How to Do an Exterior Estimate on a House Flip
Have you ever wanted to price out an exterior flip or know how we do it?
I am Ron Ramsden and I am a DYB coach, also a painting contractor here in Northern Massachusetts.
How do we know flips? Flips are all over the TV, it’s amazing they can take a house and renovate it in only half an hour, it looks great. Well, typically it takes a lot longer than that. So, we are in Chelsea, Massachusetts by the way, which is Northern Massachusetts, about 5 miles from New Hampshire border.
This house here was purchased for $350,000 thereabouts, probably going to market when it is all done for about 5 and a half, what did we get called in to do? The exterior had a look at the interior, the interior is all studs. This is a friend of mine who does about 3 flips, going on in one time. He brought us in here to do the exterior only because we had a crew that could handle it and get in and get out real quick, very basic flip.
So, what would we want to look at when we are doing an exterior flip is a couple of things, actually 3 things.
Know the process
First of all, we want to know the process –what he is looking for. Is he looking for us to guide them? We will be more than happy to do that, but this guy knew what he wanted, he wanted it to be sanded, of course, it had to be washed, then it had to be sanded. It was flaking and corked, one coat of primer which he was tinting, and one coat of finish.
He also knew the product he wanted, he wanted Shearman Williams’s duration, it worked out great. We want to know that and put that in writing ahead of time on our contract and agreement and in any communication, we have with him.
We put it on email so that we can save them, just in case there is a question later on, even though they were friends and we have worked for them before, we want to cover all our bases.
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So, on this house here, there is a brand new shed done, they popped out the back of the roof, and they have a full shed all around the back. What we are looking at here, when we first walked in, the house was white, it was peeled, not too bad but it was flaking, the siding on the back of the house, about half of it, one each side there was about at least a third, if not much of new siding.
It was in great shape that way, you can see the front of it, it was a very small front of the house, with about 8 feet tall and the house was probably 32 feet long, very small, plus the door and two windows, plus much siding after that.
A lot of the trim was replaced with Azac or a composite type of wood, and what we are looking for here is tint the primer as close as we could, really close, and then like I said, one coat and he wanted them sprayed and back brushed. We discussed that that’s the way he wanted to go because he wanted to be quick. So we did that, brushed the primer coat, did back brush the finish coat.
Payment
Secondly, payment… we want to make sure we get paid on this job. So, typically on these flips, there are many trades working at the same time, the mason showed up when we were painting the front of the house the other day, but he agreed and he left, he actually was a couple of days early.
But we want to worry about holdbacks, and what do I mean by holdbacks? If we can’t finish the entire job for some reason, are we going to get paid? What are we going to get paid? If it is a hundred-dollar job and we can’t paint two things, is he keeping all the money till it is done? Does he get to keep half? Because that doesn’t seem very fair, but if you have those conversations and put it in writing ahead of time, you would save a world of aggravation later on.
On this house, we have 3 things we can’t do. We will be done with this job, one more day, with 3 guys out here, if the weather holds off. 3 things we can’t do is the front door, the back door and the reason is they are bringing in sheet rocks, they are bringing in kitchen cabinets, and it doesn’t make any sense. To aggravate us or them having a finished door, trying to work around that. So, we will do that.
Also, you have to see, behind me, way up in the corner, there is a little white, we will get closer to that when I do my walk around, the electrical comes in, some rotted woods behind it, and it looks a little sketchy. So they are actually going to cap the electrical lines at the house, but they decided to shut the electrical off to the house for a day or so, so the carpenter can come in, we can finish it, we will coordinate it and they will have electricity and everybody is safe and all set.
So, we decided to hold back $400, at that point, and that was great, it was in the email and we can go from there. Also, let’s take a walk around, we can look at the house, I can show you what it is, we are going to bump around a little bit and I apologize…
Generally, we know production rates, we know what our hourly bill rate is, we know our production rate on spring, siding, we know our production rate on painting trim, how much a window cost and such.
This one was a little different because there was so much going on, there was some new, there was old, I decided to price this out as the day rate, how much do we get a day and how long is it going to take? With the experience and as you grow and you get experienced, you can fine-tune your production rates.
So, right here, at the front of the house, there are no shutters going on, we are not putting them on, the contractor is putting his own shutters on. Right here it was spray, we plastic off the windows, we got to see on this side, as we approach the other side, the windows are still plastic off, and the house is not a very large one.
It is like I said, a cape¸ this is two coats, we do plastic off some of our trim and our gutters so that we don’t hit that. This side was just sprayed, finished up about an hour and a half ago, it took one guy 2 and a half an hour to spray and back brush that side of the house. So, if we had two guys on here, side-by-side, it would have been much quicker, it didn’t happen that way, did it?
Know your production rates
So, you will see here, a lot of it is Azac, a lot of it is plastic windows. So, with the days… I know how much we can produce in a day, for something like this. I wanted to make sure it made sense for my contractor because he has so much other work going on, but we also don’t want to be his sole painting contractor.
It is not a very big house, so I knew that we had a power wash here, we had a 3-hour power wash, I automatically charged some 4 hours on a power wash, minimum, and we try to group them together if we have a couple in the same neighborhood and actually we did, we actually had a couple gutter cleanings, so my power wash guy was able to power wash this and then go clean up gutters in two other homes. So, that worked out really well, we could produce some extra money.
Then we walked around it, looked at it, know how long it is to plasticise off a window, we have 10 minutes a window as our production rate for plasticing off windows, and then it is the sanding, the prep is always the tough one. How much or how little should you do? The house had a lot of siding on it, we didn’t have a lot of prep to do except for the corking. Actually, they used about 6 tubes a corking on the whole house, I saw the case in the storage shed earlier today.
So, this was bid out at 9 days, 9-man days, so what does that mean? That means a guy here every day for 9 days, from start to finish, or 3 guys for 3 days.
So, it worked out well, on something like this, our contractors charge $55 an hour and we got that by determining our expenses and net profit and all the other things that we talked about in previous videos.
You will see that 9 times 400 is 3,600, this house is actually a $4,400 house for us, those are my numbers, probably your numbers too, but you can see where I am going, it is not tens of thousands of dollars to paint some of these homes.
If this was a house that we were making look pristine, we were sanding everything, we were filling the holes, we were priming and then we were hand brushing two coats on top of that, it would have meant much more money, probably about $6,500, $7,000.
But because this is a quick spray, we do back brush, trims are getting one coat and such, we are here for about $4,400, he has got the whole back to $400, that’s where we got the $400, we just wanted to round it off, there was no rocket science there, and then we looked at the inside later on as they get a little further along.
And it is funny, we originally talked about doing the inside, they have already changed the layout of the inside of the house twice since they started working.
Anyway, I am Ron Ramsden and I am a DYB coach, if you like this, please like and share this video, let me know if you would like me to make some more, I hope this helped on house flip? This house flip right here, they purchased it about $350,000, they are selling it for about $550,000, good or bad I don’t know. Have a great day…