemberton the spreads for a rehab budget to flip houses aren't there in the less expensive areas in New Hampshire. If you get a house in Boston for 40% off because it's a full rehab you pay say 1 million instead of 1.8, you now have that 800 to rebuild the place and make money. If you take a house that is 200 and pay 120, you will not have the money to rebuild a house and make anything. I'm a contractor in southern New Hampshire and with the current market you are better off looking at BRRR strategy properties unless you want to explore a higher spread market like Portsmouth, seabrook etc. As far pricing goes My electrician is 95 an hour, my plumber is 105, and I am 75 as well as my employees. That rate doesn't change wether you are looking at a house with the 800k spread or the 80k spread. I've personally come to the conclusion that it's not worth it for me at this moment to rehab homes, until more houses go up at rehab rate(the foreclosures ramp up)
Thanks for the data on pricing, as well as the insight on what markets to go for. That's really invaluable knowledge for someone just starting out like me. I have been looking for possible BRRRR situations to create a passive income stream, but again the cost of hiring everything out makes it almost impossible to get your investment back out once you refinance. I may have to look at a hybrid strategy where I do most of the work and contract out what I need to. Again, thanks for the input. It's really appreciated.
@Mark Pemberton I’m an investor from Dover and have experienced similar challenges in finding contractors and getting reasonable estimates. It really comes down to a numbers game. Create a list of 20 plumbers, 20 electricians, etc. and call ALL of them and hopefully you can get 3 realistic quotes for each part of your project. Also plan way ahead. For getting my boilers serviced, I am going to start reaching out to plumbers in the next 2 weeks as they can book months out. For rates I’ve experienced, plumbers range from $75-110/hr, general contractors $40-65/hr. Some are much better then others, try to pre-vet them by asking about availability, pricing, deposits, insurance. Also ask for detailed quotes and create SOWs to avoid disputes over hourly increments etc.