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In reading Jackie’s wholesale lessons, I love that formula she uses; but I have a feeling that my area (Santa Barbara Calif) has repair costs that are higher than $1/sq ft.
Our insur agents (even the independent ones) estimate a minimum of $300/sq ft for bldg…..I have remodeled a few times, and have many builder/developer clients….everyone projects $300/sq ft as a bare bones MINIMUM…..the only time I have heard of anyone bldg for less is an out of town contractor who drove 2 hrs each day to do the work here in town; but who then stopped coming to work due to being burned out by the drive/time etc.
I do have a handyman who does roofs, etc for me at $20/hr…but only when he is unemployed (like right now with our bldg recession).
So, do I need to factor in different costs for the pricing formula in Jackie’s wholesale lessons, or should I just ask the flipper/rehabber investors what formula to use….etc..?
can someone advise me about this?
thk you,
d
Jackie assumes $1/sq ft for EACH thing wrong with the house, not for everything. For example, paint inside, paint outside, new bathroom, new carpet, etc. are each $1000. Each area is different, but the material cost shouldn’t vary that dramatically. You will not ever nail the numbers right on the head and you will also get better at estimating as time goes on. Also, building costs are far higher than repair costs (generally speaking). You should have an easier time finding people to fix things since the building market is so slow. They have to buy groceries too.
Donna,
1000 sf foot house should not cost more than $1000 to paint the exterior. $1000 to paint the interior, etc.
You add up all the “things’ that need to be done and multiply by the sf of the house.
With your formula, it would cost $300,000 to paint a 1,000sf house – THAT IS SIMPLY NOT ACCURATE.
it might only cost $800 to paint the exterior of a 1000sf house but it might cost $1500 to repair the kitchen — SO THE NUMBERS BALANCE OUT.
My fornmula is a way to quickly establish an estimate on what repair cost will be.
A faucet at home depot in Garland Texas cost the same as a faucet in Santa Barbara. The only difference is finding the person in both places who will take out the old one and install the new one for less than $20 ( HINT – you do not look for them in the yellow pages)
BTW – you should always pay BY THE JOB and never by the hour!!!!
Jackie:
Thk you for your input….It seems as tho you are saying that the formula is an approach to balance things out; more than anything else; and that I should be able to use it for my area even tho it is such an expensive area…(?)…..And, Yes, I agree that it is primarily our labor costs that are different here; many of my clients who moved here from other towns/even LA have complained about that; and I always have been told that it is since everyone, including all the workers; have to pay higher rent /there fore have higher overhead for simply living here vs virtually every other area in calif. (Ie. even slum-area 1 bedrm condo rentals START at $1800/mo rent here; they….1/1….even in the least desirable areas, sell for min of $300k+) and now that gas prices are higher; that too is affecting how many lower-paid pple can drive here from lower priced communities 30-45+ min away from us (to work). My area is described by Calif Assoc of Realtors as being the highest priced real estate market in Calif; it is very similar to NYC/Manhatten/Upper East pricing w/rentals and house prices.
But,contractors and handymen in the ‘jobs wanted’ section of the newspapers charge at least $50/hr…so my being able to find one at $20 was a real coup; he just happened to be working for a neighbor on his ranch; and I will not be sharing his name/number with anyone else, that is for sure! He often needs supervision from me; tho; and I wish I could find more at that lower price…… I don’t know how to find more like that….do you have any suggestions?
We have many immigrants from the South American regions here; and I do speak some Spanish; and have at times found good laborers from that source..
One of my clients is a rehabber, she is bilingual; and seems to have inexpensive sources but she too has to supervise the workers quite a bit. I suppose I could call/ask her for her suggested names; if she will share.
Other than that; I don’t know what to do to find the lower cost sources.
(and the last house we had painted was 2000 sq ft;stucco, one story, and it cost $3000 to have it ptd by a French fellow I had heard of; but he took months to do it so it was not a good thing since it drove the renters crazy to have such slow progress; we learned the hard way on that; but he did do a high-quality job. Our contractor had quoted $5k but would have finished it in a few days. )
Are there any crew-related courses I could take to learn more about rehab street smarts, etc?
thk you
d
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