We (pretty much) finished the rehab on The Drought House today, about 5 days behind our original schedule…
We still have to install the appliances (they come tomorrow) and complete some touch-ups and punch-list repairs, but the house is ready for staging, and we expect to complete that tomorrow and get the property listed for sale by the weekend.
We had a few budget overages on this project, including the burst pipe under the foundation ($1100), a bad motor on the air conditioning unit ($350), lots of extra drywall work ($200), removing and replacing a water heater to run some new plumbing ($125), extra demo of the heavily glued down hardwoods ($150), etc.
But, on the bright side, we saved about $800 when we realized that HUD (who we purchased the property from) had gotten termite treatments and a termite bond before they sold us the property. We also cut out the hardwoods in the entryway and just used carpet throughout (savings of $1000), got a discount on cabinets (savings of $500) and chose not to include a washer/dryer in the sale (savings of $600).
So, while we had about $2000 in overages, we were able to save about $3000 elsewhere; ultimately, we came in about $1000 over our original budget.
I’ll post some pictures in the next couple days, and will also post the final budget numbers for this project…
You mentioned that you removed/replaced a hot water heater for $125 – does that include the price of the hot water heater?!? I just priced a 40 gallon heater for one of my rehabs and it is running around $350 including tax just for the heater itself.
Also, I had a question – when you go through the Pro Desk to get a bid on purchases for more than $2500, which materials do you find garner you a greater than 10% discount? I am running about 7% on average when I run my purchases through they bid room, and end up just using a competitor’s coupon instead (10% discount).
I read something you posted online regarding IRR and had a question. Please email me and I will submit my question. Thank you very much!
Hi Taylor,
The water heater was not replaced with a new water heater (which would have cost about $350)…it was taken out and the same one was replaced after a bunch of drywall patches were done behind it.
As for the bid desk at Home Depot, it’s the higher margin items that tend to be marked down the most. Things like lumber, basic wood doors, doorknobs, popular low-end fixtures, sinks, etc, tend to have the greatest discount, while things like high-end fixtures, windows, ornate doors, appliances, electronic items, etc, may not get marked down at all.
Here’s the trick I use: Ask the bid-desk to submit the bid and then ask them to use the 10% off coupon for everything that wasn’t marked down. That way, you’ll get 10% off the stuff that didn’t get marked down and the bid-desk price for the stuff that was (which is often much less than 10%). On average, you’ll probably see about 12-15% savings.
J Scott,
Thanks for supplying the detailed deal information on your site. Most the “experts” only every give you pep-talks, or will explain the REI process at the conceptual level. Seeing real deals helps be formula my own methodology.
I have found http://www.finestexpert.com to be a good site for analysis, though I’d with they would account for 100% cash offers. Their calculations always assume a mortgage.
I can’t wait to see a complete overview of this project’s budget. Good luck
Thanks;
M Mark