How do you set up the contract?

General Real Estate Investing
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Aspiring REI (newbie) asking several questions:

  1. How do you figure the actual costs of utilities, insurance, termite fees, total acquisition expenses, and property taxes?
  2. how do you figure in the “costs ovverun”?
  3. what would a “survey” do for the budget?
  4. Total fix-up costs- would that be the same as the repair price( rehab)?
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  1. How do you figure the actual costs of utilities, insurance, termite fees, total acquisition expenses, and property taxes?

In Texas you can call the power company and they will give you the actual month by month bills from the past year utilities, I would call my insurance agent and get a quate on the house and get an exterminator to give you hard quote. you can know these numbers cold. Property taxes can be had on the county website using the property address.

  1. how do you figure in the “costs ovverun”?

The best way to avoid over runs is to use a good project scope. The more time you spend defining the scope, (and stick to it) the fewer over runs you will have. You can, however, look at 5% over on the contracted work over time. I am anal, I figure to the light fixture make and model and have very few over runs. I also buy houses that are almost ready to move into.

  1. what would a “survey” do for the budget?

I only do serveys if they are required by the title company. I have not had to so far. They are in subdivisions and they use the plat for the closing.

  1. Total fix-up costs- would that be the same as the repair price( rehab)?

That would be semantics. I look at the purchase price plus all the costs that are going to make the house move in ready, and I call that they cost of the house. BTW I use that figure to take to my mortgate company.