Hi looking to do my first fix and flip purchase price is 95k …I Need advice from a contractor , or anyone who has information on a estimate on a remodel of a 2bed 1 bath 829sq ft Bungalo
Honestly, it sounds like you need to find a local contractor. Get an idea of what the max you can spend on the rehab is and then find 3 or 4 solid contractors you would consider working with. Have them meet you, walk the property and put together a written estimate. Maybe there is a local REI group you can get some suggestions from?
I would recommend getting a few quotes from local contractors. Also try to find a local Real Estate Investor Association where you can network with other investors and get contractor recommendations from them.
I am a highly experienced fix and flipper who is also a contractor. You can figure about $35 per square foot or $29,015 plus carrying and overhead cost's.
This is provided there are no major roofing, electrical, plumbing or mechanical replacements required with the remodel. If your going to have a General Contractor perform the work include about $7,800 in contractor overhead and profit.
Figure about 6 to 8 weeks from start to finish to complete!
Where are you located?
For new investors, you will need to assemble a team of contractors (some specialist, such as HVAC, electrical, roofing, etc., and some generic, like general contractors or handymen) that you can trust and "learn’ from them. Pick their brains, ask tons of questions, observe their work and learn what it takes to rehab a property.
What worked for me 19+ years ago when I did my first flips (and still practice this) is to walk the property ALONE, IN EVERY ROOM, including the basement, and make notes in each room what you hope to have accomplished during the rehab IN THAT ROOM (ex: replace light fixture, replace interior door, door hardware, repair drywall, paint interior walls/ceilings, replace kitchen cabinets, etc.).
Walk the entire property this way and then create a sheet that reflects this for each area of the property. Then, schedule walk throughs with contractors and cover each area of the property the same WITH THEM, while pointing out in that room what is to be improved during the rehab. This will make it very clear to the contractor what you hope to accomplish during the rehab, so that they can accurately prepare an estimate accordingly. I have even supplied a total of light fixtures, door knobs, outlets, etc. to contractors to be precise of what I want. Be open to the contractor’s suggestions during the walk through and “ask questions” of how they would best help you to get maximum value for the flip, remembering that typically values are gained in renovating baths & kitchen areas.
Get multiple bids from various contractors, compare them and then negotiate accordingly. Eventually, after doing enough flips, you will get a system in place and understand what the average cost is for replacing certain items during a rehab based on the local standards (ex: price to replace an interior door with hardware, price to replace a standard sized window, etc.)
Hope this helps.
Just starting out I used the numbers of 5k for plumbing, 5k electric, 5k HVAC, and 10k for Roof. I would just use round numbers for 3/2 1300 sq. ft and below in Florida market. These are not hard numbers but can help you determine if the deal is viable quickly.
Every markets will vary considerably, I would get bid from multiple contractors. Sometimes their bids will vary based on level of work they have at the moment. Always obtain multiple quotes for services needed.
Hope this helps!
I am a newer real estate investor as well and was also looking at a fix and flip/wholesale properties in MN. I came across a 2b/1b 826 sq ft home. Similar to what blanketrealestate opened up this forum with. I knew the property need some work, but I was shocked at what my first contractor came back with for an estimate.
[li]New electrical - $10k
First floor laminate floors, carpet upstairs - $6k
Cabinets/counters - $7500
Plumber/fixtures - $5k
Front porch reframe,paint, decking - $10k
Replace 4 windows - $4500
Demo/haulaway - $8k
Garage roof - $2500
Drywall repairs and paint- we planned on opening two walls - $8k
exterior paint - $4k
Doors, trim, base - $5k
They estimated $70,500 total
I would need to add another $10k for a contingency factor in case something else came up during this process.
An $80k renovation is almost $100 per sq ft. I just feel this is really high.
I am looking to bring in another contractor for a walk through to see if I can get this number closer to $55k.
Here are the numbers:
Owner is asking $129k
ARV - $194K
I need to buy at $80k for this to work for me with a reno that needs to stay under $60k. I am looking for at least a 15% profit on the ARV.
I just thought I would just share some contractor numbers for me on an 826 sq ft property in MN. I will try to update here if I can get another contractor to walk this property with me.[/list]
Way, way, way to high! That contractor wasn't sipping moonshine or smoking the good stuff was he? With that said I will give you my advice and just kidding about the contractor!
I have been an investor and in the construction industry over 40 years, I have seen it all the good, the bad and the ugly. My company is able to perform as engineering, commercial and building general contractors in all 50 states, but I no longer bid projects or do work for the public as I only work on my own projects, however I have consulted with numerous people over the years to help where I can.
In Minnesota you have really cold winters which doesn’t stop construction but significantly slows it down. Summer is when most contractors make 75% of their money, breaking ground right before or after mud season and working until the snow starts flying in late October or early to mid November.
If the contractor is stacking up contracts and has a fairly full schedule he will raise his prices because he’s willing to take the work at a higher price but doesn’t need too to keep his subcontractors and / or crews busy. Mostly contractors want to at least be weather tight, finished on the exterior and heated inside to complete finish work.
Your small remodel should only take 6 to 8 weeks to complete so it’s not like building a big custom home or building a good sized commercial building, but it’s work none the less. Try to find a small remodeling company rather than a new construction general contractor, you’ll find a much better price with a company running crews to remodel as apposed to a general contractor who sub’s all his work.
Remember every subcontractor wants materials, labor, burden, overhead and profit where a remodeling company who has talent in all trades is only looking for overhead and profit basically one time. A remodeler may sub roofing, HVAC, plumbing or electrical but pretty much handles everything else with their own crews.
I don’t know where you are in Minnesota if your in a really small town it can be rough to find a remodeling contractor with his own skilled labor but in a good sized town or city it should be easy. You will also save money if you buy big ticket items directly and coordinate delivery with the contractors schedule as it will save the contractor labor to handle getting it to the job and there will be no additional material overhead and profit added to your project cost’s.
Your not only going to need a contingency but will also have to carry your real estate loan, utilities, insurance and taxes while under construction. Don’t leave any materials onsite over night with out securing them or installing them that day. Too many well intentioned people lose big money due to thefts and vandalism.
You should be able to do this little house for $40k to $50k. Make sure the contractor provides a thorough contract, scope of work and schedule before you sign anything!!! Payments should be in arrears so contractor works and is paid every 2 to 4 weeks depending on weather a bank loan is involved with draws or not? Make sure your contractor is securing the house (should be in contract) and that he has insurance to cover theft loss or vandalism (stated cover theft or vandalism in contract)!
Now if you have a lot of major replacements you could run $60k or more by the time you replace major big ticket items. I can be reached through the PM system in REI Club if you have questions.