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Updated over 1 year ago on . Most recent reply

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67
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Corbett Brasington
  • Rental Property Investor
  • San Antonio, TX
28
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67
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is 1/3 materials, 1/3 labor, 1/3 profit still what most GCs expect?

Corbett Brasington
  • Rental Property Investor
  • San Antonio, TX
Posted

I am asking this question for two reasons:

1.  Is this what a healthy project looks like to a GC?  Markup recommendations are all over the place from 20% to 67% and I don't know what is reasonable.  I don't want to deal with contractors that need me to float their working capital with large deposits.  I want contractors who have enough markup and a proper payment schedule to reduce the upfront load to me (allows me to scale more).  

2.  Finding reliable "how to estimate repair costs" has been a roller coaster with how much the cost of things have changed.  I have no heard that cosmetic rehabs are $30ppsf and full guts are $60ppsf and new builds are $125ppsf, I don't know what to trust.  I want to create my own templates for scope of work with real numbers from a big box store.  If the 1/3, 1/3, 1/3 is reasonable I can take the entire cost of materials for the whole house and back into the cost of hiring a GC.  

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Chris Seveney
  • Investor
  • Virginia
15,308
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17,776
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Chris Seveney
  • Investor
  • Virginia
ModeratorReplied
Quote from @Corbett Brasington:

I am asking this question for two reasons:

1.  Is this what a healthy project looks like to a GC?  Markup recommendations are all over the place from 20% to 67% and I don't know what is reasonable.  I don't want to deal with contractors that need me to float their working capital with large deposits.  I want contractors who have enough markup and a proper payment schedule to reduce the upfront load to me (allows me to scale more).  

2.  Finding reliable "how to estimate repair costs" has been a roller coaster with how much the cost of things have changed.  I have no heard that cosmetic rehabs are $30ppsf and full guts are $60ppsf and new builds are $125ppsf, I don't know what to trust.  I want to create my own templates for scope of work with real numbers from a big box store.  If the 1/3, 1/3, 1/3 is reasonable I can take the entire cost of materials for the whole house and back into the cost of hiring a GC.  


 It is typically  closer to 50/50 on materials and labor, but that depends on the level of finish for the materials and what the scope is. Kitchen appliances can be $10k or $100k... So they can ramp up materials quickly.

I would say 50/50 for labor materials and profit from 15-30% depending on contractor. 

  • Chris Seveney
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