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Thursday, October 4, 2012

House #10 Repair Budget

Our latest house flipping project, House #10 is now completed and is on the market for sale. Here is the list of repairs that I am making to the house and the estimated repair for each. 

Cost estimating and putting together a budget is a critical skill to learn for flipping houses. I have known investors to go upside down on a deal because of underestimating repairs needed.

You will see that I divide the list into exterior and interior and then sort the interior repairs by room. This helps me put together the list of parts I got to buy and also helps me track the work to make sure it gets done. 

On the left you'll see I specify what trade is doing what so that I know how many different people I have to call, what estimates I have to get and helps me scheduling the work. 

Finally, on the right is all the pricing which I divide into labor and materials. I do this because I buy many materials so I have gotten good at knowing what something costs. For less costly items I just leave the materials column at $0 and estimate it all as labor. 

Overall the type of work we are doing to this house is "cosmetic". Meaning that we are keeping all the infrastructure, the floor plan and we are not adding square footage or anything like that. I am just updating every room of the house since everything is mostly original in the house. 

As you can see I am hiring a general contractor (GC) for the work so he will be doing most of the work. I will then only have to schedule just a few trades on my own. Although this costs me more, given my limited time availability I think it's worth it.

Bottom line is, based on the price I bought the house for and what I estimate I can sell it for, if I can keep the repair costs under $35,000 I'll be a happy camper.

Question: Have you found a different/better way to estimate repairs? Is my estimated pricing high or low?

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  1. Do you use some kind of software to put together your budgets and estimate repairs?

    1. Jared, thanks for asking. I just use Excel. Like you see here, I just go line by line listing every repair item I need to make in the house and then assigning a cost to it. Because I have been doing this for a while I keep on getting better and better at figuring out what things cost.

      That being said, I am still learning...

      For example, the installation of garage doors I KNOW it's $180 for labor because that is what my guy charges me and another $270 for the actual openers because they cost $135 each at Home Depot.

      On the other hand I thought interior paint was going to be $1,800 but it ended up being about $2,100. My painter provides the paint. So when I am estimating the best I can do is go by what I have paid for paint in the past but it would be hard to nail it 100%.

    2. Forgot one thing. I'll gladly share a copy of my estimating template if you want it. Just let me know here if you are interested.

  2. Thanks for listing all the information. We are involved in our first flip right now as investors in partnership with a contractor/realtor team. We hope to be done in about two months and have the place up for sale. We'll see if we want to do this again after that. Some ups and downs for sure. I'm looking forward to reading about all of your projects when I have more time.

    1. Kim, I am glad to hear you are giving this a try. Do not hesitate to contact me if I can be of any help.

      Read briefly over your blog, good job. Hope the rental property is doing well.


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