Background: I have been in the real estate industry for around 10 years as a mortgage originator but only as an investor wholesaling since February of this year. I really want to get into flipping but I just can't seem to get on the same cost page as the contractors I talk to. lol
In my research I keep coming across this "$20 per sqft" rule that is suppose to give you a mid range kitchen with hard surface countertops, tiled up bathrooms, and a fresh coat of paint on everything else. Add $10 per sqft if you go with high end materials like granite etc. That number doesn't seem to jive with most of the estimates I have been given though. I know you have to pay for quality but I don't think I should have to pay retail for quality if I am also providing volume as a compensating factor.
I feel like there are opportunities that I am missing out on because I don't have a good grasp on estimating rehab costs. I am good at spotting what work needs to get done but not good at pricing that work out off my head. Do I just need to find different contractors that match the "$20 per sqft" model or is that rule of thumb just a wives tale?
Hey @Michael Lewis you should definitely Check out the book on Estimating Rehab Cost by Jay Scott. its an amazing resource and answers a lot of the questions you are running into, I was in your shoes a couple of months ago and it has been an amazing resource. You are absolutely right when you say the numbers just dont jive with the estimates, it could very well mean you are being overcharged, but the best way to find out is to get several quotes with the breakdown of each repair and see where the variances come from. that way you can better negotiate your prices based on the going rate for each. the better the quality the more expensive the job, but when you find a good Contractor, that does on time quality work, your ROI may even be better.
would definitley love to hear what others have to say, great question!
Good luck to you!
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