I am quite ignorant in estimating repairs. I have gone through a few properties (haven’t rehabbed one yet) with contractors and not really sure of how they estimate what needs to be repaired and the cost. My ignorance in this area is killing the deals for me. I think the contractors quote too high and consequently my offers are so low that they get rejected (not to mention the money I pay to the contractors for the visit to the property.)
Where can I get training to become a really good estimator, so I can estimate the repair costs reasonably well myself and make good offers?
Real life experience is going to be your best teacher, Syd. It takes a while…sometimes you’ll do weel/sometimes you won’t. But, you WILL get better at it. You can get a pretty good idea by taking it (whatever it is), seeing how it works and then pricing out the repair/rehab piece by piece and keeping track of the labor hours…
You might get some classes at the local Tech school/community college on how to do some of the work and some of the estimating…
I signed up for a “Rehab Tour” class. I have my list of questions I will ask in that tour. For rehabs, everything boils down to how much will it cost to bring the property to the marketable level. Once you know the cost-number, you can match that with your conservative revenue-number, then make a decision on offer. It’s the cost-number I’m having a problem with. Hopefully, I’ll master it soon.
I used to trust contractors on rehab costs. After a few deals, contractors being ahead of me on the money, etc., I learned very quickly how to figure out some of the rehab costs myself.
Do not let the contractor know that this is your first house…if it is. Always be honest, but do not volunteer information that you are a beginner.
For certain things, such as tiling a bathroom. Use your common sense, along with a few questions to the contractor.
You need to rehab a full bathroom.
Demo: Figure about 2 Hours at $40 per hour. = $80.
Tub: $200 to $1200…depending on if it is a whirlpool tub or not. We will use: $600.
Toilet/Seat, etc.: $200.00
Let’s say that the bathroom is about 8’x10’ or 80 sq. feet. of tile.
Tile Materials cost…with all of the transportation, grout, etc = $3.00 per sq. foot or $240.00
Tile Labor: 1 Person, 2 work days(example) 16 hours: $30 per hour = $480.00
New Vanity/Top and Mirror: $750.00…includes install.
New Accessories and labor to install accessories $350.00
So: Our new bathroom renovation is: $2700.00
A good contractor would probably charge 30% to 100% higher than this.
So expect the new bathroom to be $3600. to $5400.00
This is just an example for certain things where you can estimate stuff.
Kitchens would be the same exercise. I usally pay about $75. to $100. for install on each kitchen cabinet installed…then I purchase the cabinets myself.
I shut my real estate investing down for a few months and decided to put an ad in my local newspaper for my painting services. This totally helped me to understand contractors and their prices. As a professional painter I figured for a residential job I would want at least $200 a day. If I bid on a job that took me 3 days to do, I would bid it at $600. That would include them buying the paint and me using my own supplies.
When working with contractors the more clear you are with them the better. I always get at least 2 contractors in to bid a project. I also make it clear on the contract whether or not I am supplying the materials. Then we agree on a time frame, and in the contract it states that for every day past the agreed time I take $150 a day off the total I owe them. I could go on and on… but the bottom line is to make sure you pay by the job, and definitely not by the hour.
Im interested in flipping property this year, and I know I will be dealing with many contractors and sub-contractors that will try to hustle me out of my money. What are some free contract forms for contractors that I can get that will allow me to report all that is going on, record all cost, display timelines and objectives, and calculate what my expenses will be total after everything has come to a close.
I hope I can shed some light and knowledge on my fellow investors. I am an investors and Rehab contractor. I currrently have 3 of my own projects and working on 2 for different invesors.
My background, construction and project management. I went out on a mission 2 years ago to recruit and mold existing contractors to work under my pricing scales. I currently teach fellow investors how to estimate repairs.
It can be learned but I agree with the gentleman earlier said, you need to be involved with contractors to get the hang of it. If you plan to ever do your own rehab, don’t wait till you start one to learn, buddy up with fellow investors that are doing one and offer to help them for free for maybe 1 or 2 hours a day. You learn and they get some help for free. WIN … WIN.
The math is simple. Add, subtract, multiply, divide. Basic geometry (length x width=sqft), linear feet, and units (or eaches).
The rest is understanding how much stuff costs. Example; you want tile, go to the local hardware store and see that they sell it in SQFT prices. The contractor installs it in SQFT prices as labor. Add those 2 together and you have a cost. Now what you should do is shop a few stores to find out different price ranges. Then you look in the local phone book or contractor list and ask them to give you the installed labor costs.
BEWARE: there are 2 kinds of contractors 1)REMODELERS (high priced) 2)REHAB CONTRACTORS (good for investors).
ADVICE: after you have priced out what tile (example) labor costs normally. go to your local stores or distributors about 6 or 7 am, take a box of doughnuts with your business card. Ask all the guys in there shopping that you are looking for contractors to do some work. You will find that those guys will beat the prices from the people you call in the phone book or advertisments. THOSE ARE YOU KEEPERS!
I teach in Houston Texas. I also give away a free estimating spreadsheet that is based in Houston type work. I will try to answer any questions that you have.
I know that you are and that is good and being new is not an excuse I know that. I was just saying I am not perfect as you and everyone else and there is no reasons for Danny to react like he did just over the top. I am sure he has made a mistake himself as you and most of us had. This is a good site like the home inspector one I get on as well they are almost identical which is great. Sorry again I forgot and make a mistake. Thanks Kelly Lyles
I can stand all the heat. I know it was not towards me. If you think I was a SA then I am sorry you took it that way and it bothered you soo and did not mean it that way thegreat. Again ones like you do help the site for sure. You are right lets drop this nonsense and learn as I know I need it for sure. again thanks. I will read and learn how the ones that have used this site the most get around the rules in the different wording that means the same thing. Legal reasons I am sure. Again thanks for the reminder truely.
We have something similar in our contracts. The other thing that we’ve added is: “If you fail to show up twice without notifying us the day before, you will be terminated and any funds due to you will be null and void.” We did this because we know a contractor (friend of a friend) that will put his crew on a site until it reaches the halfway point (when he gets the first half of the money) and then he pulls the crew and moves them to a different job (again to the halfway point). He leaves his original job hanging until he has the time for them.
One thing that does help is requesting that any estimates are done with material and labor seperated. This gives you a better idea of where the money is going. Keep in mind that the labor portion maybe higher if you provide the material than the labor combined with materials quote.
To all that is good stuff and have not thought of the no show notice at all that is good but have the $$ for going over the finish time. What do yall think about a bonus for fininshing early for the same amount of finishing late. You would have to know I recon if they are bidding to much time to get it. Thanks in advance.