Ask Cornerstone: How do I submit a line item job proposal to my hard money lender if I am going to do some of the work myself?
I’m working with a hard money lender who will provide 90% of rehab costs, but I need to submit a line item job proposal. If I am planning to do some of the work myself and hire subs for the remainder, how to I present an acceptable rehab proposal to the lender? What kind of tools are available for estimating rehab costs?
Just be upfront with your lender and ask them what they need. Tell them that you are going to do certain amount of work yourself and ask if it’s okay. You may need to do is indicate the work you are doing yourself.
There are a lot of good estimating tools that you can do the estimate yourself. Google “rehab estimator” and find something that suits you. Many of them give typical costs already loaded for many items.
We have a worksheet for estimating costs as part of our Flip Calculator spreadsheet that you can use, also. There is a full list of the most common rehab items and expenses. The costs roll up into the flip calculator summary page which is useful for analyzing your flip, projecting profit, and determining the price you should pay for the investment. You can subscribe to our newsletter which includes the free flip calculator download here: http://cornerstone-company.com/free-flip-calculator/
Alternatively, you could use a service ($200-$300) that will draw up a cost estimate for you. Just speak with your lender first to hear his or her expectations.