Flipping a foreclosed house in New Jersey (Detailed)

[Alex T.]

Hi, I'm a first time house flipper and just bought my first foreclosed property for 108k. The comps in the area are anywhere between 200-220k. Ive been meeting with contractors everyday, but don't really know whats a good deal and whats not. 

Since the house is a foreclosure there are a lot of issues such as:

Downstairs(basement)

• If anything is missing or broken on the walls its going to need sheet rock
• Tile on the floors
• Furnace / hot water needs to be re-piped

Main floor

• Whole interior of the house needs to be repainted
• Tile on kitchen floor
• New appliances / cabinets
• Laminate floor
• Granite counter top
• Recess lighting
• 1/4 inch sheet rock on the top of the kitchen
• Bathroom re-tiled
• Stairs re stained 

Upstairs

• New door for bedrooms
• New light fixtures
• Same laminate floor downstairs used upstairs
• Completely new bathroom

Outside

• Roof needs to be fixed (not replaced)
• Foundation needs to be painted
• Front porch needs to be touched up

So basically that is what needs to be done for the house. Like I said I paid 108k, but materials and labor seem to be costing about 70k. I was expecting it to be 40-50k, but apparently the furnace might need to be replaced, and the roof might need more work than expected.

I suppose my question is, what else do I need to look for?

What else do I need to get done?

Am I missing anything?

Anything to keep in mind when dealing with contractors (they make make me buy things i don't need so they can profit off it)

[Ibrahim Hughes]

@Alex T. - $70k?  That's a lot for Roselle. And a lot for the list you gave us. I saw maybe $50k worth of work at best.  My guess is that the contractors see that you are new and are therefore jacking up the price. Which will likely mean that it won't stop there as they may try and "find" more problems they couldn't see in the beginning.

Honestly, so you don't lose on this, I would bring in an experienced rehabber as a partner and have him run this for you while you learn. The $70k quotes you're getting tells me that the Contractors may try to get over on you.  If I could offer 2 pieces of advise for dealing with them:

1) STAY AHEAD of your contractor. ONLY pay him for work done, not work that's going to be done. If he needs a deposit =, make sure it's not more than $2k OR offer to buy the materials yourself DIRECTLY. But the stay ahead rule goes for any subcontractors (electrician, plumber) your contractor is hiring. Personally I don't like the fact that all jobs will be handled by the GC you're hiring (I like to be my own GC and hire my own subs).

2) Hire a professional consultant who will walk the site before each paycheck is cut to the contractor (again, for work that has already been done) and have him/her confirm that the work was done correctly. Rule #1 won't make a difference if you can't tell whether or not something was done correctly.

There's so much to rehabbing (if you're not experienced with your own proven and TRUSTED crew) and 90% of it will depend on how competent you are as well as your crew. Both are equally important.  You can get a competent crew who will see that you're new and take advantage of you. You will need to be the type that is tough and not a push over. You will have to take control of this project (and not let your contractor take control) and show them that despite being green (and they know you're green already), you are not going to be taken advantage of. This is an upstream battle for you at this point as I learned the hard way (many years ago) how Contractors think.

Do yourself a favor and bring in an experienced partner NOW before any checks are cut. Trust me on this one.