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We have found that the biggest obstacle to our students buying their first house to fix and flip is having a reliable contractor.
We have even found that students sign up for our coaching program just to have access to our contractors!
Having good, reliable contractors to work on your houses that you plan on fixing and flipping is very important.
On the previous blog post I spoke about the importance of knowing how to estimate the cost of materials and the costs of labor.
If you know how to estimate the cost of materials, then you can figure out the cost of the labor.
The best way to learn the cost of materials, is by taking a trip to your local Home Depot or Loews store.
We have a Home Depot Bus Trip at our Fixing and Flipping Houses Boot Camp which is held twice a year in South Florida.
When you go to Home Depot (or Loews) Take a note pad, pen and calculator with you. Allow yourself around 2 hours to go through each aisle.
Go aisle by aisle, and make a list of all of the components for each room of the house. It can be helpful to have a sketch of the house from the property appraiser web site (bring that with you). If you have accurate square footage you can calculate how much tile, paint, and laminate flooring you will need. If you have a measurement of the kitchen and bathrooms, then you can calculate how much your cabinets and counter top will cost and how much bathroom tile you will need.
Take pictures of each item that you would be purchasing. If you don’t already have a house in mind, then just use a house you are thinking about making an offer on, and take the sketch from the property appraiser with you so that you have square footage to work with.
When you get home from your Home Depot or Loews trip, organize all of your pictures along with the Home Depot or Loews SKU number of the products. Save them all in one document that you can access and share easily with others. We save ours in Dropbox and in Google Drive and we make a PDF Version.
Once you have the total cost of materials, you will be able to separate the cost of labor when you get an estimate from a contractor.
For example, if a contractor quotes you $20,000 to do the work on the house, if you know that the materials cost $8,000, then the labor component is $12,000.
If you know how long the job will take them, then based on their estimate you can calculate their hourly or daily labor rate.
In the above example if labor is $12,000 and the contractor says that they will do the job in 4 weeks, then the labor cost is $3,000 per week.
If the contractor has no helper then you can calculate their weekly and hourly rate.
Understanding the cost of the materials is very important since you cannot calculate labor if you don’t know how much the materials are costing you.
Many of our students have asked me for a list of the materials that I personally use in the houses that I fix and flip.
Here is a list of the material list that I personally use and share with my contractors (along with the Home Depot SKU numbers).
Enter Your Name and Email Below To Download A Free PDF Version of the materials that I use on my fix and flips.