Reddit mentions: The best estimating home improvement books

No problem. There are a ton of great books out there. As with REI itself, there is no right way to go about educating yourself.


REI, at least in my experience and on the scale I'm operating, isn't as brutally complex from a mathematical/formula perspective as I first imagined. You obviously need to know how to analyze a deal, but you don't need to memorize every last little formula as I originally thought I would. As they say, "keep it simple stupid". Middle school math and excel for the more detailed formulas and breakdowns cover most of it.


The most important skills to have IMO and based on my experiences thus far are:


1.) Healthy dose of common sense


2.) "HOW not IF" mentality to problem solving


3.) Emotional intelligence (ability to read ppl & situations and react accordingly). Or basically ppl skills.


You can thus see why some say real estate investors are the "blue-collar" millionaires. And why, at least IMO, the mindset books like RICH DAD POOR DAD and THINK AND GROW RICH are just as important as the REI specific books.


I would also recommend you try to educate yourself on estimating rehab costs. That is the other area that almost all newbies (except those with construction background) struggle. And it is one of those things where you can't really cheat experience. I read every book under the sun and thought I had it licked, but boy was I wrong. The fact that both labor/material costs differ from market to market makes it difficult to extrapolate costs from one market to another.

One thing I have found extremely helpful though are the Craftsman Estimator books. They aren't designed for investors, but rather contractors to help them better estimate jobs. But that is exactly what you want in REI, always to be seeing things from the other person's shoes. If I want to be accurately predicting what Contractors are going to charge, then what better way than using the same information and system to generate Estimates that they do? It takes actual costs from contractors across the entire country, takes into account different geographical areas, and applies those costs to every line item you could possibly imagine in all avenues of construction. It also extrapolates costs in form of man-hours. So for example, if you have 1000 SF of laminate to install. You can know how long it takes your AVG Flooring Installer in your region to install 100 SF of laminate. Knowing that info and the avg cost (including markup, insurance, etc.) for flooring installer, you have everything you need. If you get a bid, multiply (Manhours required on avg to complete items in SOW) x (Avg. Cost of Individuals Performing Those Costs) = ROUGH IDEA OF WHAT REHAB SHOULD COST. And then if you have a handyman who is working on hourly rate, you have an idea of how long it should take him to perform the tasks you assign him.


I've included a link below as they can probably explain it better on their site than I can. Amazon doesn't have preview for them, but if you Google book titles, you can find free PDF samples pretty easily so you can get an idea for how things are broken down inside.


https://www.amazon.com/National-Repair-Remodeling-Estimator-2017/dp/1572183314/ref=pd_sim_14_5?_encoding=UTF8&pd_rd_i=1572183314&pd_rd_r=QGKDB03AJHGKRTS6KJH1&pd_rd_w=kYkQp&pd_rd_wg=CfVpC&psc=1&refRID=QGKDB03AJHGKRTS6KJH1

https://www.amazon.com/National-Home-Improvement-Estimator-2017/dp/1572183276/ref=pd_bxgy_14_img_3?_encoding=UTF8&pd_rd_i=1572183276&pd_rd_r=R2XCBZ0ET9KYVSASDE6P&pd_rd_w=tBLoF&pd_rd_wg=ZDqUd&psc=1&refRID=R2XCBZ0ET9KYVSASDE6P

These have been a HUGE asset for me in not getting one put over on me by contractors giving me quotes. Even to the point where I got licensed as a GC and I've been able to bring parts of the rehab crew in-house and have my own full-time crew of W-2 guys to rehab my properties. We are actually have our systems set up to the point, where I'm in process of expanding business to rehab properties other than just my own. Have a GC/Project Manager I've groomed who will largely handle that piece, which will provide me an additional income stream that I can live off of and invest in REI. None of that would have been impossible had I not had the cost book as I have no experience or cost history of my own to base estimates on. I have also developed some mutually beneficial relationships with other GCs and contractors who have acted as a "big brother" to me throughout, which has also helped. But that goes back to #2) PROBLEM SOLVING (No experience, how do I offset that weakness) and #3) PEOPLE SKILLS (how do I convince these people to take the time to help and advise me).

Lot's of good input, but nobody has said anything about generating a good business plan being the very first step.

How are you going to get paid? Hourly, or as a percentage of the project?

How much overhead will you have, what kind of insurance etc.

If you're going to be handling more in depth projects you'll probably be doing project management as well, i.e paying flooring subs or painters etc.

There is a great book on kindle, it's called "Markup and Profit"

https://www.amazon.com/Markup-Profit-Contractors-Guide-Revisited/dp/1572182717/ref=sr_1_1?keywords=markup+and+profit+stone&qid=1567475083&s=books&sr=1-1

It is geared more towards construction/specialty contracting, but most of it applies to what you're wanting to do as well. I use basically the same methods taught in this book when I do interior projects.

I use the method he describes, calculate my total cost to complete the job, then add my markup to cover overhead and profit.

One word of caution would be on having clients paying subs or paying for things directly. Remember, when there's a problem they're going to call you, not the store or the flooring guy, so marking these things up isn't being greedy or making free money, it's a reflection of the work you put in to bring it all together and the time YOU have to spend when things don't go exactly right.

I also hate working hourly. It's no fun spending 8 hours helping a client pick out a color combo for a epoxy floor and then having them bitch about paying you for 8 hours, but that 8 hours at $75 an hour on 2000 sqft of floor at $12 a foot isn't even noticeable if it's just rolled into the floor cost.

​

Sorry, a bit rambling, but it's late and I'm tired :)

Buy this book. Markup & Profit: A Contractor's Guide, Revisited https://www.amazon.com/dp/1572182717/ref=cm_sw_r_cp_api_9DPMybNWXW6S9 Read it a couple times front to back.

Not exactly what you're looking for, but this is a good resource for figuring out how to price out repairs:

https://www.amazon.com/Contractors-Pricing-Guide-2018-Residential/dp/1946872199/ref=sr_1_4?ie=UTF8&qid=1541901624&sr=8-4&keywords=rs+means

There's a lot of apps/sites/etc that provide repair estimates. RS Means is probably the most well-established of the bunch.