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:
COST OF REPAIRS CHEAT SHEET
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 $7 to $9 per SF (total SF not under air SF). 1,200 SF house usually a roof will be around $7,000 to $9,000.
SHEATHING If wood boards are rotten underneath and must be replaced estimate $45 per 4 x 8 sheet of wood. As a rough estimate I have found that using half of the price of the roof or $3.50 to $4.50 per SF of roof works well.
Central Air Estimate $3,500 for new A/C unit
Ductwork estimate $800 if there is no ductwork in the house
Paint exterior – estimate $1,500 to $1,800
Stucco exterior of house around $5,500
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 tool shed or items in the back yard $500
Redo pipes $5,000 to $7,500. Some plumbers would quote $15,000 or $20,000
SEPTIC SYSTEM/DRAIN FIELD
$5,000 to $7,000 or more
Remove Fence or Fix Fence $500 to $1,500
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.
Estimate $1,400 to tent a house for termites.
Flooring – estimate $1.75 per SF for installation and $0.75 per SF for materials. Total cost is about $2.50 per SF (under air)
Estimate $1,000 or around $1 a linear foot
Kitchen – estimate $6,500 for kitchen including sink and granite counter top (installed)
Stainless Steel Appliances – estimate $2,000 installed
Estimate around $2,500 per bathroom
Wire an entire house with electric panel $3,500
MISCELLANEOUS PUNCH OUT ITEMS
New doors, locks, ceiling fans, wall plates for outlets and switches
Paint Interior – estimate $1,500 to $1,800
DRYWALL PATCH AND REPAIR
Estimate around $5 per square foot of drywall that needs to be replaced. Drywall costs $10 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 $1,000 to replace insulation
Most houses require just cosmetic repair. You should AVOID houses that need ROOFS, CENTRAL AIR, PLUMBING, ELECTRIC, SEPTIC, POOL etc. because this will really make the repair costs skyrocket.
The best houses to remodel are houses with good roofs, good central air units, nice yards, no plumbing or electrical issues and no swimming pool. If there is no problem with the roof, if the AC 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 $20,000.
Here is the breakdown below
Interior and exterior paint $3,000
Two Bathrooms $5,000
The above totals $20,500 which is what my average house costs me to fix.
This does NOT include stucco, roof, or central air which would need to be added.
You Can Download a PDF Version Of This “Cost Of Repairs Cheat Sheet” Below: