Rehab Estimation Case Study - By a newbie, for newbies (and constructive criticism!)

[Manuel A.]

So, I've made a video of my last house I checked out, a complete walk through (except exterior, which you'll just have to trust me needs exterior paint and some landscaping that I'll do on my own) and I want to let the other newbie's like myself see how my numbers come out.

I think I'm decent at it now, my first house took me a little over an hour to estimate, like 1hr and 15min. Now I can do a rough estimate in about 40 minutes! Also keep in mind, I've never closed a deal yet, so if that helps others nerves in my situation, I'm glad. And also, I'm sure more seasoned investors can give insight as to thinking my numbers are good/bad. This is all 100% to help others in my situation learn.

Let me give you one tip if you're a newbie like myself before we get into this! In the beginning I thought, "how would I ever account for every little thing?" Every electrical cover, light switch, door hardware, etc... This was important for me, but if I honestly counted all that stuff, I'd go crazy and it would just take a long time. So, for things like that, I just flat out estimate very high. In this example you will see for cabinet hardware, outlet covers, and vent screens I just simply budgeted $750. I may be wrong to do this, but first, the over estimation gives me more safety in case I under budgeted elsewhere, and it lets me keep my sanity while estimating. So... where to start...

Tools I bring with me
1. Clipboard with 2 sheets of paper.
2. Pen
3. Measuring tape
4. My phone (as a calculator, flashlight, gps, etc...) It's a Samsung Galaxy S3, highly recommend it...

So now, here is the video (it's the one on the right I believe):https://www.dropbox.com/sh/u6ucp6f4tnfnhsc/aNrYjaL929

Now, let me give you all of the info I wrote down on a piece of paper about the house:
Windows - All new (except big custom ones in the patio thing.)
Custom Windows - 2 (One is 44in x 83in, and the other is 47in x 52in)
Light Fixtures - 19
Interior Doors - 9
Exterior Doors - 2
Glass Sliding Exterior Doors - 2
Sliding Closet Doors - 3
Furnace - 1
How Water Heater - 1
Cooling Unit (Refrigerated Air) - 1

Besides this, I also have all the floor measurements for the floors! I do plan to leave the hardwood floors that already there in the hallway and living room. Everything except the bedrooms/closets will have carpet...

Here are the measurements:
MBR - 209sqft.
MBR Closet - 31sqft.
Bed1 - 112sqft.
Closet - 14sqft
Bed2 - 119sqft.
Closet - 14sqft.
Bed3 - 132sqft.
Closet - 23sqft.

Kitchen/Dining Room/Front Door Area - 229sqft.
Hallway/Living Room = 452sqft (Shouldn't need this number, but just in case...)
Bath 1 - 21sqft.
Bath 2 - 46sqft.
MST Bath - 66sqft.

Monetarily I broke down the flooring like this:
Tiled areas = 362sqft * $5/sqft(material/labor) = $1,810 I rounded to $1,800flat as I know I over measured in places and $10 bucks isn't much.
Carpet areas = 654sqft. * $2.8/sqft(material/labor) = $1831.20 I rounded to $1850 just cause it's a nice number.

Okay, now here is my numbers that I was happy with when I finished:
Total Flooring: $3,650
Appliances (Fridge, Stove, Dishwasher) = $2,200
Paint interior/exterior= $6,000
Kitchen Cabinets/Granite Tops = $4,500
Fixtures = $1,500
Doors w/hardware 9 = $765
3 toilets = $300
Bath 1 Vanity = $200
Bath 2 Vanity = $650
MST Bath Vanity = $950
Cabinet Hardware, Electrical Covers, Vent Screens, etc = $750
Heat Furnace = $1,400
Water Heater = $400
Refridge A/C = $5,000
Slider Closet Doors (3) = $285
Misc. $1,000
TOTAL = $29,550

After I get this number, I add 10-12% to it. In this case I added 12% bringing me to $33,096, which I round to $33k.

So already after doing this I know I forgot the 2 custom windows and that little problem in the ceiling of the patio thing with black mold on it... But, as you can see, that extra $4k from the extra 12% will give me peace of mind/safety from this. And don't forget the "Misc." bringing it to $5k, just for situations like these :D. Oh, and all of my over estimations on materials/labor and under estimations on ARV :D.

Some things to keep in mind
My city doesn't have much grass anywhere, so no grass would be put into landscaping, which is why landscaping won't cost me anything. I can cut down and haul away anything I need to. I can also get free rocks to lay in the yards, which is a common decoration in my city. Also, if you think all that rock will cost money to be taken out of the patio, think again! Cause I have no problem ripping it out myself. :D I want to be really hands on for my first flip, and the next one's until I feel comfortable.

So, guys/gals, how did I do? And to my fellow novices, I hope this has helped as I would've loved something like this!

ONE QUESTION FOR THE PRO'S!!!
How would you estimate the ceiling problem that has the ripped out panels and black mold? Without bringing a contractor, please. :)

Sorry for any mistakes in my writing or any left out info, I'm fairly tired... But I will fix it if brought up and answer any questions!

Thanks everyone,
-Manuel

[J Scott]

First, I have no idea what prices in your area look like, what types of contractors you plan to use, how much of the work you plan to do yourself, what level of finishes you'd use, etc...so my comments below are purely speculation and generalization... :)

Tiled areas = 362sqft * $5/sqft(material/labor) = $1,810 I rounded to $1,800flat as I know I over measured in places and $10 bucks isn't much.

That seems like a reasonable estimate for tile. Low-end tile and installation material will run about $2/sf, and $3/sf is reasonable for someone who does tile but isn't a specialist -- good enough for a lower-end rehab.

Carpet areas = 654sqft. * $2.8/sqft(material/labor) = $1831.20 I rounded to $1850 just cause it's a nice number.

Shop around. You can probably find carpet, pad and installation for closer to $2/sf, even for decent mid-grade carpet. Carpet will likely run about $1-1.25/sf, pad about $.25/sf and installation about $.50/sf.

Appliances (Fridge, Stove, Dishwasher) = $2,200

If you're okay with low-end stainless appliances, Home Depot sells stainless Hotpoint (GE's low-end line) for cheaper than this. For $2000, you can get all the above plus a microwave.

Paint interior/exterior= $6,000

Seems a little expensive. Based on the video, I'd think $4000-4500 is reasonable, though with the sheetrock work, $6000 is about right. Looks like you didn't count the sheetrock work anywhere else, so maybe that's included here.

Kitchen Cabinets/Granite Tops = $4,500

Probably a little bit low. Expect about $100-200 per linear foot for cabinets (depending on quality) and about $30-40/sf for granite. Hard to tell the size of your kitchen, but you're probably a bit low with your estimate.

Fixtures = $1,500

Is that just light fixtures? Or light fixture + plumbing fixtures?

I average about $35 per light fixture (some are $15 and others are $80) for materials and about $40 per fixture for installation -- so an average of about $75 per fixture. You mentioned you had 19 light fixtures, so that would put you right about your estimate at my prices. So, I'm good with that... :)

Doors w/hardware 9 = $765

6-panel MDF pre-hung doors at Home Depot will run $50-65, depending on size. Add $10 for hardware and that's an average of about $65 per door in materials. Another $30 in labor per door puts you at about $95 each, or about $950 for the interior doors.

You didn't mention the exterior doors, but expect about $200 in materials and about $50 in labor, for about $250 each.

3 toilets = $300

The cheapest toilets you'll find are about $80-85 each. You'll probably want the next level up, about $100 each. So, your estimate covers the materials, but not the labor. Expect about $50 per toilet for someone you can trust.

Bath 1 Vanity = $200
Bath 2 Vanity = $650
MST Bath Vanity = $950

Depends on the level of quality, but that sounds reasonable. In fact, for the level of house I'm assuming you're doing (relatively low end), I'd think those prices are on the high side.

Cabinet Hardware, Electrical Covers, Vent Screens, etc = $750

I generally budget $1000 per project for outlets, switches, plates, registers, mini-blinds and other random stuff. So, this is about right.

Heat Furnace = $1,400

Do you have to replace the compressor or the coil? If not, this is reasonable. If so, you're way too low.

Water Heater = $400

That will cover the water heater and expansion tank, but not the labor. Expect $100-150 for labor.

Refridge A/C = $5,000

Is this the compressor and coil? If so, that's definitely on the high side. You can probably get a whole new HVAC system (furnace, compressor, coil) for $3200-3700 for this house.

TOTAL = $29,550

You're still missing a lot of things in this estimate.

For example:

- Demo labor
- Dumpsters
- Sheetrock Installation and Repairs
- Bathtubs, Showers
- Rough Electrical and Plumbing Work
- Finish Trim (Baseboards, Shoemolding, Casing, etc)
- Roof, Siding, Gutter Repairs
- Cleaning

After I get this number, I add 10-12% to it. In this case I added 12% bringing me to $33,096, which I round to $33k.

While I think some of your numbers were off, the total is probably pretty close to what I'd expect to pay if this were my house in my area. Just from the video, I'd guess about $35K (assuming no roof, structural, electrical, plumbing or other major issues).

ONE QUESTION FOR THE PRO'S!!!
How would you estimate the ceiling problem that has the ripped out panels and black mold? Without bringing a contractor, please. :)

Probably a roof/gutter issue. Once the issue is fixed, you'll want to pull out all the moldy trim, sheetrock and insulation and replace it. That's about it. I'd factor in an extra $500, not including fixing the source of the problem, which could be a cheap fix or an expensive fix...no way to tell from the video.