What can I do myself to help reduce rehab costs?

Question

Hey everyone, total noob here. I am getting ready to purchase my first investment and BRRR property that will require a gut. A primary reason why I decided to go this route was to get experience and exposure into rehabbing and fixing up a property.

Obviously for the bigger items such as plumbing, electric, HVAC, etc...I am going to leave it to the certified professionals to deal with (although I will try to learn as much as I can).

Otherwise, in order to save rehab costs as much as possible, what items would you say I will be able to/should do myself? For example, putting down the flooring? putting in the drywall? etc...Any ideas would be helpful!

Thanks

Rob Massopust · Answer

Youtube each component so you have a visual on what needs to be done or at least a better understanding. ie tiling a bathroom etc

Break down each component on a spreadsheet and try to figure out how many man hours a competent handyman would charge. ie: $25hr x 8 hours = day rate, find a fair day rate and give them x amount of days to do the job

Contractors are notorious for bidding all over the place. Time is money for them too, they often times take more jobs than they can handle and subcontractor it out.

seek out bids for each component ie: I need 1200 sq ft of vacant house painted, be as detailed and specific as possible then post on Craigslist and see where the bids come back, some that are close or in alignment with your calculations then follow up. You will get crazy ass bids, low bids and average bids.

Some of the easy stuff you can do yourself but if you have another source of income and can create more dollars per hour than let say a painter then best be spent hiring a professional painter.

For tougher jobs bid it out and no sense on overpaying through the steep learning curve and difficulty etc.

Factor in your carrying costs - If you daily carrying cost is $100 then if you piss away 30 days that is $3000, if you can find someone to blast it out for $1000 you are really ahead of the game.

I just did a remodel and I was dreading removing the tile floor because some bids [ie Home Depot] cost per sq foot was ridiculous it was more to remove the floor then to install new. I got some demo bids and just had them quote me to demo and haul away 700 sq ft of tile. I got bids from $300 to $3500[Home Depot], I got one for $500 that the guy seemed to know what he was talking about.

Jay M. · Answer

To echo @Steve Vaughan do NOT attempt to drywall yourself. If you attempt siding or roofing make sure that you understand how to flash everything so it doesn't leak. I personally wouldn't do my own roof and that is what I did in the 80's (framed / roofed / siding).  Life's too short to do that for a few dollars.  Let people that do it everyday do it.

If you install an exterior door really look into how to flash the pan / sill pan.  It seems like a lost art and I assure you 90% or more doors leak......Tiling a shower pan is another I would pass on until you have quite a bit of tiling experience.

Chris C. · Answer

Do you want to be a tradesmen or a real estate investor?  Spend your time finding more properties, more funding, and learning to manage people.  If the deal is so tight you have to do the work then you paid to much.

You don't have to know how to do the work to manage the people. There are doctors offices that are not owned by doctors.

Jaron Walling · Answer

@Julia Rockwell I had some experience and  knowledge of power tools but it was a learning curve the whole way. I spent at least $200 on tools/misc stuff which I could have rented. I’m confident to do another remodel in less time and probably less money. I hired an electrician for the outlet and plumber for the shower valve.

Ahmed Alkaysi · Answer

Wow, thanks for all of your responses. There were many great points. Having a lack of experience and a full time job, it's clear it doesn't make sense to work on any of the larger projects. I think I will spend majority of my efforts researching, looking for good deals, and improving my negotiating skills as some of you have suggested. I will contribute where I can for the smaller initiatives.

Thanks all.

Steve Vaughan · Answer

I'm a sand it and refinish or paint it kinda guy, so guts aren't in my sandbox.

But I have done enough to know I would NOT hang, tape and texure drywall.  It will take you forever and look like poop.

Your savings are going to be doing any plumbing and electrical work or prep. Dig the holes. Expose. Those guys and hvac are expensive.

Do siding, windows , roof, landscaping,  etc maybe.  Depends. Are you like Jim and have been working with tools your whole life?  Never had more than a hammer in a kitchen drawer just in case?  Depends.

Erik W. · Answer

I can't stress how important it is to take @Chris C. and @Jaron Walling's  advice.

What is your goal?  Do you want to become a Mr. Handyman, or do you want to be a Real Estate Investor?

Now I get it...if you've got no money there's a temptation to try to scrimp, save, and DIY seems like the easiest way: donate your free labor.  But you lose a TON because it will take you 2x longer and you'll make a bunch of mistakes, some of which may be very costly.  Also, holding time.  Can you take 8 hours a day to work on it, or will you do 2 hours here....an hour there....after you're already tired from your day job and have to miss your kids' school program?

Once-upon-a-time things were simple.  A man and a few of his buddies helping could build a house from the ground up.  Then along came electricity and indoor plumbing.  Shingles and gutters.  All great stuff.  Our economy became highly specialized, and in spite of the "high" cost of hiring professionals, a true Pro is worth his weight in gold.

So here's what I consider a very practical suggestion...

Sit down and DECIDE: How much do I want to earn per hour?

If you want to earn $20-$40 per hour...sure, go be a painter, a demolition man, a rough carpenter, an amatuer jack-of-all-trades.

If you want to earn $80-$150...learn how to do your own evictions, serve notices, and file Deeds (i.e. your own legal work)

If you want to earn $200-$400 per hour...learn how to buy properties for CHEAP, negotiate repairs and legal work with the $20-$150 per hour guys.  This is the step I'm in today.  (*grins)  And now I'm looking at the next step...

Earning $800-$1000 per hour learning how to teach others to do the $200-$400 per hour stuff for me.

Bottom line: You don't need to know how to swing a hammer to judge the work of a competent contractor and get a good price.  Get referrals.  Tour their work sites.  Take a class on negotiation and project management. Get 3-5 bids.  I grantee you Donald Trump never swung a hammer before doing his first $100 million deal.

In short: spend your time doing the most valuable tasks you can, then reach for the next level.

Best wishes!

Jim K. · Answer

There are a million things you can do, Ahmed, including all the ones you mentioned. If I were you, I would get the book Renovation, now in its fourth edition, to get you started.

Rob Massopust · Answer

Ah do tell!

Rob Massopust · Answer

The other way you can save is if you do the demo and give them a blank slate to bid from. But becareful because you might waste time in the process and you have to factor in dump fees for the debris etc.

What can I do myself to help reduce rehab costs?

Most Popular Reply