Build a Scope of Work with No Experience

TLDR

You do not have time to pull a contractor in for every house you might buy. This free app gives you a quick rehab number to plug into deal math, so you can decide to buy before you ever write a full scope.

Table of Contents

• Why You Need A Fast Rehab Number
• The Three Stages Of A Buy
• The Quick Six
• Auto Ads: The Stuff I Always Add
• Replacements: The HGTV Trap
• Extras And The Advanced Tab
• FAQ
• Related

Why You Need A Fast Rehab Number

You are not going to drag a contractor through every house you are thinking about buying. The math does not work. You need a fast way to get a rehab price that is good enough to plug into your buy math.

Most people teach a price per square foot method for this. It breaks down the second one thing goes wrong. A gut with structural problems does not cost the same per foot as a cosmetic. So I built an app that handles this for you. It is free.

Think about a big vacation. Hotels are a couple hundred bucks a night. Food is another couple hundred. Drinks are priceless. Those numbers are in your head already. The one you really need is the plane ticket, because the plane ticket decides if the trip happens at all. The rehab number is your plane ticket. This app gives you that number fast.

If you can’t estimate the rehab fast, you can’t decide fast. And deals go to fast deciders.

The Three Stages Of A Buy

There are three different times in a flip where you touch the scope of work:

1. Deal analysis. Should I buy this house? What should I pay?
2. Due diligence. Now that I am under contract, what is the actual scope?
3. Project management. Hand the scope to a contractor and run the job.

This app is for stage one, the deal analysis. It is not your bid document. It is not your due diligence packet. It is the thing that tells you whether to keep driving or walk away.

Pro Tip

Do not try to make the app perfect. A fast good-enough number beats a slow perfect one, because the house is already under contract with someone else while you are still building a spreadsheet.

The Quick Six

The quick six is the part of the app that decides what kind of flip you are looking at. Six jobs. If they are all fine, you have a cosmetic. If they are all trashed, you have a gut.

Each job has three states: as-is, repair, or replace. As-is is zero. Repair is cheaper than replace. Replace is full.

If you have to replace all six, you have a gut flip on your hands. That means the drywall is coming off, so drywall gets added. New drywall means you need new insulation too. There are grandfathering rules that say if something is inadequate but was installed right at the time, it can stay. Once you open the walls, you lose the grandfather and everything has to come up to current code.

A cosmetic flip has none of that. No drywall bid, no insulation bid, no big demo line. A renovation sits in the middle. I still budget a small repair number for drywall on a renovation because there are always holes.

The quick six is the speed test. Six answers and you know what kind of house you are buying.

Auto Ads: The Stuff I Always Add

Auto ads are the jobs I put on every flip I ever buy. The app sets these to replace at 100% on cosmetic, renovation, and gut. On a landlord flip they are mostly off, because a landlord flip is about safety and liability, not finishes.

• LVP floors throughout.
• Interior paint by square foot.
• hardware package. All door handles, hinges, cabinet pulls, cabinet hinges, light fixtures, plumbing fixtures the same finish. Black matte, stainless, brushed nickel, pick one and run it the whole house.
• Basic landscaping. I put a $500 budget. I rarely spend more. We are not hardscaping.
• Handyman budget for the punch list. No matter how good your PM is, there is a list at the end and nobody wants to come back.
• Construction clean at the end.

The hardware match is the thing most people skip. It is also the thing that makes a house feel put together to a buyer or renter. One finish everywhere.

Pro Tip

The handyman budget is not optional. You are paying for it either way. You either pay for it in the budget or you pay for it in delay.

Replacements: The HGTV Trap

Replacements are the visible stuff. Cabinets, countertops, trim, doors, vanities, backsplash, tile. This is what buyers notice and what most flippers get wrong.

The hgtv dilemma is real. People watch shows and then try to do a show-level finish in a house that cannot support it. You do construction comps the same way you do sales comps. Look at what sold or rented in that neighborhood recently. Shaker cabinets or painted. Quartz or laminate. Tile or sheet vinyl. Match the baseline for that neighborhood and stop. Doing more than the neighborhood is speculation. Nobody is paying you extra for it.

The replacements have three states on most items, with some exceptions:

• Countertops. As-is or replace. You do not repair a countertop.
• Backsplash. As-is or replace.
• Kitchen cabinets. As-is, repair, or replace. A repair on cabinets is a paint job. Same on vanities.
• Shower and tub. You can refinish a tub and surround for around $500. I do this on cosmetic flips all the time.
• Exterior paint. As-is or replace. Usually not needed on cosmetic. Usually needed on a full renovation.

The severity slider nudges each price up or down. Bigger kitchen? Cabinet number goes up. Smaller than standard? It goes down. Nicer neighborhood that needs solid doors? Trim and doors go up.

Common Mistake

Doing what you would do if you lived there. You are not going to live there. Match the neighborhood and stop.

Extras And The Advanced Tab

Extras are the one-offs I try not to touch. Framing modifications, decks, fences, garage doors, shower doors, tree removal, cleanouts, drainage work. I default them all to zero and add them only when I have to.

Framing changes are the most expensive extra because they open cans of worms. You add a wall, you need electrical in it. Touching electrical in one spot makes you touch it somewhere else. I avoid floor plan changes.

The advanced tab is where the magic hides:

• Financial contingency. Default 10%. I sometimes bump to 20% on older houses. This is money escrowed for what you do not see yet.
• The juice. A small bump on the rehab number so my acquisition target lands a little lower. A lower anchor to start negotiations at when I am writing an offer.

Then property setup. Square feet, full baths, half baths. That is it for deal analysis. You can fill in more later when you are actually building the scope of work. This is not spreadsheet warrioring.

Speed on the front end. Detail on the back end.

FAQ

What is the difference between the quick six and the whole scope?

The quick six decides the flip type. It is six jobs. The whole scope is the actual SOW I hand to a contractor at project management time, which has line items I do not worry about for a deal decision.

Can I just use price per square foot?

You can for cosmetics in a neighborhood you already know cold. The second a quick six item breaks, price per square foot lies to you. A gut flip at $30 per foot will kill you. A cosmetic at $30 per foot is high. The jobs drive the number, not the square feet.

I’m brand new. What should I set the contingency to?

Start at 20%. When you have ten projects under your belt you can defend dropping to 10%. Your early projects have more surprises because you are still learning what to look for.

What if I’m planning a full gut with floor plan changes?

Use the app for your first pass, then add a framing line as an extra. Expect your contingency to do real work. Gut flips with framing changes are the projects where the scope illusion does the most damage.

Do I need to walk the house to use the app?

Not for the first pass. You can sit in your truck in the driveway and put as-is, repair, or replace on six items based on the listing photos and a peek through the windows. If the quick six number works, then you walk it.