James & Tim's VERY off the wall late night discussion-LO

[Account Closed]

NOTE: This Topic was split from the 50% Rule Discussion in the Landlording Forums

Richard I was looking at your site and had some observations and questions. Your an honest and open guy so I am sure your open to a discussion and where I am off and wrong in my observation, you can tell me. Where I have some valid points you can comment as well. Were all here to learn, right?

Richard-Rehab702 current 80k profit deal, before expenses.

s.

150k estimated ARV, less 48k cash purchase, less 35k repairs (although the pictures indicate a MAJOR rehab) equals: 67k before selling expenses and holding costs.

13k shortfall off projection from the start.
Minor math error-could be a years rent if exit was hold and rent.
Or if ones strategy was 100 a month cash flow, that would be 130 months to make up for that mis calculation, or 10.8 years.

A minor math error?

The 35K in repairs includes:
Scope of Work:

Here are some labor time estimates considering Journeyman Labor. Keep in mind its a do it your self project so add 30% to 100% to these figures.
Very hard to figure from pictures.

New Roof 70 Hours
Replace Aluminum Siding with Vinyl 64
New Double-Pane Low-E Windows 25
New Exterior Doors 12
Electrical Upgrade With 200 Amp Service 7 panel only?
Plumbing Upgrade Using PEX 80 ? how extensive?
Tankless Water Heater 6
New Bathroom & Kitchen 120 ? how extensive?
New Drywall 150 minimum complete
New Flooring 35? type-tile inc more
New Landscaping 16 Minimum

Total typical Labor Hours: 585
So 2 guys 36 day sounds right.

Journeyman RETAIL labor: 95 per Hr. Bay Area CA 65 per hr NV?
So 65 times 585 hours equals- $38,035 Labor costs
Keep in mind most do it your self rehabers are going to go way over typical journey man hours.

Say I do ALL of the work my self and I have a modest 70k take home annual earnings. Annual income divided by 12, divided by approx 160 hours a month would be a minimum of $65.00 per hour that my time is worth.

Consider I could have used Journeyman anyways because most of them are not working regularly anyways. In my book, I would have saved 40 an hour if I paid 2 Journeyman 25 an hour each for the entire project.
Could have saved a total of $23,400 by NOT doing it my self!
Being a contractor, this is the ONLY way I can think.

60 and hour gross per guy is my game!

So, $38,035 Labor costs alone.

What is your time worth to you and how do you calculate?
Where are the materials coming from if I am anywhere near accurate?

Another way I see it is all said and done the deal is at just about wholesale cost in the end. Why not just get a property at wholesale and flip? Your into it almost 100k it seems all said and done and estimated value is 150k