Need Help? Call 561-948-2127
Copyright © Lex Levinrad, The Distressed Real Estate Institute™
One of the biggest challenges for new investors who are looking to get into fixing and flipping houses, is the fear of not having a good contractor to do the work for them. I have seen this fear stop investors dead in their tracks, even when they have a good house, and the money lined up to buy the house. The fear of not knowing a contractor that will do the work or how much it will cost will prevent many new investors from pulling the trigger and moving forward on the deal.
Don’t let this fear of paralysis analysis stop you from buying your first fix and flip. The best way to overcome fear is with education and knowledge. Start out today by learning the basics of estimating the material costs by taking a visit to your nearest Home Depot or Loews Store. Allow yourself around 2 hours for this exercise and make sure you take your notepad and a calculator.
Go through each aisle and take note of the material components that you will use for each room in the house. Write down the costs of flooring, cabinets, faucets, counter tops, toilets, vanities etc and go through the store aisle by aisle to make sure you don’t miss anything. Make sure you take pictures of all of the items with your smartphone. Save all of your notes into Dropbox or Evernote or Google Drive or somewhere where you can easily access the information in the future.
Once you understand the cost of each component of your materials costs you will be able to add up all of your materials and have a good understanding of the total cost of your materials. Knowing the cost of the materials is 90% of the battle because once you know the cost of materials, you know how much you are being charged for labor when you get an estimate.
Your job, is to shop that labor estimate!
This “Cost Of Repairs Cheat Sheet” Below Will Help You:
These estimates are based on a typical 3 bed 2 bath home that is approximately 1,200 SF. This cheat sheet is a rough estimate and is based on supply and demand of labor and materials which is dependent on where you live. This cheat sheet is NOT based on General Contractor prices. These are handyman prices. A General contractor would charge about double and would never want this job at these prices.
New roof estimate about $200 per square (100 SF) of roof. A very rough estimate $9 to $10 per SF (total SF not under air SF). 1,200 SF house usually a roof will be around $10,800 to $12,000.
SHEATHING If wood boards are rotten underneath and must be replaced estimate $45 per 4 x 8 sheet of wood but in reality most roofers will charge you around $75. If the roof is really bad and you have to replace all of the sheathing, as a rough estimate I have found that using half of the price of the roof works well.
Central Air Estimate $5,500 for new 2 Ton A/C unit installed with Air Handler.
Ductwork estimate $800 if there is no ductwork in the house. If you need to add electricity that could be another $2,000. The last AC unit I installed with electrical and ductwork was $8,000.
Paint exterior – estimate $1,500 to $1,800
Stucco exterior of house around $8,500
Landscaping, removing trees, depends on house but $500 to $1,000 (or more). Could be zero if the yard is nice. Planting some flowers with mulch etc. estimate $500. Removing a large tree can be $2,000.
Removing tool shed or items in the back yard $500
to put in new plumbing and new PVC pipes could be $5,000 to $7,500. Some plumbers would quote $15,000 or $20,000 so get a lot of quotes and make sure this is done with permits.
$5,000 to $7,000 on the low end. I have been quoted as high as $20,000 but you should be able to get a good company with permits for $10,000 to $12,000 max. You can find people who will do this for way less too.
Fencing can add up. To remove fence or fix fence could be as little as $500 to $1,500. To put new fence around a property in the back and sides could easily run $4,000.
Windows can get very expensive and require permits I don’t like to replace windows. Estimate about $500 to $1,000 per window installed. If the window has be re framed or switching from old style windows to new windows, then it can be quite a bit higher. You could easily spend $8,000 to $10,000 replacing windows. I recently spent $8,000 to replace windows on a 950 square foot house.
Estimate $1,400 to tent a house for termites.
Flooring – estimate $2.50 per SF for installation for the labor. If you are using basic 16×16 Traffic Master Ceramic Tile from Home Depot you can budget $0.99 per SF for the tile . The total cost is about $3.50 per SF (use under air square footage). If you are going to use nicer flooring on a fix and flip like Life proof Luxury Vinyl Plank (LVP) you could be paying $3.29 per square foot instead of 99 cents per square foot. That would increase your cost of materials on a $1,200 house from $1,200
A quick estimate is to add 10% to the square footage and divide by 4. For a 1200 sq ft house, this would be:
For the kitchen, estimate $6,500 to $7,500 max for the kitchen including the sink, faucet, backsplash and granite counter top (installed). If you are going to use quartz it may be higher depending on the type of quartz. A good estimate for the counter top is $100 to $150 per square foot installed, so a 10 foot counter top with a width of 25.5 inches has a total square footage of 25.5 which could cost $2,500. I have paid way less usually around $1,500.
Stainless Steel Appliances – estimate $3,000 to $3,500 max installed for a stove, refrigerator, fridge, microwave.
Estimate around $3,000 to $3,500 per bathroom
Wire an entire house with electric panel $5,500 to $7,500.
New doors, locks, ceiling fans, wall plates for outlets and switches
Estimate $1,000 to $1,500
Paint Interior – estimate $1,500 to $1,800
Estimate around $5 per square foot of drywall that needs to be replaced. Drywall costs $13 for an 8 x 4 piece so that is not that expensive. It is the labor that is expensive. I just paid $6,000 to redo the drywall for a 1,200 SF house which is $5 per SF.
Estimate $1,500 to $2,000 to replace insulation
It’s a good idea to be conservative and add $5,000 to your total repair budget. Things can often be overlooked and you will most likely use up this $5,000 budget easily on overlooked items like roof trusses, attic, patching exteriors, termites etc.
NOTE:
Focus on houses that require just cosmetic repair. This means outdated houses where you can remodel the kitchen and bathrooms, redo the flooring, and paint the interior and exterior of the house. These houses are easy to rehab quickly. The minute you add complexities like needing a new roof, central air, plumbing or electric issues, septic tanks, drain fields, pools etc. then your rehab will take substantially longer, require more permits and cost you a lot more in time and frustration
As a beginner you should AVOID houses that need ROOFS, CENTRAL AIR, PLUMBING, ELECTRIC, SEPTIC, POOL etc. because this will really make the repair costs skyrocket and will test your patience. If you are paying a high interest rate on a hard money loan and you have to wait months for the city to approve a permit this will cost you.
The best houses to remodel are houses that already have good roofs, and have central air unit, with nice large yards, good bones, no plumbing or electrical issues and no swimming pool. For rentals you are better off without a swimming pool. For Airbnb and Fix and Flip a pool is definitely a plus.
If there is no problem with the roof, if the Central Air Works and if there are no roof leaks, no massive holes in drywall, no plumbing issues or electrical issues (which you can easily check by having the house inspected) then your basic repairs for a 1,200 SF house are approximately $31,000 (which is $25.83 per square foot).
Here is the breakdown below
Interior and exterior paint $3,500
Two Bathrooms $7,000
Kitchen $7,500
Appliances $3,500
Flooring $4,500
Baseboard $1,500
Punch Out $1,500
Doors, Locks, Fans $1,500
The above totals $31,000 for a 1,200 square foot house which works out to be $25.83 per square foot which is about what my average house costs me to fix. Please not that this total above DOES NOT INCLUDE stucco of the exterior, repairing exterior wood rot, repairing the roof, or repairing/replacing the central air unit. This is an estimate for cosmetic only. On a house that does not have central air (which would require me to install central air) my typical cost would be another $8,000 which would increase the total cost to $39,000. Focus on cosmetic repairs because if you don’t, you will see your rehab costs skyrocket -ask me how I know that 🙂
See A Video Of Me At a House Reviewing Repairs and The Materials List That We Use:
Materials That We Use For Fixing and Flipping Houses
Do you want to learn how to fix and flip houses?
