how are most of you figuring out you cost on projects .Excel? and how are you setting up your formulas to come out with a projected profit
Forget the computer.
This is a meat and potato’s business.
I’ve been in construction my whole life. If you can’t estimate repairs, a computer program is worthless.
Get hooked up with a good contractor who specializes in rehabs. Have HIM give you a quote, then you know what to pay for a property.
Here’s the deal. If your purchase price + repair costs don’t come up at least 40% under area comps for houses in good shape, forget it and move on. Remember in this market you really need to UNDERPRICE your homes, or be ready to hold them while they compete with everything else out there. That can get very expensive for you. Don’t forget the 6% realtor fee. That’s a big number if your like me and in the Northeast where houses start at $250,000.
You should use a tool for your estimates. If you just rely on contractors, you’ll never learn what your cost ranges should look like or how to properly calculate repair costs.
We use excel to see the numbers and factor in extra costs. If you don’t use an analysis tool, you also won’t know where you’re going wrong/right and can’t analyze what happens after a deal is done. There are programs out there, but excel is pretty customizable. Every project has a sheet that we can send to other investors, partners, buyers, etc. After a while, you notice that certain costs are within a range.
Have a contractor do a quote. Have that quote done as labor and materials, and as just labor. Ask to have a complete materials list given to you. (You will likely have to pay a fee to have a contractor do that detailedof a quote).
Take that materials list and put it into a spreadsheet, print it out and take it to your local home improvement store. Find the items on that list and write the prices on your list.
You can’t estimate a repair without knowing what the materials costs. At least by having both the contractors estimate and your materials list, you can have a good idea of what a repair will cost.