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Benefit from the experience of 1000 rehabs in our Investor's Toolbox! It includes: Improvement Cost Estimator Loan Opportunity Wizard Investment Calculator |
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What is the objective of FLIP ICE?
How accurate are the material and labor prices in the FLIP Improvement Cost Estimator (FLIP ICE)?
Will there be updates for material and labor prices provided in the future?
What level of design finishes is the FLIP improvement Cost Estimator based on?
What are stages, steps and tasks?
How do you enter data into FLIP ICE (how is FLIP ICE filled out)?
What if I have a task that isn't listed under one of the Steps?
Why do some tasks have a blank material cost?
Is it important to know the square feet of the house (how accurate does it need to be)?
Could you explain the unit of measurement abbreviations?
What is "SQFT $" at the top of the page?
Could you explain some other construction terms on FLIP ICE?
The objective of FLIP ICE is to help you to quickly perform a simple improvement cost estimate that is comprehensive and accurate while giving you important knowledge about how houses are rehabbed:
Comprehensiveness. The first goal of FLIP ICE is to help you to not leave anything out. Think of FLIP ICE first and foremost as a detailed checklist for many of the tasks that happen in a typical rehab. We often tell investors that given the choice, it's better to be comprehensive than to be accurate. What we mean is that if we had to make an estimating mistake, we'd rather be off a little on the price of installing a new window than missing the fact completely that we had to install a new window (a $50 difference verses a $250 difference)!
Accuracy. Accuracy, in addition to comprehensiveness, is a critical element to estimating rehabs. In order to help you become an expert, we've left the labor and material columns unlocked giving you the option to enter pricing that is more specific to your area. Therefore, with each estimate you do, you will make your own personal copy of FLIP ICE smarter. So FLIP ICE becomes a more valuable estimating tool as times goes on.
Speed. The third component to good estimating is speed. To that end we've made FLIP ICE very quick to navigate and fill out. Take it for a spin! You may have noticed that if you press the 50 STEPS button at the top, it will take you to a map highlighting all of the fifty steps to doing a rehab project (the steps are divided into six stages). Press on anyone of the steps and it will quickly transport you to that step on the estimating screen (this is a real benefit since ICE is ten pages long-it reduces a lot of scrolling time).
Skill. FLIP ICE gives you some of the expertise we've learned from being involved in more than one thousand rehabs. One of the essential things we've learned is how important it is to do everything in the correct sequence. That's why we've included our HomeFixers 50 Steps To Rehabbing a House (click on the 50 STEPS button at the top). It's a step-by-step guide to helping you manage your project from start to finish. You'll also note that we've set up the estimating screen in the exact same way to reinforce your learning of the order in which to perform each task.
The material and labor prices in FLIP ICE are based on the average prices that HomeFixers gets for goods and services in the five markets we serve: Austin, Dallas, Houston, Atlanta and Orlando. There will undoubtedly be some cost variability from region to region.
We plan to provide periodic pricing updates. Check back at the FLIP ICE web page for details.
At HomeFixers, we've identified four design levels for rehabs: basic, standard, designer and custom. We based the design finishes in FLIP ICE on a "Standard" rehab. "Standard" design is nice but not expensive. The house looks clean, fresh and pleasant. Most of America lives in a standard home. There's a lot more great information about these design levels in our book FLIP.
HomeFixers divides up a typical rehab project into six stages, fifty steps and hundreds (if not thousands) of tasks. Stages show the progress of a rehab project at a very high level. Stages are especially nice when updating lenders and partners on how the project is going (we often use stages for draw schedules). Steps are where HomeFixers schedules and manages all of the work in a construction project. Most steps have unique trades (contractors) that perform the tasks in each step. And each step has prerequisite steps that must be completed before the next step can be started. There is a great deal of important information about steps and how to manage a rehab project in our book FLIP. Tasks are the bedrock unit of work done in each step. They are the individual activities that when completed, complete the step.
The white boxes with gray borders are the input fields. There are three types of input fields: quantity, labor and material. The input fields at the left are the quantity fields. This is where you will enter the data (quantities, etc.) that you captured while walking through the house (read FLIP to learn how HomeFixers does a walk-through). The paired input fields at the right are for labor costs and material costs. You can change these if you find that your labor cost or material cost for a particular task or tasks varies from the default input that we've supplied.
There are two additional input fields located in the white bar at the top of the page for the property address and the square feet of the house. The square feet can usually be found on the property tax records. The square feet usually only refers to heated and cooled space (doesn't usually include a garage).
There is an "Extra" task at the end of each step that can be overwritten to become any task you want it to be.
In some cases we've used turnkey pricing meaning that the price you see in the labor column reflects both the cost of the labor and material. For example, when the material column is blank, it should be understood that the labor column includes both labor and material.
A number of the tasks are based on square footage pricing so it is important to know the square feet and essential that it is very accurate (be aware that sometimes tax records may not include an addition or a garage conversion, etc.). Take step 34 for example - Paint Interior and Exterior. The cost to paint the interior is based on the turnkey cost of $1.30 per square foot of the house. Therefore if it is a 2,000 square feet house, the interior paint job will be $2,600 (based on our pricing).
Here are the unit of measurement abbreviations:
EA = Each
HRS = Hours
BID = You need to get a bid (estimate, proposal, or quote) from another company
SQFT = Square Feet - this is usually the floor or foundation square feet of a room or house unless it is specified that the square footage of the wall surface area is needed
DAYS = the number of days it takes to perform this task
CY = Cubic Yard - usually used to measure dirt, soil, mulch, crushed stone, etc.
LF = Linear Feet (often referred to as Lineal Feet) - used in measuring things like baseboards and most other trim boards
SQ = Square (often used in roofing, a square is a surface area of 100 square feet: 10' x 10')
It is helpful to see what percentage of the total cost is allocated to each Step. In a lot of cases this reveals how much work is going on in that step and how much management attention the Step deserves.
Once you've completed your improvement cost estimate, this number (SQFT $) will reveal how many total construction dollars per square foot are spent on the project. Construction dollars per square foot is an extremely powerful way to look at a project. It reveals the project complexity, duration, risk and is the best way to compare one project to other projects. Read FLIP for a lot of details about why this measurement is so important and how to use it to your advantage.
Here are some terms that may need further explanation:
Roof Decking - The material (often plywood or OSB) that goes on top of the roof framing members. Roofing materials (felt, shingles, etc.) go on top of the decking.
Lockout - A term used to describe the step where all of the locksets (doorknobs and locks) are installed in a house. Later, this included other similar tasks such as cabinet knobs, bathroom accessories and other tasks that trim carpenters have to come back and do at the end of a project.
Punch - Completing or correcting the final checklist of all the incomplete or unsatisfactorily completed items after the job has been substantially completed.
Contingency- HomeFixers suggests a 5-7% fluff factor to compensate for errors in estimating.
General Contractor Fees - HomeFixers suggests a minimum 25% markup on all construction expenses (the national average for most remodeling general contractors seems to be between 35% - 50%). Even if you choose not to hire a General Contractor and manage the rehab yourself, you should expect to spend at least 10% on overhead expenses related to construction such as cell phone, office supplies, insurance, payroll, accounting and vehicle maintenance.
HomeFixers Corporation is a company that works exclusively for real estate investors providing consulting, training and construction services. We have affiliate locations in Austin, Dallas, Houston, Atlanta and Orlando with expansion plans to add affiliate locations across the US (contact us for information about becoming a HomeFixers affiliate in your city).
Disclaimers:
We would like you to understand that there are many different ways to estimate and improve houses. This is not "the" way; it simply resembles the methods that we have used over and over.
You should consult your local building authorities and municipalities about the building codes (required permits and inspections) and building restrictions in your area.
To forward a report, please use the report feature and print it to a PDF and then send the PDF. If the report feature does not work, you are likely in possession of an illegally transmitted copy. Again, we hope you will buy a registered copy.
Starting spring of 2007 we will be offering training seminars and conferences. Our goal is to put together programs that give more value than you've paid for (we hope you feel that way after reading FLIP or purchasing FLIP ICE). Please visit HomeFixers.com for information on upcoming training events or email us at info@homefixers.com.
Thank you for purchasing FLIP ICE!
