Estimating Repair Costs
Hi,
I am new to rehabbing, and about to get my feet wet. Once my realtor starts feeding me properties, I need a way to get a ball park estimate of costs together. It doesn't have to be too accurate; I just need to know whether it will be a 10k, 15k or 20k job.
Now, I am sure that I will quickly gain experience as I do more properties, and be able to do make reasonable estimates. But, on the first ones, I will have to do it myself. I have no construction or remodeling experience; just a good pair of eyes and a good brain.
I am going to use a GC to do the work. But, I have to have the rough estimate of repair costs in order to figure out my offer price, and I won't have time to wait for a property inspector to come out if I want to get in quickly on the good deals. I will have GCs give me written estimates once I have an accepted offer.
I have seen programs advertised for estimating costs. Anyone have any experience with these, or have a system for estimating other than the SWAG (scientific wildly assumed guess)? Any advice appreciated.
Hey,
I have never used the software; a yellow note pad and Excel has been more than enough for me.
But conceptually everything has to work the same: you have a list of materials (drywall, 2x4s, flooring, etc.), the costs of materials and what materials are used for what jobs.
In Excel, imagine a workbook with three sheets: House (the property you want to buy), Jobs (a generic list of jobs and what materials they use by sq foot) and Materials (the name of the materials and the cost).
So you open the first sheet and type in the property and that it needs NEW CARPET. The spreadsheet automatically goes to the Job and Material sheets to figure out the amounts. You can organize the first sheet by rooms. You would have to enter the dimensions of the rooms, so it can figure out the cost.
It comes pretty close on the numbers.
The truth is you may not need something that complicated. If you need a new kitchen (cabinets, flooring, etc.) you can figure out a sq ft charge yourself by going to the local Home Depot and looking at the stuff. Once you have figured out the cost per sq foot, you can use it for every house. Do that for each of the rooms in the house.
And NO...this will not be 100% accurate, but it should get you in the ballpark.
Bruce
I understand what you have described and I am working on my own template. It is not as functional as what you describe.
Would you be willing to email a sample of the excel sheet you use as an attachment to use as a format?
My email is **Please See My Profile**
Thanks for any help
andrewb;
Once you and the RE agent find a property that you think you can make the numbers work, how about if you take the GC along with you to the property and have them walk through it. When you're stepping through the house with him, ask lots of questions. You'd be surprised on how much you'll learn in that one experience.
--Mark
make sure you allow yourself ample room, cost's are always more than you estimate and the time is always longer to finish than you anticipate.
The only problem I can see with estimating materials cost based on room sizes etc. is that it would only be accurate if I was doing the work myself. The GC will add on profit for doing the work, and also markup the services of subs, won't they?
I am sure all this will be clearer once I've walked around a property with a GC (as another poster said), but I wasn't going to do that until I have an accepted offer, otherwise the GC would think I was wasting his time (time = money).
Why are you using a GC?
Can't a regular handyman do most of the work?
Mrs. Meltzer
On the first walkthru, it's a free estimate. On the second, you're wasting the GC's time.
Offer to pay him $30-40 bucks for his time. Most won't accept it (unless you've called them out more than once or twice), but if they do, you've just paid for some learning.
BTW, I agree with the handyman approach (who could also estimate for you) as long as they are licensed and bonded. You want them to be responsible for the work to be up to code, not you.
Roger
Quote:
On 2003-08-11 20:55, MrsMeltzer wrote:
Why are you using a GC?
Can't a regular handyman do most of the work?
Mrs. Meltzer
I am using a GC because:
a) He will have a bigger crew, and be able to get the job done faster (less holding time)
b) He will provide project management, i.e., oversight of subcontractors, so I don't have to be on site. I have a day job that I have to hold down for now, until my REI career takes off.
Those are my thoughts at this point. I have never hired either a handyman or a GC in my life, so if I'm missing something, please point it out!
Thanks
[ Edited by andrewb on Date 08/12/2003 ]
I've been building new homes and rehabbing since 1977, for what that's worth, but what should be worth something is that I've only lost money on one project, and it was a doosey. Here's the rule of thumb I've seen in real practice for estimating costs: get the cost of materials as close as you can, then double it and add 20% and you've got a close ballpark figure for the total cost of the job. That's if you're hiring it done, of course, but remember that your own time is worth something too, so figure out how much and calculate that in.
I agree with the double materials and add 20-25%.
HOwever this too is fraught with problems. If you are a novice you won't know what you are looking for or at or what is involved in the rehab and will come up short. Estimating is more an art than a science. If you want cheap software go to craftsmansbook website and order their estimating program, it is similar to ones used by insurance adjusters. However you will still need to get experienced in what you are looking at.
There is also a book out there that lists component costs to replace based on national and regional averages.
A GC (I am one) would/should be more professional and get the job done better and quicker. THis all depends on the type of rehab going on. Handymen are cheaper and fine on cabinets and countertops. I however look for the opportunities that scare others away because the damage is a little more severe.
IF I were you, I would spend some time finding an honest GC and then partner with him. I would do this with someone I trusted that knew what they were doing. Then you don't have to guess.
[addsig]
Quote:
On 2003-08-11 20:55, MrsMeltzer wrote:
Why are you using a GC?
Can't a regular handyman do most of the work?
Mrs. Meltzer
My sentiments exactly. A General Contractor is able to perform services that cost more than $30K (in most states). An Independent contractor can perform services costing under $30K. A handyman is generally just that. Most rehabs usually require an independent contractor. Make sure whoever you chose is Licensed- insured-referenced. It is also smart to take them out with you. Pay them a small service fee (even if they do not charge one), for the sole reason, you may need that person to go out on many sites & if they know that you appreciate the time they are spending or the gas they are using, they will generally be there for you all of the time.
*Would you go to work, for free!!!
hum
Sparkle
QuickBooks Accounting Contractor Edition has an estimating tool. That in ombination with Home Depot Probooks CD works well for me. Labor rates vary. That is if Home Depot is available in your area. Local contractors supply houses offer similar catalogs. I can drive one hour away and have the costs on a job be half as much. now your area. A great responce I earned from Robert Shemin is whenever you get an estimate reply with "Gee that sounds high" nine times out of ten the contractor will lower his rate, when your new and he contractor knows it, they have a tendancy to quote higher because you dont know.
Be Well,
Metro
Perhaps you should consider taking a home inspection course. This won't tell you the cost associated with your project, but it will give you a whole list of things to look for on a new project. A lot of times, you can find them on ebay fairly cheap. If you're especially inexperienced, a lot of these programs have video tapes that go along with them. Also, check with your local library. They may already have a course that you can check out for free.
Then, when you know what you're looking at, you'll have a better idea of what you need to complete the job.