Realty411 Magazine Featuring Lee Arnold from Cogo Capital | Page 62
Notice that the UNIT SF works
together with the COST (unit
price) to calculate the total cost, as
in this case for a new roof. You
can easily contact a roofing
contractor in your area to get a
square foot cost to replace a roof.
Here are the categories for the
Exterior:
1. Roof
2. Gutters
3. Finish
4. Masonry
5. Painting
6. Windows
7. Garage
8. Landscaping
9. Concrete/Asphalt
10. Decks
11. Fence
12. Pool
13. Septic
Here are the categories for the
Interior:
1. Painting
2. Hardwood
3. Carpet/Vinyl
4. Kitchen cabinets,
flooring, counter
tops, electrical & plumbing
5. Appliances
6. Bathroom
7. Framing
8. Insulation
9. Walls
10. Doors & Trim
11. Basement
12. Foundation
Mechanical
1. HVAC
2. Plumbing
3. Electrical hard money lenders will only
allow 5% overall contingency, so
in that case pad your line items to
include a sufficient contingency.
Other
• Demo & Dumpsters
• Termites/Mold
• Permits 5) When doing major renovations,
it is wise to get SKU numbers for
your kitchens, bathrooms and
mechanical items.
Concluding Remarks 6) The best use of a detailed cost
estimate is to assure that you have
covered your bases to have a
profitable project, and to convince
your investor as a wholesaler of
your accuracy and credibility.
1) The unit cost in our example is
based on the San Francisco Bay
area. They will need to be revised
for areas that have substantially
different cost structures. Input
from local contractors submitting
bids should make this possible.
2) In many markets around the
country, sale prices are now
declining. Therefore, it is critically
important that rehab costs be
estimated accurately, and an extra
margin be added for safety.
3) Put a Yes/No column, and that
way you can walk through a home
in minutes and mark Y or N based
on your observations. When you
leave you can then calculate the
cost.
4) Make sure you add a 10% to
20% contingency to the total
project to cover unknowns. Some
7) Your cost estimator will also
come in handy when you negotiate
your final offer on a discounted
property to assure profitability.
I f this article has helped you,
please let the writers know. Feel
free to also r equest other topics.
Readers c an reach e ach
contributor by calling or simply
emailing them directly:
Gary Massari,
CEO REI Fortunes,
https://reifortunes.com
9254511619
[email protected]
Bruce Kellogg,
Real Estate Consultant,
[email protected]
(408) 4890131
cost estimator
62