All Forum Posts by: David Robertson

Chris provided a very good SOW.  

I have an example SOW in my BiggerPockets Fileplace you can download as an example:

https://www.biggerpockets.com/files/user/drobertson/file/sam...

Hard to believe it's been downloaded over 24,000 times now!

Kiara provided a great summary of the major phases of a rehab.  

One tool that can be handy to help you plan and organize the work is to create a gantt chart so you can easily visually see the order of operations, durations and start/completion dates for the work.  

Here's an example of a typical rehab project that starts with the Exterior Work, then moves into the Interior of the property.

Hmm...those BP reports sure are hard to read, but based upon what I can tell here is a summary of the deal:

ARV - $200,700

Are you sure about this ARV? I looked at comps in the area, and I only saw 1 or 2 comps that sold for $200k, and they were 600 sf larger in a different area? There were a few close by that sold closer to $150k, but appear to have been distressed sales.

Rehab Costs - $21k 

- Are you doing this work yourself?  It looks like you are planning on doing quite a bit of work to the property, but it looks like you are missing labor costs on a few items like cabinetry install, bathroom install, etc.

For example, your bathrooms you only have budgeted $600 for replacing 2 vanities and 2 toilets.  $150 for a vanity will only cover the cheapest vanity at Lowes, and doesn't include any labor costs.

Holding Costs - $150/mo for 3 months?  

- As Myles mentioned, $150/mo is low.  You will need to consider property taxes, insurance, utilities.  According to county records, the property tax is $2,462 per year which is $200 per month, so your $150 doesn't even cover the taxes, let alone utility costs or insurance costs which could be another $300 per month.

3 Months for a flip seems a little quick.  By the time you close on the property, get contractors on-site working, I would expect the reahb to take 2 to 3 months.  Plus 2 months to sell the property, so I think a 5 month holding period is more realistic.

Purchase Closing Costs $10,412 - This actually seems high.  What's causing purchase closing costs to be so high? 

Financing Costs - $0 - Are you using a lender or cash?  If using a lender I would expect to see Financing Costs included.

Desired Profit of $50,000 - This is a pretty big profit for this ARV price range, so you do have a nice profit cushion if the ARV is off or your repair costs come in higher.

Assuming you are comfortable with the ARV at $200k, this is how I would analyze the deal:

Quote from @Dahtanun Combest:

 It seems that most contractors that I speak with are all over the place with these prices 

I would imagine one of the reasons your contractors are all over the place with the prices, is because you haven't nailed down an exact scope of work of what you want.  

If you don't give your contractors a detailed SOW telling them exactly what they should include in their bids, the prices will likely vary substantially because their SOW will be completely different.

For example, in your post you asked a bunch of generic questions, which aren't specific enough for anyone to answer:

How much should a roof cost?  What type of roof?  Asphalt shingle?  3-tab vs architectural?
How much for plumbing?  What specifically?  A new hot water heater?  New piping?  Or just new plumbing fixtures in the bathroom/kitchens?  You need to list out exactly what plumbing work you want done for a contractor to give you an accurate quote.
How much for electrical?  What specifically?  A new 200AMP panel?  New wiring throughout?  Or just new ceiling fans and light fixtures?
How much for HVAC?  Again, be more specific?  A new AC unit or furnace?  Or both?
How much for siding?  What type of siding?  Vinyl siding?  Cement board?
How much to renovate a garage?  What specifically?  Converting to living space?  Or just epoxy flooring?

BuilderTrend would likely be the better fit for residential construction and renovations like home building or client remodels.

Procore is more of a commercial construction platform for large commercial general contractors and likely overkill for any residential operation.  Unless you are running a major commerical construction operation, I would think BuilderTrend would be the better fit for residential construction.

Clearly this forum is being spammed with fake positive reviews.

5 posts posted within minutes by first time posters.

Hopefully @Moderators mark this stuff as SPAM.

Based upon the screenshots of the software it looks like Investor's Edge software is just a white label of Propstream.  It also appears Investor's Edge may have rebranded from their old company name "Do Hard Money".

Propstream screenshot:

"Investor's Edge/Dohardmoney" screenshot:

It looks like BP went back to the old Rehab Estimator tool and got rid of the powered by Kukun version.

Honestly, the Kukun-powered version seemed gimmicky, and wasnt customizable at all.  Maybe it was good for rough numbers, but I can't imagine actually using it to create a final rehab estimate for a project.

Learning about renovation costs is a process that takes time and experience. Here is my boilerplate list of the steps you should take to learn how to estimate rehab costs:

#1 Read the Book on Estimating Rehab Costs

Expert house flipper J Scott discusses the fundamentals of budgeting and pricing rehab costs and reveals the steps, tips, and tricks he uses to accurately estimate costs for 25 common trade categories and hundreds of repairs. The Book on Estimating Rehab costs is a must-read book for new rehabbers that struggle estimating rehab costs for their rehab projects.

Keep in mind, this book is a little dated so the prices may not be accurate today, but it still should provide the basic process of estimating the different trades and scopes.

#2 Walk Through Distressed Properties and Spy on the Competition

Walk through a couple of completed rehabs that a local real estate investor has completed in your local market and study the types of repairs they made and the level of finishes they installed in the property.

Spying on the competition and understanding what buyers are looking for will help you determine what type of repairs and level of finishes you need to install in your own properties.

#3 Explore Lowes and Home Depot to Learn About Material Pricing

Take a tour through Lowes and Home Depot (or their websites) and look at finishes materials and fixtures that you will consider using in your rehab projects. This will help you get a better idea of what tile, hardwood, carpet, plumbing fixtures and light fixtures costs for your rehabs.

#4 Contact Local Contractors For Pricing

Call local Subcontractors and get budget pricing for common repairs on your typical rehab project.

For example, call a roofer and ask what their average cost per Square of Architectural Asphalt Shingle Roofing would be on a 1,500 sf house, with a 6/12 pitch.

#5 Build Out Your Database in a Spreadsheet or Estimating Software

Once you start to get a better understanding of Labor and Material costs you will want to store this data into a spreadsheet or software that you can use to help you streamline the estimating process.

#6 Practice, Practice, Practice

Walk through distressed fixer-upper properties (or find properties virtually online) and practice creating detailed scopes of work, quantifying repairs and estimating rehab costs for the projects.

This will help you get acquainted with common rehab repairs, rehab costs & estimating terminology.

#7 Get Your First Rehab Project!

You can practice all you want, but ultimately you will learn the most about estimating rehab costs by actually rehabbing a house. Getting your first rehab project will require you to create a SOW, talk to contractors, compare and review bid proposals, review budgets, & make countless trips to Home Depot.

You will inevitably make mistakes and underestimate things, but you will learn 90% of what you know by just doing your first rehab!

#8 Learn from Your Experience!

Once you complete your first house flip project, take some time to review your actual costs that you spent on the project and compare it to your initial estimates and budgets.

Reviewing your final numbers will help you gain a better understanding of how much you actually spent in each Category and identify areas where you underestimated cost and blew your budget.

When you buy your next house flip project you will have this valuable learning experience to help you build a more accurate estimate!

As your continue to do more and more houses, you'll gradually gain more experience and be able to develop accurate estimates quickly and confidently!

Hi Michael,

Learning about renovation costs is a process that takes time and experience. Here is my boilerplate list of the steps you should take to learn how to estimate rehab costs:

#1 Read the Book on Estimating Rehab Costs

Expert house flipper J Scott discusses the fundamentals of budgeting and pricing rehab costs and reveals the steps, tips, and tricks he uses to accurately estimate costs for 25 common trade categories and hundreds of repairs. The Book on Estimating Rehab costs is a must-read book for new rehabbers that struggle estimating rehab costs for their rehab projects.

Keep in mind, this book is a little dated so the prices may not be accurate today, but it still should provide the basic process of estimating the different trades and scopes.

#2 Walk Through Distressed Properties and Spy on the Competition

Walk through a couple of completed rehabs that a local real estate investor has completed in your local market and study the types of repairs they made and the level of finishes they installed in the property.

Spying on the competition and understanding what buyers are looking for will help you determine what type of repairs and level of finishes you need to install in your own properties.

#3 Explore Lowes and Home Depot to Learn About Material Pricing

Take a tour through Lowes and Home Depot (or their websites) and look at finishes materials and fixtures that you will consider using in your rehab projects. This will help you get a better idea of what tile, hardwood, carpet, plumbing fixtures and light fixtures costs for your rehabs.

#4 Contact Local Contractors For Pricing

Call local Subcontractors and get budget pricing for common repairs on your typical rehab project.

For example, call a roofer and ask what their average cost per Square of Architectural Asphalt Shingle Roofing would be on a 1,500 sf house, with a 6/12 pitch.

#5 Build Out Your Database in a Spreadsheet or Estimating Software

Once you start to get a better understanding of Labor and Material costs you will want to store this data into a spreadsheet or software that you can use to help you streamline the estimating process.

#6 Practice, Practice, Practice

Walk through distressed fixer-upper properties (or find properties virtually online) and practice creating detailed scopes of work, quantifying repairs and estimating rehab costs for the projects.

This will help you get acquainted with common rehab repairs, rehab costs & estimating terminology.

#7 Get Your First Rehab Project!

You can practice all you want, but ultimately you will learn the most about estimating rehab costs by actually rehabbing a house. Getting your first rehab project will require you to create a SOW, talk to contractors, compare and review bid proposals, review budgets, & make countless trips to Home Depot.

You will inevitably make mistakes and underestimate things, but you will learn 90% of what you know by just doing your first rehab!

#8 Learn from Your Experience!

Once you complete your first house flip project, take some time to review your actual costs that you spent on the project and compare it to your initial estimates and budgets.

Reviewing your final numbers will help you gain a better understanding of how much you actually spent in each Category and identify areas where you underestimated cost and blew your budget.

When you buy your next house flip project you will have this valuable learning experience to help you build a more accurate estimate!

As your continue to do more and more houses, you'll gradually gain more experience and be able to develop accurate estimates quickly and confidently!