A Masterclass in Estimating Rehab Costs When Flipping Houses (Part 1)
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- เผยแพร่เมื่อ 1 มิ.ย. 2024
- The biggest hurdle to flipping houses? Estimating rehab costs (accurately!) On today’s episode, real estate Mogul, James Dainard shares his cost-effective process for estimating rehab costs. James has earned his title by being involved in 3,000 transactions over the past fifteen years and creating a multi-level real estate brokerage. He has mastered the art of estimating rehab costs which has allowed him to invest on a seriously large scale. Currently, he is working on thirty flips and has 400 apartment doors under construction, so not only has he had past successes, but he is consistently learning and adjusting to the rapid changes of the market. James is an investor to not only learn from but to emulate, and today he gives a step-by-step guide to do just that.
James breaks down renovation steps like building a team, getting a budget sheet together, and vetting workers, contractors, and properties in vast detail. The underlying theme behind each of his steps is meticulous preparation. As an investor, one of the best things you can do for yourself is to prepare and get rid of any variation in your processes. By perfecting his preparation processes, James has been able to minimize variation and save himself in the long run. Do yourself a favor and listen to these next couple of podcasts intently- it could save you serious time, headache, and money in the future!
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Join the Real Estate Rookie Facebook Group:
/ realestaterookie
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Listen to James’ Full Interview on The BiggerPockets Podcast:
www.biggerpockets.com/blog/bi...
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Estimate Rehab Costs Quickly With This Simple 6-Step Process:
www.biggerpockets.com/blog/ho...
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How to Flip a House and Make a Profit:
www.biggerpockets.com/guides/...
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How to Determine a Property’s Value Using Real Estate Comps:
www.biggerpockets.com/blog/re...
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Follow James on Instagram:
@jdainflips or / jdainflips
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Check out James on TH-cam:
@projectre or / projectre
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Connect with James on BiggerPockets:
www.biggerpockets.com/users/h...
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Connect with Tony and Ashley on BiggerPockets:
Ashley: www.biggerpockets.com/users/e...
Tony: www.biggerpockets.com/users/t...
Episode 165
Show notes at: www.biggerpockets.com/blog/ro...
00:00 Intro
05:52 Building a Multi-level Real Estate Brokerage
08:25 The First Step: Building the Right Team
17:39 Vetting Contractors
27:01 Using the "Plug and Play" Method
32:04 Estimating Rehab Costs
42:50 Vetting a Property Before a Physical Visit
48:59 Getting in the Property & Coming Prepared
INSANELY helpful!! I cannot believe the caliber of information, strategy ideas and specifics James shared here. It’s beyond rare for someone to share so generously in an interview. Cheers to James and Ashley and Tony!!
its true!
This might be the most valuable video I've seen on this topic!!
Side note: Most manufacturers do DON have a backup source. Almost without fail in the automotive industry you have a contract with one supplier for the part, or they won't take the job.
This video is a priceless resource for anyone entering the real estate and house flipping arena. The detailed insights and expert guidance presented are invaluable for those new to the industry. I look forward to the subsequent parts for a comprehensive understanding of this crucial aspect of successful property investment.
Thank you! Tell a friend 😉
Thanks James. Valuable information!
Thank you 🙏🏻
So Much VALUABLE INFORMATION, learned a few more things, this was a great video.
Great video! How do we get a copy of those spreadsheets? At very least the line items on those spreadsheets.
This episode was awesome!
Thank you!
That permit tip was GOLD.. You can also find pricing and other subcontractors in your local regional inspection database. Inspectors typically give a detailed description of the work, and how long it took them to complete it. Pro tip for sure!
Got to get creative!
This is awesome, I never thought of all those questions. This is giving me some serious information I’m going to keep for sure! For us just starting out I’m wanting to get to a spot where I own 100+ doors but for just starting out would fix and flips be where I should start? so I can build the up cash for down payments for all these different kinds of loans and repairs that a private lender or hard money lender may not cover. Just wanting to know where be a good place to start based on what I want to do in the end
Hey victor! There is lots of ways you can go get going and grow out your portfolio. The way I did was buy adding equity gainers and value add construction to create large equity positions, then trade the equity for more doors
Really enjoyed this one. About to close on my first property. I bought at auction. Gave me some insight on how to proceed with vendors.
Thanks Michael!
How did your project end up?
?
So true, worst thing you can do is hire the wrong contractor! I hired the worst and worst subs.. went 70k over budget. Still made money but it was hell.
This is gold!!!
Thanks!!!! Feel free to share 😝
@@ProjectRE I will!
41:00 is money!! Best part of the whole episode.
Thanks Shawn!
I have redone a few homes ,don't be a cheap skate, include the fridge in the appliance package as first time and VA buyers don't have extra money for it come on its $1200 and it covers up the hole in the cheap cabinets also I have the heating ducts cleaned 40 yrs of dust , I also TV the sewer lines from the house to the street ,
😂 I’m the same way! Even back in the day when no one put fridges in we did. We want it move in ready. We don’t do washer and dryers though.
Great videos and insight
Thanks Richard!
I really enjoyed this one! Thanks! =]
Thanks Jamie!
Driving for contracts! That's great!
Look under every rock!
This was totally informative as a budding wholesaler/investor✔👌🏿👍🏿
Thanks Vermon! Feel free to share!
Hey Vernon, where are you investing?
Thanks all for asking the questions that most would fail to explore. What about going to “new build” sites and looking for contractors? What are your thoughts 💭
Different set of trades and pricing, we build and remodel homes, we don’t use the same trades for each project.
Hi. where can i find or buy the estimate for rehab cost? I live in Texas
Where can i find rehab budget sheet ?
He was too advanced (my brain ) can’t wait to get to his level !! Watching this again !!
It hurts my brain too 😂
Maybe change your @ to countrymac until you're up to speed
Totally off topic, but dude totally looks like a younger Martin Short.
😂
How can I acquire your rehab detail list?
great show. where can I get the mentioned spreadsheet ?
Come check out projectRE! We spreadsheets that cover all underwriting for real estate!
Guys, where I live you are LUCKY if you find ANY contractor....ANY...most have left the country and work abroad...
How much do general contractors take for a fee? Like percentage wise
All depends on project - typically 10%-15% for investors. 20% + retail / custom.
How much are you getting these detailed bids for?
Free! Part of the service!
Can I have a sample of your budget sheet?
my issue is I have talked to 20 plus contractors and only 2 gave me a proposals what could be the issue I'm so confused
You’re the issue
@@zenco1611 I heavily doubt that people are just afraid to work
Don’t always have the luxury of picking and choosing contractors in small markets…
They are even slimmer in larger markets! The bud hedge funds have been taking them all… just like the tech companies and the employer market. Growing pains
🙏😷
💪
I've been in construction 40 years I absolutely cannot believe you're gonna find somebody to GC your job and then you're gonna pull out any line items that hes charging too much for and hes gonna let you bring in your people!!!!hahahaha
oh hell to the no !! NO FUKIN WAYYY!!
Curious why, if you don't mind elaborating.
@@vincesteward3447same reason this investor is weary of working with someone new: there's lots of unknowns with a new person (ie they can suck and make things difficult for you.) You also have guys that work with you as a GC routinely and they may want the work and not understand that you're being TOLD who to bring in.
I work with the guys I like and who do a good job. Having some dude try to save a buck like this would usually mean there will be mariachi music, empty Modelo cans, and shoddy craftsmanship in my immediate future. 😂
Sone contractors don’t, but isn’t it about a clarified scope of work. General contractors sometimes do 100% some times 50%. It’s no different then doing a house in phases.
As a contractor, investor are a waste of time, rather do work directly for homeowner🤮🤮🤮🤮
Why? All investors aren't the same sir. I sure do appreciate my contractors.
It really depends on the company and investor. Someone our contractors won’t work for homeowners because they change their mind to often. We create the plan, put logical pricing in our budget, then let them do their thing. They like that we understand the process and costs and we make quick decisions (and payments).
lord no not me....holding hands of people with too much money and NO IDEAS based in reality....no thanks
So you are saying you want to work with people that don't have to worry as much about cost. Makes sense 😊
You may get to charge a lot more with homeowner/retail, but you’ll probably have 5 times as many change orders, change of mind, confusion about what needs to be done etc. My GC’s love working with me, because I give them an unambiguous plan, mostly stay out of their hair, and give them large bonuses.