In as much as I didn’t get the house on Polk for the original price I was hoping, I have had to go back and revisit my estimate for the rehab. Originally, I had come up with a rehab cost of $104,000. This thing needs a lot of work to successfully Flip That House and make a profit. But, one thing I have learned about myself is that I sometimes tend to over estimate costs on these rehabs. But by the same token, I hate to under figure the costs also. Having to come up with additional monies out of pocket to get a project completed sucks. It tends to cut into the bottom line drastically.
I went back through and identified a few items that may have had a little padding in them, and I’m making some cuts in the scope of work also. One thing I am cutting is insulation. I made an assumption that since the house was built in the ’50s it probably didn’t have much insulation in the walls and ceiling. I was planning on taking off wall finishes and putting fiberglass batt insulation in all of the exterior walls, and pulling down the ceiling to expose the ceiling joists, so I could put in new ceiling insulation.
I am now thinking that if I leave the ceiling up there, I can blow in some cellulose insulation up in the attic area. Plus, radiant barrier material is relative inexpensive and I can install that under the rafters. Radiant barrier is a very effective way to cut down on the asorbtion of the sun’s radiant heat into the house, and it definitely will help to keep the house cooler, cutting down on the energy needed to cool it in the summer. Similarily, it will help in the winter to keep the warmth from radiating out.
I am also trying to see how much I can save on the pool since I had figured on completely replastering the thing. I had a pool plastering contractor look at it and he is going to save me some money there too.
So after sharpening my pencil, getting some actual bids on work, and revising the scope of work, I have a new budget of $79,300. With any luck this should leave me with about a $7,000 cushion for those inevitable unplanned costs.
We’re planning on closing on the house later this week, so I am looking forward to getting started.
And for more great ideas that you can use if you are contemplating a Flip, check out www.FlipThatHouseWebsite.com.
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