Real Estate Agent · Los Angeles, CA · Member since 2015 · 149 posts · 75 votes
I'm in a mentor/mentee relationship with a house flipper. He recently has re-entered the market and I help him with the acquisition side of things. So usually, I'm helping by scanning the MLS for rehab projects and reaching out/speaking to agents in order to build relationships to have deals brought to us.
Yes, I'm in the process of reading both BP books on flipping houses and estimating rehab costs (will finish in the next week or so) but thought I'd ask anyways. I'm not familiar with rehab costs and want to know what you guys would recommend. I'm looking at 10-15 properties a day sometimes and running a spreadsheet, but usually have been using $30-40/sf just for time's sake to see if the deal looks like something worth having my mentor take a look at.
Also, i'm not familiar with the 'hammer and nails' side of things. I don't know jack about materials, construction, design, etc. I went to school for a business degree, so it's something I've never been exposed to. Does anyone recommend anything I could read where I could get more familiar with more hands-on stuff? For example, I didn't know drywall was called sheetrock, so I had to google that a few months ago. Lol.
Flipper, landlord, investor · Coronado, CA · Member since 2014 · 158 posts · 41 votes
10y
Well, shoot, Austin--there's no substitute for experience. Go get your hands dirty on a flip and you'll learn pretty quick! There's theory and then there's application--getting out and actually doing something is the best teacher. I'm glad doctors and other medical providers don't get their degrees and qualifications by simply reading.
The next best thing would be to find a general contractor or someone else with that experience and see if he or she can work with you to come up with a good system.
Flipper, landlord, investor · Coronado, CA · Member since 2014 · 158 posts · 41 votes
10y
Well, shoot, Austin--there's no substitute for experience. Go get your hands dirty on a flip and you'll learn pretty quick! There's theory and then there's application--getting out and actually doing something is the best teacher. I'm glad doctors and other medical providers don't get their degrees and qualifications by simply reading.
The next best thing would be to find a general contractor or someone else with that experience and see if he or she can work with you to come up with a good system.
Specialist · Dallas, TX · Member since 2014 · 900 posts · 392 votes
10y
Curious how you came up with $30/40 sq ft. I am learning a good rule of thumb is $10-15 ft for light rehab, $20-25 for medium. & $40-35 heavy rehab. I know you can't even use this unless you see it or see pics short of a thorough inspection, though what other quick formula do other rehabbed use? Thanks for sharing!
Real Estate Agent · Los Angeles, CA · Member since 2015 · 149 posts · 75 votes
10y
@Account Closed that sounds like a good rule of thumb. We're looking for heavier rehabs by looking for your ugly <1950s distressed properties. That 30-40 number is from overhearing my mentor speak about heavier rehab projects. Are your numbers consistent with labor in an area like Southern California?
But yes, of course you don't know until a professional walks the property, but i'm looking to get 10-20% or so within the actual cost while I'm looking through a bunch of properties per day. Want to have the process be quicker so I can get a quick idea if the subject is something worth looking to put an offer in.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
10y
Christopher Winkler Your good rule of thumb doesn't apply in CA, we are 2-4 times higher here.
Austin Mudd You're on the right track, and I don't believe that books can't substitute for experience, i have built my first road from books and plans. Someone covered my pitfalls and prevented them before they occurred but I didn't need experience to do whatever i needed. Buy a book called craftman's installation encyclopedia and tell me, after reading it, you don't know 95% how to build things (residential wise).