All Forum Posts by: Mateusz Prawdzik

@Regina Jones I mean there is no 2 minute formula to estimating rehab costs. You just have to know what it costs to fix and what you can get it done for. It would make it so easy to estimate costs if there was a formula but unfortunately there is no such formula so you need to get a GC to come give you an estimate or you have to learn the trades and what it costs to do the work and the rehab. @Kenneth Williams

@Jack K. I would stick to a less aggressive market like NJ, even though it is still aggressive, it's less hot than NY. Also, cap rates are garbage right now, back 2-3 years ago you can buy for 12-15% cap rates and it was great, now people are jumping for joy at 5-6%. With house prices going up, cap rates go down, they are indirectly proportional. So I would flip and use the increasing appraised values on houses in most markets in that advantage and flip until I can. I am personally feeling a pull back in another year or two, at which point try to sell all your inventory, sit on cash and wait for that pull back and then buy at 10-12% cap rates where everyone else was buying at 5-6%. 

This is my theory and what I am planning to do to the tea. I am getting 15-16% cap rate buy and holds from special people that I know, but most people are paying very heavy premiums. I will only hold if I get a return like that, otherwise I'm flipping. I would do this if I were you, connect with me if you any questions about the market in NJ, I do most of my business in North and central NJ.

@Account Closed said, Renovations are really detailed oriented because of the fact that you have to focus on stuff that you can save and can't save, if you do total guts or add-a-levels or new constructions, everything is new so it's very easy to deal with.

Renovations are pick and choose, if you can save it, clean it, and put it back, you do that. My $/Sqft is just what NJ prices typically go for, and it's a guideline to go for numbers based on. I wouldn't fixate too much on that, because renovations are very specific to each individual line item.

@Account Closed Renovations should be usually 60-75$/Sqft and new construction is usually 125$/sqft. 

@Account Closed So just proceed like I said above. This is basically the order, some things can be done out of that order, you'll see which order works for you and which doesn't, you'll learn really fast the more screw ups you do. Just make sure that you get someone that knows how to do replacement windows, because lots of people have no idea how to do replacement windows. 

@Account Closed What kind of rehab is it? That all matters, is it a simply fix or is a total gut job? Add - a - level? First thing is plans. Measure windows. Order windows (usually takes 2-3 weeks alone). Get Permits, Demo, Framing, Rough (plumbing,HVAC, Electrical) , Roof (if needed) Inspection, Insulation, Siding Get Layout and Order Kitchen Cabinets, Sheetrock, Spackle, Primer, Floor installation, Order finish Material, Molding, Doors, Granite Pricings, First coat of paint, Install cabinets, Order Granite (2-3 days). Install finishes, Second Coat on walls, Stain floor, Touch up moldings, landscaping, driveway paving, etc... 

That is basically the order, somethings don't need to be in that specific order, but that is basically how I do it. I might be missing some stuff but that is how much I thought of in 30 seconds time. 

Let me know if you have any other questions or concerns, I will go into detail about any one of those.

@Manolo D. Thanks for the answer hahaha. I am looking for something more specific. I am doing my math on 20-75$/Sqft, I usually don't look at this calculation because I don't build lots of new constructions but I am taking a flip that requires a slight foundation addition and I would like to see what people get their foundation for.

@Andrew McManamon I started where you were just 10 months ago, and I must say that experience and just getting into the business is the most important thing. Even if you don't know what you're doing, just start and connect with people that will direct you in the right direction. I would do D4D (driving for dollars), write down address that are or looked distressed or like people don't care about them, and then go and make a list for yourself to mail letters to. You don't need much money to get started, if you read some of my posts where I tend to preach about this you will see that money isn't everything in this business, tho it is a big part to it. What you can also do is bird dog or look for leads for investors or wholesalers. So same concept, drive around, write down addresses and instead of you sending letters and doing the work, you send it out to wholesalers and they pay you a fee if they close (usually 500-1000$). Now I never did this because you want to learn as much as you can, and handing over leads to someone doesn't teach you anything.

If you have any questions, connect and ask away. I was just where you are not too long ago and I have grown quite gaining lots of experience in the process. 

@Genail Anderson As much as I hate to be blunt (I don't, I love it) can't help you. You need someone that knows prices in your area for labor and materials. Plus you have no pictures or anything, it's a guessing game like this. No one will tell you anything that will be useful because there are too many question marks. Just get a GC or a handy man to get you an estimate in your area. I can tell you what it costs in NJ to do it but that wont help at all. 

@Jacob Graul @Ronny TiburcioAS much as everyone is saying read a certain book, the question is if you want to start flipping or renting. Flipping is different everywhere, rehab prices are different everywhere. I go 30 mins up north and already I am going to be paying x10 more, I can't even imagine if I was going to travel across the US. Now there is a common approach to REI but I wouldn't follow everything exactly word for word because any where you go the market changes and everything changes about the market and the rehab.

When it comes to numbers of analyzing deals, the first thing to master is rehab cost and the only way to do that is to go and do it. No book, no forum, no podcast, no nothing can tell you about rehab costs because they vary so much everywhere. I just posted a discussion about foundation prices per sqft because I know all my prices except this one because it varies so much from job to job. 

What I would do is just go out there, meet investors that are flipping houses, and ask them if before they touch anything if you can go and do your numbers. They won' wait for you so as soon as they give you permission you and do it. I did that when I was first starting not too long ago and now I am a master at it. I know my crew and I know what I can get done for what price. 

I don't know much about rentals but I am sure it's just as variable as flipping analyzing is. I know a little bit about cap rates and estimating vacancy rates and incorporating that into the cap rate but I am not a pro at it as I don't buy and hold yet, but maybe soon I will.