Ron`s Renovation Checklist Prices - Are the rates realistic?

[oliverlimcangco]

Hello everyone!

I have spoken to a couple of contractors about RLG`s estimates for repairs, but most of them scoff at the amount that these things are quoted at. Here is the full list for a 1200 sq ft single story house:

Windows - $200 each
Electric Panel Box - $1500 each
Kitchen - $300/lineal sq. ft. so around $1800 if gutted for a kitchen that spans 6 feet
Bathroom - $1000 guest and $2000 Master, gutted
Carpet - $1.50 / sq ft.
Roof - $4000 to replace
Paint - $3000 Interior and Exterior
Garage Door - $400/car

Does anyone know of a contractor who will do these quoted prices - and these amounts are for LABOUR AND MATERIALS.

Also, what about the following:

1. Furnace
2. Hot water tank

I am now doubting if we can even come close to these amounts, but if we cant, what numbers do we have to play with? I have not had to do a whole lot of repairs to my suites yet and so am inexperienced when it comes to this aspect.

Thank you so much for your responses, this board has been extremely helpful!

Oliver

P.S.

I have had some contractors literally offended with these rates...

 

[Sherilyn]

Hi Oliver,
From our limited reno experience, we have found that the "Ron Price" is not accurate and is far below what a qualified and trustworthy contactor charges.
All the best,
Sherilyn

 

[markl]

I think one thing you need to realize is that the average wage in the US is much less than in Canada. Average in most states is $20k per year.

I too would like to gut my master and totally redo it for $2k.

Just my thought on the pricing I have not taken a RLG course.

 

[RedlineBrett]

It really depends on the quality of finishing you want to use... and that`s really dependent on the rest of the house and what buyers will expect at the price point of the property. I know you`re an engineer and us engineers like to assign numbers to variables but this is one of those things that is a bit iterative and needs to be customized for each project. You will get yourself into trouble if you set a fixed amount into your budget and then go buying property without getting a proper estimate from a contractor.

Looking at your list I think you are very low. You would be a lot closer if you doubled your numbers on every one to include troubleshooting and taxes.

 

[GaryMcGowan]

Oliver,
I have taken Ron`s course and the estimates are US numbers.
You can pretty much double the cost here in Canada for most of the items you have above. Materials here in Canada cost almost double. Sure you can find some cheap materials and labor but you might spend weeks doing it.

We did a three piece bathroom in the summer and I gutted it. The contractors finished it for $3000. Most trades will charge 200 to 300 a day for work.
Hopefully some contractors here will comment. The work they provide is essential to our business and there is no reason we should undercutting them.

Learn their price list when looking at renos or better yet have them go to the property before you buy and have them quote on it. Its important that you tell them what you want so they can make the right recommendations.

 

[ZanderRobertson]

I`m not very well experienced with renos either, but do have some knowledge of some trades. Most of these prices are crazy low, and the contractor would lose money on most of them if they took the job at this.

Regarding roofing though, I do have one contact who`d likely give you a deal similar to what`s quoted there. However he`s in Edmonton.

Zander

 

[housingrental]

Hi Oliver
As other have commented tese are low
A few additional notes;
The electrical panel number is higher than needed - but this will depend on what the specific job is.
The bathroom numbers are very low.

It will depend on what you view as a master bathroom but for a complete 4pc bathroom and bottom end your looking for $5000 for gut and redo with adequate materials. Generally that will be closer to $7000-$10000. (Obviously up from there - extra stand alone shower add one thousand... with 6 different points of water and onyx tiles maybe add an extra $10000 to that etc.)

Carpet is doable that cheap but lowest grade. Generally transitions, removal, disposal, under pad add to that.

Roof - This will vary significantly on the size and shape of the roof. You can find houses that can be done for less than that and many that will cost more.

Paint - This amount is reasonable for many houses.

Garage door - You`ll likely want to spend more than that for the door alone not inlcuding installation and removal of the old one.

Furnace will generally cost you starting around $2500 for a high efficiency - and up to $3500 with lots of variance
Hot water heaters, gas, installed generally doable around $1000+ , electric $650+
The specific property / size / venting / etc.. will determine this


QUOTE (oliverlimcangco @ Jan 7 2010, 03:31 PM) Hello everyone!

I have spoken to a couple of contractors about RLG`s estimates for repairs, but most of them scoff at the amount that these things are quoted at. Here is the full list for a 1200 sq ft single story house:

Windows - $200 each
Electric Panel Box - $1500 each
Kitchen - $300/lineal sq. ft. so around $1800 if gutted for a kitchen that spans 6 feet
Bathroom - $1000 guest and $2000 Master, gutted
Carpet - $1.50 / sq ft.
Roof - $4000 to replace
Paint - $3000 Interior and Exterior
Garage Door - $400/car

Does anyone know of a contractor who will do these quoted prices - and these amounts are for LABOUR AND MATERIALS.

Also, what about the following:

1. Furnace
2. Hot water tank

I am now doubting if we can even come close to these amounts, but if we cant, what numbers do we have to play with? I have not had to do a whole lot of repairs to my suites yet and so am inexperienced when it comes to this aspect.

Thank you so much for your responses, this board has been extremely helpful!

Oliver

P.S.

I have had some contractors literally offended with these rates...

 

[ChrisDavies]

And Ron`s prices come with a relationship with a contractor. I`d expect prices will become more flexible as time goes on and you do more properties. Pick the right people, form a relationship and work on prices later.

 

[JohnSoucie]

QUOTE (GaryMcGowan @ Jan 7 2010, 05:35 PM) Oliver,I have taken Ron`s course and the estimates are US numbers.

I have to disagree with this. Ron definitly stated a few times that these are Canadian prices and I made a couple of notations about it. I`m referencing the list he delivered directly/verbally(sorry haven`t verified if that was the version posted above). But in the "Ugly House" course binder specifically, it still had the US version....which I have now ripped out and destroyed.

I just assumed(ass-u-me

) that since the course/list was "Canadianized" he had someone(REIN?) at least go to Home Depot and verify the typical material costs and then also extrapolate some typical Can-US labour costs. Maybe he only had the material costs updated and not the labour.

Despite the costs being obviously low, people who didn`t take the course have to realise that they are used stritctly for doing the 15 minute walkthrough estimate for a house you will quickly wholesale. He made it clear that if you intend to actually do the rehab, you must get contractor estimates.

All that being said....we need to come up with a new accurate list just like Ron`s, based on the feedback coming in. It`s sorely missing. I`m sure these postings will detail it, but a new list needs to get concisely collated.

John

 

[RedlineBrett]

QUOTE (JohnSoucie @ Jan 8 2010, 12:01 PM) All that being said....we need to come up with a new accurate list just like Ron`s, based on the feedback coming in. It`s sorely missing. I`m sure these postings will detail it, but a new list needs to get concisely collated.

John

Problem is that the estimates will never be able to be accurate due to the variability from one home to the next. A simple bathroom job will require 20 different decisions from 1000 different options each... what vanity to use, what faucet, showerhead, shower curtain rod, sink, tiling, tub surround, grout, toilet, towel hangers, mirrors etc. If you are walking into a discount deal in a neighborhood 10% below the average selling price of the city you will need one certain spec, but if you are in a trendy modern revitalizing neighborhood you are going to need another.

There is a danger with investors trying to categorize all facets of the business and put absolute numbers on everything. It might take you ten minutes to skin a deal but your numbers will be off by 25%. Or you could take two days to skin a deal and be within 5%. Everyone`s business is different but unless you are pushing a deal a week I know which approach I would follow.

 

[GaryMcGowan]

QUOTE (RedlineBrett @ Jan 8 2010, 02:45 PM) Problem is that the estimates will never be able to be accurate due to the variability from one home to the next. A simple bathroom job will require 20 different decisions from 1000 different options each... what vanity to use, what faucet, showerhead, shower curtain rod, sink, tiling, tub surround, grout, toilet, towel hangers, mirrors etc. If you are walking into a discount deal in a neighborhood 10% below the average selling price of the city you will need one certain spec, but if you are in a trendy modern revitalizing neighborhood you are going to need another.

There is a danger with investors trying to categorize all facets of the business and put absolute numbers on everything. It might take you ten minutes to skin a deal but your numbers will be off by 25%. Or you could take two days to skin a deal and be within 5%. Everyone`s business is different but unless you are pushing a deal a week I know which approach I would follow.

Well noted Brett,

In Ron`s course he is simply stating that you use the same paint, vanity, bath, sink, flooring in all your units. Similar to the REIN guidelines. The method behind Ron`s thinking is it should only take 10-15 min to know if you need to pursue a deal or not. The idea is not to sit there and wait for 3 estimates before you make the choice to further investigate a property.
If your talking to a seller and they tell you the bathroom needs updating because it has original 1970`s decorating. You already have an idea the it may cost 3k-4k to update. Quick decisions is the focus when dealing with lots of prospects. Its our job to weed the suspects quickly.
I would not base my total renovation budget a few quick decisions like that though. It`s to be used as a high level filter.

 

[RedDeerWilliam]

QUOTE (JohnSoucie @ Jan 8 2010, 12:01 PM) Despite the costs being obviously low, people who didn`t take the course have to realise that they are used stritctly for doing the 15 minute walkthrough estimate for a house you will quickly wholesale. He made it clear that if you intend to actually do the rehab, you must get contractor estimates.

John
One more thing I`d add is on the wholesale side, IF you sell to a contractor then the prices Ron has listed are probably pretty close because then there are no (or a lot less) labour costs associated with the repairs and let`s face it, that`s where the costs really change.

With wholesaling I believe Ron`s point was to come up with an educated guess when estimating repairs plus you do have a 3% hedge factor built into this formula too! So as was mentioned in an earlier post on this thread you may want to double the costs when you anticipate that an investor will buy it and have to hire contractors or at least add another $10K to the buffer! Then again if you sell to an investor who`s going to keep the property and rent it, who`s to say that he will do all the renovations at one time! He could defer some of the work to the future as property values increase, just as long as the property shows well enough to renters. Curb appeal must still be considered.

 

[JohnSoucie]

QUOTE (GaryMcGowan @ Jan 8 2010, 05:07 PM) Well noted Brett,

In Ron`s course he is simply stating that you use the same paint, vanity, bath, sink, flooring in all your units. Similar to the REIN guidelines. The method behind Ron`s thinking is it should only take 10-15 min to know if you need to pursue a deal or not. The idea is not to sit there and wait for 3 estimates before you make the choice to further investigate a property.
If your talking to a seller and they tell you the bathroom needs updating because it has original 1970`s decorating. You already have an idea the it may cost 3k-4k to update. Quick decisions is the focus when dealing with lots of prospects. Its our job to weed the suspects quickly.
I would not base my total renovation budget a few quick decisions like that though. It`s to be used as a high level filter.

Yes, and Ron is mostly talking about wholesale ugly houses, which mostly aren`t sitting in nicer expensive neighbourhoods. I don`t think he offers or even talks about the estimate list in the Pretty House course. It`s for junkers. So Brett`s worry that different neighbourhoods will require different levels of quality and finnish is not a big issue. So you are off by $10K....you will never do the work anyway, it`s for wholesale flipping, but you got in the ball park close enough to make a resonable offer quickly.

And then there is the whole thinker brain vs reptile brain issue surrounding this discussion....but that`s for Ron to rant about

John

 

[jseib]

Im not an RLG supporter however I believe the numbers are not based on calling a tradesman from the yellow-pages but rather finding Tony, the guy with a truck and some tools who works for $15-20/hour to do the work.

From my experience using these guys they usually are cheap but come with some baggage. One guy who does work for me at $20/hour can fix anything electrical, plumbing or air conditioning/furnace related... but he drinks and is very unreliable.. The work gets done fast and cheap but he may miss 1 or 2 appointments or show up and decide he doesn`t want to work..

Not saying all these guys have problems but thats been my experience.

 

[Lermy]

One distinction that needs to be made here is whether you want a contractor or want to be the contractor. Any contractor worth the money charges between 10%-25% of the entire cost of the job. These contractors will organize the trades and materials and ensure the job is done right and on time.

Good trades people charge anywhere from $30-$100 per hour. In this instance, you are the contractor and must organize, hire, etc...

Every year we do a number of fix jobs where someone wanted to get the $10-$20 per hour handyman and things went wrong. In the end, the consumer pays more because it takes longer for us to fix and do the job right. Now the consumer pays more and has more stress. Over what, a few hundred dollars, maybe a thousand?

As a contractor, the last thing we like dealing with is cheap people. Don`t ask for discounts all the way through. Respect us just as you would respect any reputable professional. A good contractor is worth his/her weight in gold in reduced stress and more productive time.

Lastly, that guy who charges $10 an hour. Yeah, he has no insurance or WCB. If he screws up or hurts himself, you are in trouble.

 

[Lermy]

Oh right... Yes, the prices are hilarious. $4000 for a roof! $3000 for painting interior and exterior! Love it!

 

[Mitch Collins]

These prices are low - but not that far off reality if you are working to keep costs down.

Personally, I have a full time `handyman` as one of the main players in my team. He runs his own sub contracting business, and charges out at $30/hr, whereby he includes his own WCB, vehicle, fuel, tools and more. He is able to do essentially everything - electrical, plumbing, painting, flooring, appliance repair and much more.

I`ve painted entire 1,300 sq ft properties for under $3,000 by setting up accounts at Rona, Home Hardware etc, and getting a 20% contractor discount, and my handyman to repair and drywall damage, prime, paint and trim.

I don`t use `contractors` anymore as I`ve found the vast majority of them will charge a surplus on the materials, and then typically want to earn between $50-75 per hour for their labour.

The challenge here can be finding the handyman..it took me about 2 years to find the excellent team member I have now, but you need to advertise heavily and interview probably 20+ people to find the right fit.

It was worth it for me many times over!

Warm Regards;