Estimating Project Timeline

[Daniel Kramer]

I am a beginner and attempting to set up some cost models for fix & flip properties. I am aware of the many costs, including holding costs. However, my roadblock is in determining the timeline. I am wondering if any experienced professionals have data (20+ datapoints) as to cost and time to sale on each of their properties. I know there will be a plethora of examples, opinions, exceptions and objections to the vagueness, but this is purely for a simplistic model and I am curious to see if there is some correlation. 

That way, if I walk through a house and estimate the cost of a rehab, I can also have the model return back this vague time-to-sale number and estimate my holding costs. 

Thanks! 

Dan

[J Scott]

Originally posted by @Daniel Kramer:

....if I walk through a house quickly and ballpark $60k off the cuff, can I plug that into a quick calculation that also spits out holding costs (time dependent) with only a few quick inputs.

Just my opinion, but not really...

In my experience, if you're anything but a very novice rehabber, the difference between a $20,000 rehab and $40,000 won't be more than a couple weeks.  And in the scheme of an entire project, that's a short period of time.  

The things that will have a much bigger contribution to the total timeframe of the project are (again, in my opinion/experience):

- How quickly you start the project after closing.  Many newer investors will start building their scope of work and finding contractors after they close on the purchase.  Then they start the work a few weeks later.  Good investors will have all the pre-construction work completed by the day of closing, and will start work that afternoon or the next morning.

- How well you manage your contractors.  Many investors won't manage their contractors closely, and contractors will work about 50% of days (less if they have their way).  Good rehabbers make sure that their contractors are on-site at least 5 days per week.  Not managing your contractors well can add 100% to your construction timeline.

- How well you schedule.  Many newer investors will not schedule optimally.  And if they figure out how to schedule things in the right order, they still likely aren't optimizing that schedule.  When you have some practice, you can have multiple trades working at the same time, as long as you know which trades tasks can be completed without interfering with one another.  When you get to the point you can do this, you can easily shave 25% off your schedule.

- How long it takes to finish the last 10% of the project.  The last 10% can take 50% of the schedule.  Seriously.  Punchlist and quality control tasks can be difficult to power through.  If you don't know how to get the last 10% of the rehab done, you can easily lose a few weeks during this part of the renovation.

- How long it takes to get the house staged, listed and ready for showings.  Good rehabbers have this done within 72 hours of construction being complete.  Many rehabbers will spend weeks getting the house ready for the first showing.

- How long it takes to find a buyer, get a contract and get to closing.  This is often the longest part of the process.  

All of those things above will have a MUCH bigger impact on the length of the schedule than the dollar amount of work being completed.