OfflineDG Fam... I have been gathering as much info asking other DG members about how they go about calculating rehab costs quickly before making an offer, and thank you all. So I would like to hear more insight from more of you as to how you calculate rehab costs. I know you can use a general contractor to walk through with you and learn to get rehab estimates, but I want to hear your strategies when you do it yourself. (And by the way, calculating per square feet and figuring out the costs per sq/ft...confusing.. Is that sq/ft per room or the entire house?? How do you know how much it is per sq/ft?? Yikes!! I'm all ears DG Fam
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As a general contractor/home builder I have been estimating the cost to build homes for over 40 years. I use an estimating package called National Estimator and it has built in lineal feet and square feet amounts for each item involved in building a house. When you figure the SF or LF of an item it is just of that item such as the LF of cabinets or counter tops. You simply measure from one end of the cabinets to the other and then times that number by the price per LF. If you are figuring carpet it is the SF of actual carpet. If a room is 12’ x 12’ then there is 144’ of carpet in that room. Add up all the rooms of carpet and times by the price per SF. If you are figuring painting it is the price per SF times the whole SF of the house since you are painting the entire house. Tile floors are figured the same as the carpet.
When you are doing wholesaling you don’t need to be perfectly accurate. You could simply use an overall price per SF of the entire house for the whole project. One rule of thumb is $10-12 per SF for a buy, fix and hold to rent project and $20-24 per SF for a buy, fix and flip. In a buy and hold for rental you generally just paint, replace carpet and clean. In a fix and flip you generally paint, replace carpet and other floors, upgraded the countertops, plumbing fixtures and appliances and clean so it cost twice as much. If the roof, FAU or water heater needs replacing then you can take $20-24 per SF and then add for those other items on top of that amount. Roofs are generally around $4 per SF, FAU around $1500 per unit installed and water heater around $450 installed.
If you are buying, fixing and flipping with your own money and thus taking greater risk, I would advise that you get a simple estimating package and use it. It makes it easy to keep organized and print a nice cost breakdown to show partners/investors.
Wow. Good question. Great answer. There is some detail here that I can use going forward. Thanks to both of you for this thread.
Be your very best always-Judy Williamson
What you focus on is where your energy goes-Kristin
With gratitude,
Patrick
Can you provide the name and author of the estimating package you are using.
P.S. - Everything else is immaterial, irrelevant, and unnecessary.
I am confused what does FAU mean?
And thanks for the calculation and name of the estimation package name
When you are doing wholesaling you don’t need to be perfectly accurate. You could simply use an overall price per SF of the entire house for the whole project. One rule of thumb is $10-12 per SF for a buy, fix and hold to rent project and $20-24 per SF for a buy, fix and flip. In a buy and hold for rental you generally just paint, replace carpet and clean. In a fix and flip you generally paint, replace carpet and other floors, upgraded the countertops, plumbing fixtures and appliances and clean so it cost twice as much. If the roof, FAU or water heater needs replacing then you can take $20-24 per SF and then add for those other items on top of that amount. Roofs are generally around $4 per SF, FAU around $1500 per unit installed and water heater around $450 installed.
If you are buying, fixing and flipping with your own money and thus taking greater risk, I would advise that you get a simple estimating package and use it. It makes it easy to keep organized and print a nice cost breakdown to show partners/investors.
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FAU=Forced Air Unit... air conditioning/heating
Valerie
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I thought is was the HVAC, but couldn't figure out exactly what that meant either!
www.tw4homes.com website
https://tvallc.isrefer.com/go/RehabLite/reigirl/ FREE SOFTWARE FOR WHOLESALERS, REHABBERS AND AGENTS! Present professional looking deals to buyers and lenders as well as run your numbers and get the ROI.
hi Valerie,
HVAC = Heating, Ventilation, Air Conditioning
I appreciate the answer that Jan gave.
He’s very knowledgeable and is a great source for advice.
I'd like to also add in that your exit strategy could sometimes affect which calculation method you use.
For example: If I were going to buy a property myself and pay someone else to do the work I could get the contractor to give me a free estimate to work off of.
If I was going to do all of the work myself for a rehab project I could simply create a list of materials, price it all out and then decide how much profit makes it worth working on based on how long it will take to complete the repairs and get it sold accounting for all holding costs.
If I was going to wholesale the property to another investor though I would price the rehab exactly the way that Jan explained previously.
Michael
"No one can be truly successful without helping others to become so as well"
BUMP