Best Ways to Cut Costs on Rehabs

[Austin Good]

Hello all,

Although I am not new to BP, this is my first post. I am a real estate broker and a real estate investor. I run a traditional real estate team as well as buy, rehab and sell properties. Last year we bought, rehabbed and sold 6 properties without really trying that hard (by that I mean we found these 6 properties in the normal course of running our $10 Mil+ per year traditional real estate sales team). This year we have been purposeful in our planning and are going to do a minimum of 12 rehabs this year.

Enough about me, the reason I started this post is because I am very interested in the collective minds & experience of the many rehabbers on BP and how we can brainstorm & share different things we do to save money and reduce the costs with a rehab.

I believe we all have questions as learning based individuals on different ways we think that may help reduce the cost of our rehabs. For example, I wonder if I just knew exactly how to measure the roof and purchase the shingles for a roof if I could find a more "day laborer" rate installer.

What got me thinking about this is the fact that I am now on my 3rd roofer, not due to being unhappy with the other 2 but because I keep finding a consistently less expensive roofer and switching. My latest guy replaced a roof in Plano for me for $5,500 (30yr shingles) that I believe was something like 34 squares but needed 44 squares when considering waste (at least that's what my prior roofer told me before he ended up bidding that same roof out at $8,500 and lost). Now, it's important to note that my new roofer did nothing other than shop the shingle, purchase it and had one of his "day laborer" rate guy install it without as much as ever being in the same county of the house.

Is anyone already doing this on their rehabs? Can anyone help share with me and everyone else reading this how they get the cost down for roofs?

Also, let's not stop just at roofs. Does anyone have any insight and/or experience that they could share in regards to what they have done to make their rehabs cheaper? or Does anyone have any theories or hypotheses that they would like to share and have others shine some light on?

I really think that pooling together our collective experience can help everyone put more money in their pockets on each and every rehab.

[Ibrahim Hughes]

Welcome Austin.

I too have thought about switching out my Contractor's crew and using my own laborers. Actually started thinking about this maybe 5 years ago. What stops me is that I don't have time to supervise a crew, run back and forth to home depot and other related tasks that my Contractor does. What stops me is that I know once I start taking over his job there will be no one to take over mine: finding deals. In the end I realized that I make more money hiring a reasonable construction company I can rely on and trust than trying to cut out the middle man - so to speak.

Then again, I usually do heavy gut rehabs. So running and managing my own crew is out of the question. However, if I ever come across a project that requires a light/cosmetic rehab then I have a couple of skilled laborers I can grab and manage the rehab myself. I determined in those instances it would definitely save me a lot of money without taking up too much of my time.

I'm actually doing that now on a property I'm placing on the market in a week or two in 'as-is' condition. Rather than hire my regular contractor to cleanout the place, clean the chimney, service the HVAC, install a new water heater, pull carpets and clean the place from top to bottom I'm hiring the laborers and tradesmen myself.