Rehab Estimation Case Study - By a newbie, for newbies (and constructive criticism!)

Rehabbing & House Flipping
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Rehab Estimation Case Study - By a newbie, for newbies (and constructive criticism!)

Manuel A.
Rehabber · Albuquerque, NM - New Mexico · Member since 2011 · 283 posts · 38 votes

So, I've made a video of my last house I checked out, a complete walk through (except exterior, which you'll just have to trust me needs exterior paint and some landscaping that I'll do on my own) and I want to let the other newbie's like myself see how my numbers come out.

I think I'm decent at it now, my first house took me a little over an hour to estimate, like 1hr and 15min. Now I can do a rough estimate in about 40 minutes! Also keep in mind, I've never closed a deal yet, so if that helps others nerves in my situation, I'm glad. And also, I'm sure more seasoned investors can give insight as to thinking my numbers are good/bad. This is all 100% to help others in my situation learn.

Let me give you one tip if you're a newbie like myself before we get into this! In the beginning I thought, "how would I ever account for every little thing?" Every electrical cover, light switch, door hardware, etc... This was important for me, but if I honestly counted all that stuff, I'd go crazy and it would just take a long time. So, for things like that, I just flat out estimate very high. In this example you will see for cabinet hardware, outlet covers, and vent screens I just simply budgeted $750. I may be wrong to do this, but first, the over estimation gives me more safety in case I under budgeted elsewhere, and it lets me keep my sanity while estimating. So... where to start...

Tools I bring with me
1. Clipboard with 2 sheets of paper.
2. Pen
3. Measuring tape
4. My phone (as a calculator, flashlight, gps, etc...) It's a Samsung Galaxy S3, highly recommend it...

So now, here is the video (it's the one on the right I believe):https://www.dropbox.com/sh/u6ucp6f4tnfnhsc/aNrYjaL929

Now, let me give you all of the info I wrote down on a piece of paper about the house:
Windows - All new (except big custom ones in the patio thing.)
Custom Windows - 2 (One is 44in x 83in, and the other is 47in x 52in)
Light Fixtures - 19
Interior Doors - 9
Exterior Doors - 2
Glass Sliding Exterior Doors - 2
Sliding Closet Doors - 3
Furnace - 1
How Water Heater - 1
Cooling Unit (Refrigerated Air) - 1

Besides this, I also have all the floor measurements for the floors! I do plan to leave the hardwood floors that already there in the hallway and living room. Everything except the bedrooms/closets will have carpet...

Here are the measurements:
MBR - 209sqft.
MBR Closet - 31sqft.
Bed1 - 112sqft.
Closet - 14sqft
Bed2 - 119sqft.
Closet - 14sqft.
Bed3 - 132sqft.
Closet - 23sqft.

Kitchen/Dining Room/Front Door Area - 229sqft.
Hallway/Living Room = 452sqft (Shouldn't need this number, but just in case...)
Bath 1 - 21sqft.
Bath 2 - 46sqft.
MST Bath - 66sqft.

Monetarily I broke down the flooring like this:
Tiled areas = 362sqft * $5/sqft(material/labor) = $1,810 I rounded to $1,800flat as I know I over measured in places and $10 bucks isn't much.
Carpet areas = 654sqft. * $2.8/sqft(material/labor) = $1831.20 I rounded to $1850 just cause it's a nice number.

Okay, now here is my numbers that I was happy with when I finished:
Total Flooring: $3,650
Appliances (Fridge, Stove, Dishwasher) = $2,200
Paint interior/exterior= $6,000
Kitchen Cabinets/Granite Tops = $4,500
Fixtures = $1,500
Doors w/hardware 9 = $765
3 toilets = $300
Bath 1 Vanity = $200
Bath 2 Vanity = $650
MST Bath Vanity = $950
Cabinet Hardware, Electrical Covers, Vent Screens, etc = $750
Heat Furnace = $1,400
Water Heater = $400
Refridge A/C = $5,000
Slider Closet Doors (3) = $285
Misc. $1,000
TOTAL = $29,550

After I get this number, I add 10-12% to it. In this case I added 12% bringing me to $33,096, which I round to $33k.

So already after doing this I know I forgot the 2 custom windows and that little problem in the ceiling of the patio thing with black mold on it... But, as you can see, that extra $4k from the extra 12% will give me peace of mind/safety from this. And don't forget the "Misc." bringing it to $5k, just for situations like these :D. Oh, and all of my over estimations on materials/labor and under estimations on ARV :D.

Some things to keep in mind
My city doesn't have much grass anywhere, so no grass would be put into landscaping, which is why landscaping won't cost me anything. I can cut down and haul away anything I need to. I can also get free rocks to lay in the yards, which is a common decoration in my city. Also, if you think all that rock will cost money to be taken out of the patio, think again! Cause I have no problem ripping it out myself. :D I want to be really hands on for my first flip, and the next one's until I feel comfortable.

So, guys/gals, how did I do? And to my fellow novices, I hope this has helped as I would've loved something like this!

ONE QUESTION FOR THE PRO'S!!!
How would you estimate the ceiling problem that has the ripped out panels and black mold? Without bringing a contractor, please. :)

Sorry for any mistakes in my writing or any left out info, I'm fairly tired... But I will fix it if brought up and answer any questions!

Thanks everyone,
-Manuel

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J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y

First, I have no idea what prices in your area look like, what types of contractors you plan to use, how much of the work you plan to do yourself, what level of finishes you'd use, etc...so my comments below are purely speculation and generalization... :)


Tiled areas = 362sqft * $5/sqft(material/labor) = $1,810 I rounded to $1,800flat as I know I over measured in places and $10 bucks isn't much.

That seems like a reasonable estimate for tile. Low-end tile and installation material will run about $2/sf, and $3/sf is reasonable for someone who does tile but isn't a specialist -- good enough for a lower-end rehab.


Carpet areas = 654sqft. * $2.8/sqft(material/labor) = $1831.20 I rounded to $1850 just cause it's a nice number.

Shop around. You can probably find carpet, pad and installation for closer to $2/sf, even for decent mid-grade carpet. Carpet will likely run about $1-1.25/sf, pad about $.25/sf and installation about $.50/sf.


Appliances (Fridge, Stove, Dishwasher) = $2,200

If you're okay with low-end stainless appliances, Home Depot sells stainless Hotpoint (GE's low-end line) for cheaper than this. For $2000, you can get all the above plus a microwave.


Paint interior/exterior= $6,000

Seems a little expensive. Based on the video, I'd think $4000-4500 is reasonable, though with the sheetrock work, $6000 is about right. Looks like you didn't count the sheetrock work anywhere else, so maybe that's included here.


Kitchen Cabinets/Granite Tops = $4,500

Probably a little bit low. Expect about $100-200 per linear foot for cabinets (depending on quality) and about $30-40/sf for granite. Hard to tell the size of your kitchen, but you're probably a bit low with your estimate.


Fixtures = $1,500

Is that just light fixtures? Or light fixture + plumbing fixtures?

I average about $35 per light fixture (some are $15 and others are $80) for materials and about $40 per fixture for installation -- so an average of about $75 per fixture. You mentioned you had 19 light fixtures, so that would put you right about your estimate at my prices. So, I'm good with that... :)


Doors w/hardware 9 = $765

6-panel MDF pre-hung doors at Home Depot will run $50-65, depending on size. Add $10 for hardware and that's an average of about $65 per door in materials. Another $30 in labor per door puts you at about $95 each, or about $950 for the interior doors.

You didn't mention the exterior doors, but expect about $200 in materials and about $50 in labor, for about $250 each.


3 toilets = $300

The cheapest toilets you'll find are about $80-85 each. You'll probably want the next level up, about $100 each. So, your estimate covers the materials, but not the labor. Expect about $50 per toilet for someone you can trust.


Bath 1 Vanity = $200
Bath 2 Vanity = $650
MST Bath Vanity = $950

Depends on the level of quality, but that sounds reasonable. In fact, for the level of house I'm assuming you're doing (relatively low end), I'd think those prices are on the high side.


Cabinet Hardware, Electrical Covers, Vent Screens, etc = $750

I generally budget $1000 per project for outlets, switches, plates, registers, mini-blinds and other random stuff. So, this is about right.


Heat Furnace = $1,400

Do you have to replace the compressor or the coil? If not, this is reasonable. If so, you're way too low.


Water Heater = $400

That will cover the water heater and expansion tank, but not the labor. Expect $100-150 for labor.


Refridge A/C = $5,000

Is this the compressor and coil? If so, that's definitely on the high side. You can probably get a whole new HVAC system (furnace, compressor, coil) for $3200-3700 for this house.


TOTAL = $29,550

You're still missing a lot of things in this estimate.

For example:

- Demo labor
- Dumpsters
- Sheetrock Installation and Repairs
- Bathtubs, Showers
- Rough Electrical and Plumbing Work
- Finish Trim (Baseboards, Shoemolding, Casing, etc)
- Roof, Siding, Gutter Repairs
- Cleaning


After I get this number, I add 10-12% to it. In this case I added 12% bringing me to $33,096, which I round to $33k.

While I think some of your numbers were off, the total is probably pretty close to what I'd expect to pay if this were my house in my area. Just from the video, I'd guess about $35K (assuming no roof, structural, electrical, plumbing or other major issues).


ONE QUESTION FOR THE PRO'S!!!
How would you estimate the ceiling problem that has the ripped out panels and black mold? Without bringing a contractor, please. :)

Probably a roof/gutter issue. Once the issue is fixed, you'll want to pull out all the moldy trim, sheetrock and insulation and replace it. That's about it. I'd factor in an extra $500, not including fixing the source of the problem, which could be a cheap fix or an expensive fix...no way to tell from the video.

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  • Joel OwensBusiness Member
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    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    13y

    Kitchen and granite tops together will be more than 4,500. The holes in the walls are generally someone either checking for inspection or a thief pulling plumbing and electrical out in different places.

    With the ground issue in the garage and the floors might hardwood floors might not be salvageable.

    I think you will have some more costs than anticipated once you get into it. try to get it at a really low price.

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  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
    13y

    First, I have no idea what prices in your area look like, what types of contractors you plan to use, how much of the work you plan to do yourself, what level of finishes you'd use, etc...so my comments below are purely speculation and generalization... :)


    Tiled areas = 362sqft * $5/sqft(material/labor) = $1,810 I rounded to $1,800flat as I know I over measured in places and $10 bucks isn't much.

    That seems like a reasonable estimate for tile. Low-end tile and installation material will run about $2/sf, and $3/sf is reasonable for someone who does tile but isn't a specialist -- good enough for a lower-end rehab.


    Carpet areas = 654sqft. * $2.8/sqft(material/labor) = $1831.20 I rounded to $1850 just cause it's a nice number.

    Shop around. You can probably find carpet, pad and installation for closer to $2/sf, even for decent mid-grade carpet. Carpet will likely run about $1-1.25/sf, pad about $.25/sf and installation about $.50/sf.


    Appliances (Fridge, Stove, Dishwasher) = $2,200

    If you're okay with low-end stainless appliances, Home Depot sells stainless Hotpoint (GE's low-end line) for cheaper than this. For $2000, you can get all the above plus a microwave.


    Paint interior/exterior= $6,000

    Seems a little expensive. Based on the video, I'd think $4000-4500 is reasonable, though with the sheetrock work, $6000 is about right. Looks like you didn't count the sheetrock work anywhere else, so maybe that's included here.


    Kitchen Cabinets/Granite Tops = $4,500

    Probably a little bit low. Expect about $100-200 per linear foot for cabinets (depending on quality) and about $30-40/sf for granite. Hard to tell the size of your kitchen, but you're probably a bit low with your estimate.


    Fixtures = $1,500

    Is that just light fixtures? Or light fixture + plumbing fixtures?

    I average about $35 per light fixture (some are $15 and others are $80) for materials and about $40 per fixture for installation -- so an average of about $75 per fixture. You mentioned you had 19 light fixtures, so that would put you right about your estimate at my prices. So, I'm good with that... :)


    Doors w/hardware 9 = $765

    6-panel MDF pre-hung doors at Home Depot will run $50-65, depending on size. Add $10 for hardware and that's an average of about $65 per door in materials. Another $30 in labor per door puts you at about $95 each, or about $950 for the interior doors.

    You didn't mention the exterior doors, but expect about $200 in materials and about $50 in labor, for about $250 each.


    3 toilets = $300

    The cheapest toilets you'll find are about $80-85 each. You'll probably want the next level up, about $100 each. So, your estimate covers the materials, but not the labor. Expect about $50 per toilet for someone you can trust.


    Bath 1 Vanity = $200
    Bath 2 Vanity = $650
    MST Bath Vanity = $950

    Depends on the level of quality, but that sounds reasonable. In fact, for the level of house I'm assuming you're doing (relatively low end), I'd think those prices are on the high side.


    Cabinet Hardware, Electrical Covers, Vent Screens, etc = $750

    I generally budget $1000 per project for outlets, switches, plates, registers, mini-blinds and other random stuff. So, this is about right.


    Heat Furnace = $1,400

    Do you have to replace the compressor or the coil? If not, this is reasonable. If so, you're way too low.


    Water Heater = $400

    That will cover the water heater and expansion tank, but not the labor. Expect $100-150 for labor.


    Refridge A/C = $5,000

    Is this the compressor and coil? If so, that's definitely on the high side. You can probably get a whole new HVAC system (furnace, compressor, coil) for $3200-3700 for this house.


    TOTAL = $29,550

    You're still missing a lot of things in this estimate.

    For example:

    - Demo labor
    - Dumpsters
    - Sheetrock Installation and Repairs
    - Bathtubs, Showers
    - Rough Electrical and Plumbing Work
    - Finish Trim (Baseboards, Shoemolding, Casing, etc)
    - Roof, Siding, Gutter Repairs
    - Cleaning


    After I get this number, I add 10-12% to it. In this case I added 12% bringing me to $33,096, which I round to $33k.

    While I think some of your numbers were off, the total is probably pretty close to what I'd expect to pay if this were my house in my area. Just from the video, I'd guess about $35K (assuming no roof, structural, electrical, plumbing or other major issues).


    ONE QUESTION FOR THE PRO'S!!!
    How would you estimate the ceiling problem that has the ripped out panels and black mold? Without bringing a contractor, please. :)

    Probably a roof/gutter issue. Once the issue is fixed, you'll want to pull out all the moldy trim, sheetrock and insulation and replace it. That's about it. I'd factor in an extra $500, not including fixing the source of the problem, which could be a cheap fix or an expensive fix...no way to tell from the video.

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  • Manuel A.
    OP
    Rehabber · Albuquerque, NM - New Mexico · Member since 2011 · 283 posts · 38 votes
    13y

    Super awesome reply J Scott, thanks a ton! To elaborate...

    I'm not sure what to say on if this house will be low end or high end. ARV is right around $145,000 so I was kind of thinking mid grade. Which I don't know what exactly that would be in terms of finishes. I know I want granite (1in) in the bathrooms and kitchen. And as for carpet/tile, I just want anything that looks good, which I know is all relative, but by good I'd mean, standard padding, with thick carpeting, and for tile, just something around the $2/sqft range that looks good. Soo, maybe I'm a little more off than I expected, but at least I'm making progress and getting closer to "good" estimates! I should be getting near perfect with the feedback you just gave me. :)

    I should say (for everyone to know!) I did use this paper created by Will Barnard: http://www.biggerpockets.com/files/user/BarnardINC

    What I did, is I went to Lowes and filled this whole sheet out, and those are the numbers I use when I'm calculating most of this stuff. So I actually went and seen how much good looking tile/carpet/light fixtures/toilets/etc... costs, and I wrote that number down, and that's what I used in this (and every other) estimation.

    For labor costs, I already have people lined up, and I use what they told me would be a "safe" number for labor.

    Oh, and yes, by "fixtures" I meant "light fixtures"! Thanks for pointing it out!

    The background of this house, just in case anyone is interested, is the previous resident was getting foreclosed on, so she gutted, and sold everything out of the house. That's why it's so stripped already, which is a good thing! I found this out by talking to the neighbors.

    Thanks again J,
    -Manuel

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  • Manuel A.
    OP
    Rehabber · Albuquerque, NM - New Mexico · Member since 2011 · 283 posts · 38 votes
    13y
    Originally posted by Joel Owens:
    With the ground issue in the garage...

    I think you will have some more costs than anticipated once you get into it. try to get it at a really low price.

    How do you fix that problem of the cement protruding into the house (the first thing I show in the video)? Do you just make the walls come in more and cover it with sheet rock or molding? I'd really like to know, and if you don't mind, cost estimation? :)

    Thanks,
    -Manuel

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  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    13y

    I would say that cabinets + countertops at $4,500 could be good depending on your area. I just did a kitchen with all brand new cabinets and granite countertops and it was about $4,200.

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  • Ben Skove
    Cincinnati, OH · Member since 2013 · 292 posts · 81 votes
    13y

    Thanks to Manuel and everyone else on this thread. I've found the information to be very useful. Manuel, if you pick this one up, let us know how theory and reality collide!

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    13y

    Nicely done Manuel. I would agree with J's assessment and pay close attention to the items he showed that you missed - demo, finish carpentry, rough plumbing/ electrical, etc.

    The other thing to make sure of is the major items - HVAC, roof, electrical panel, foundation, etc. loos like you are wanting to do a new HVAC system so J was correct that your entire combo price for heat and cool would be around $4k which you estimated higher.

    Time to get that offer in!

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