Have you seen this too?

[Gabriel Miritello]

Hey everyone so I am relatively new to my recent arean of investment. Though I lived and owned a home for 7 years in Savannah, Ga, I moved this year and now am an out of state investor. I purchased a 3/1, 1100sqft, sfh for around 85k. I estimated rehab, based on my experience living there for 7 years and construction I did in a different state (az), to be about $22k(expecting i could be a little GA, being its my first true reno). Paint inside and out, bath and kitchen remodel are the main items. ARV is in the 120-135k area- not a smoking deal but gets my foot in the door I felt for the area.

However after closing and having multiple contractors come through I find myself scratching my head. 1st estimate was 19k....but did about 75% of SOW. 2nd estimate was $50k. 100% of the work. 3rd and 4th est were $100/103k. 😳😳😳

My home is not the only one under construction in the area and I don't know if these guys see an out of state investor and think I'm an idiot but these prices seem insane. 

I have brought on a project manager, friend in the local market who does some reno work, and we have begun going job by job and I'm seeing the same thing.

paint- 3k,4k 10k, 20k.....lol 20k what the heck

Plumber - 3k, 10k

My question to you:

Are you seeing crazy numbers from contractors in your area too? Are you getting estimates that just do not make sense? I feel these people are wasting mine and their own time. 

Please advise to help manage future expectations and so that I know the next deal I find has to be $17k purchase with a $103k reno to have a $110k ARV SFH.

TIA

Gabe

[Mike Thompson]

You’re seeing the side effect of too much work, not enough contractors and inflated cost for supplies to do the job.  They’re raising their prices because they’re booked up.  They don’t actually need your job (usually).  And.  People are paying the higher price.  (Anticipating a higher sale price in the sellers market).

So.  Either find someone who isn’t normally a contractor, do it yourself, or get someone who is new to business who needs the work (and still expect to pay extra).

Or.  Just sell it as is!