House #23: Budget Recap

March 28, 2011 · 9 comments

As I mentioned a few days ago, The Horsey House renovation is complete and the property is listed for sale. In my original post about this house, I mentioned that rehab costs should probably come in below $15,000. I was off by a little bit on this one (see breakdown below), both because I forgot to include a few things and because we made some last-minute additions to the list of things we wanted to upgrade.

In terms of things I forgot to include, the major one was cleaning of the septic tank ($320). In fact, I didn’t even realize the property was on septic (as opposed to public sewer) until just a few days ago. We’re not used to having properties on septic, and the fact that this one was built in 2003, we figured it was connected to public sewer; we were wrong. We also missed the fact that we needed a couple of new outlets wired ($100) and we needed some landscaping done ($100). In terms of last-minute additions to the budget, our cabinet guy gave us a good discount for putting in all new bathroom vanities ($685) and an island in the kitchen ($635).

All of these items added nearly $2000 to the budget, and took us to about $16,500 overall. Here’s the detailed breakdown:

Final Budget

Overall, I’m happy with the work we did, the end-result and the budget…hopefully we’ll get a quick contract on this one!

9 responses to “House #23: Budget Recap”

  1. Mark in Fl says:

    Consider yourself lucky that you got by with only $320 on the septic tank. These are often the source of large unforeseen costs down here on the coast.


  2. J Scott says:

    Mark –

    Actually, the septic cleaning is tomorrow, and $320 is the price just to clean the tank. If they find any additional issues, it will be more.

    Luckily, the house is only 8 years old, so hopefully there aren’t any unknown issues.

  3. Mike says:

    Is 2k high for interior paint? Is that everything including baseboards and trim? I guess if they’re down to the nitty gritty it could take time. On the other hand, 3k for the kitchen cabs and counters seems very reasonable. The place looks great.

  4. J Scott says:

    Hi Mike –

    $2K is pretty typical for what we’d pay for this amount of interior painting, and includes all ceilings, walls, trim, windows, etc. While it’s more than what a handyman or an amateur painting crew might charge, the reason we’re happy to pay a little bit more include:

    – Before starting, our paint crew will repair any sheetrock damage, bad drywall, etc. They spend more time prepping than painting, which results in a much better end result;

    – Our crew is meticulous, and the difference between a not-so-good paint job and a great paint job is evident when you walk into a house; I want a great paint job;

    – Most crews will come in, paint and leave. If the walls get scratched or messed up later in the project, it would be up to the rehabber to do the touchups himself or pay the painter to come back. Our crew does much of our other work too, including hanging lights, installing carpeting, installing appliances, etc. They will paint before any other work is done, and then anytime a wall is scratched or trim is replaced, they’ll go back and touch up the work. Then they come in at the end (since they’re already there doing other stuff) and do any touchups and repairs that are still needed;

    – Our crew has about 4-6 guys who are all professionals, and while it would probably take a typical painting crew 3-4 days to do an entire 2000 square foot interior, our crew knocks it out in about one and a half days. So, we’re not wasting time waiting before we get the rest of the stuff done.

  5. Mike says:

    Thanks for your response. Sounds like money well spent.

  6. Rachel says:

    So it is $1.00 for 1 square foot (roughly using square footage other than the real wall coverage). Right? What about the popcorn ceiling that I want to be removed and re-textured ? how to calculate? I live in Silicon valley, ca. Does it make a difference in labor cost? Also I have used the contractor before. I found his quote on popcorn ceiling way too much. Thanks!

  7. J Scott says:

    Hey Rachel –

    Yup, I pay about $1 for sq foot of living area for interior paint. That said, in California, prices could be much higher, so you’re really going to have to talk to several painters and get several bids before you have a good idea what you should be paying out there.

    As for scraping ceilings, depending on the design of the house and the type of texture they used, it could be an easy job or it could be a very difficult job, so the cost is going to vary based on those things. Get several quotes and try to find other investors in your area who can recommend contractors.

  8. Rachel Zhang says:

    Thanks J Scott! I really appreciate your quick response and your open sharing of the case studies numbers. As for the property I mentioned above, I am still evaluating whether to fix and sell, or touch-up and rent for 3 to 5 five years. This Condo is in move- in condition (except touch up and new paint). If renting for 3 – 5 years, I can utilize the current rent-ready condition and capture the higher rent market and avoid the buyers’ market. The down side is that I have to pay $330 monthly HOA. Even that, with #1275-1295 rent,
    I can still cash flow for $450 a month with $80K mortgage (I paid $78K for this one cash). If it is a single family, I will definitely keep it. But I have a hard time making decision now. Like yourself, I generally focus on fix and sell. In this case, what would you do?

  9. J Scott says:

    Rachel –

    Without knowing your financial situation and your long-term goals, it’s hard to give an opinion on the best decision for this property. The good thing is that it sounds like any decision you make is reasonable — from long-term rental to short-term rental to quick flip — so at least you have options.

    Personally, I like the short-term (3-5 years) rental idea, if you have the cash to hold the property and you believe the market will improve in that time. But again, this decision is difficult to make without knowing your personal situation.

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