I have flipped homes with no repairs in the past. However, I am very uncomfortable looking at deals with older homes, or homes with major repairs. Could anyone recommend a good source to begin my education?
What could I be doing to familiarize myself with repair costs? Any books, courses?
Thanks,
gregg
Hook up w/a rehabber at your local REIA and ask to physically see their properties from beginning to end…and ask questions, about costs, etc.
Build your team to include a general contractor or handyman or two. Have them go through the properties with you and educate you. Pay them for their time and/or give them the job when you purchase.
Chris
Get pricing for big items like…
Price per square for a new roof installed (Architectural shingles, roofers love 'em because they don’t have to line up the tabs)
Price to tear off old roof per square
Price for a new furnace installed- forced air, and for a water boiler (baseboard heat) system.
Price for replacement windows installed (based on size of window)
Price per square for vinyl siding installed
Price per linear foot for new kitchen cabinets (an idiot can install kitchen cabinets) Can you screw a box to a wall?
Flooring installed, for hardwood, vinyl, tile and carpet/sq. ft.
Painting, interior and exterior per sq. ft.
Now NONE of these prices are going to be set in stone, their BALL PARKS. Add at least 15 to 20% to each and you should have a decent estimate for repairs in very little time. Compiling these numbers from different contractors gives you a great way to compare price in addition to estimating repairs when a project is out of your comfort zone…
I learned how to do many repairs, as my dad was handy, and insisted he does everything himeself. The job market was bad the year I graduated college, and I volunteered to rehab his property, free labor, with him supplying the materials, after watching and helping him for years, as a young boy. I rewired, put in new fuse boxes (this was before circut breakers), ripped down ceilings, walls, redone them, installed doors, and framed new doorways. Took me a good nine months, playing around, and had a lot of fun.
Yet, when I went into REI, I hired folks to do all the rehabs. I find I’m slow, somewhat of a perfectionist, and with a high paid professional job, it’s more cost effective to hire people to do the work. REI is a business, and I can’t play around 9 months.
Speaking of slow, I had a tenant once, who gave up on moving to a rental down the street he liked better, when a neighbor landlord started to renovate an apartment, doing a gut rehab. Unfortunately, the guy was at it already for NINE MONTHS. I priced low end gut rehabs for rental units then, found I can get one done at the time for $12K to $18K, including materials, depending on the quality, in less than a month’s time, with some even quoting two weeks. At the time, apartments were renting at $1,000/month, and this guy already lost $9,000 in rent doing it himself ON WEEKENDS, with a ways to go yet.
The way my dad learned it was he only hired someone once to do the work, watched him every step of the way, then do it himself. He did electrical, steam pipes, gas pipes, water pipes, plastering, whatever. Amazing. Then he hung around the local hardware store shooting the breeze, asking questions on a lot of stuff.
But, as a commercial property owner, often, he also had to hire people to do work, having a business of his own to run, and I find when he interviewed contractors, he asked questions that he knew the answers to himself. He explained that it’s his way of figuring out how knowlegeable someone is, and whether he got an honest and correct answer. Acting DUMB, he finds. he smoked out a lot of con artists.
There’s NO BOOK that I use. When I need a roof done, I interview a good number of contractors, get a price, and the best approach for each. Same for siding, kitchens etc.
Often, one guy has an approach that another did not think of.
One example is I got an ugly looking overhang at a front entrance of a neglected rental that I bought. The plywood encasing wasn’t painted for a while, and totally delamanated. The first few guys looked at rebuilding this ugly structure for $1,000, or more.
A neighbor landlord had the same problem, and his guy was going to do it for $200.00 He then spoke to his contractor, and the guy said, if we did the work at the same time, i.e, two jobs together, he’ll do both of us at $180/each.
So I asked the guy to come over, and he explained that he’ll cover the ungly stucture up with stuff used for siding houses. The reason he can do two jobs cheaply is he’ll have less waste, and less running around.
So I had the job done, and when one of the original $1,000 contractors called, told the guy I had it done for $180.00. Not believing me, said he wanted to come by with his partner to see the finished job for himself.
They came and looked. The contractor’s partner laughed and said “Joe, the customer said the front looked ugly, wanted it looking better, he didn’t ask you to rebuild his house!! Looked very nice for $180.00”.
Often, it pays to get a number of opinions, and approaches from various professionals. Books are not going to help you. here
Thanks fellas. Really good, usable advice. Im looking forward to getting a small rehab under way, shortly
Check out your local Comm. college, ours offers a “Residential Construction Estimation”.