Two weeks ago we had the last installment of our four-part Construction 101 webinar series. The final episode focused on change orders and going through a final punch list. In case you missed it, you can check out the webinar here. We followed our normal format, with 30 minutes of information from James Dainard, and 30 minutes of questions from our viewers. Each week we like to recap the questions to give in-depth answers to some of the issues brought up by our viewers. Click on the links below to be directed to the in-depth answers. Stay tuned for our next webinar, 2018 Market Wrap Up, James Dainard will host a discussion on the 2018 market trends and what to expect heading into 2019!
I’m working on a place that needs a crawl space, attic clean, and insulation. How do I come up with pricing?
Budgeting an attic and crawl space can be tricky because there are many elements factoring into the overall cost. For the “average” attic job a reasonable price fall between $2,000-3,000. Attic work is subjective, there are a lot of variables to consider, but there are objective ways to keep your cost down.
When deciding on the type of insulation to use blow-in insulation is the cheapest option. As a general rule of thumb, blow-in insulation should make a smaller dent in your budget at $1 per square foot. Another cost-saving benefit is the ease of installation. Blow-in insulation is a simple installation process leaving a lot of room for savings. Consider purchasing the insulation and then hiring a handyman to install it. Installation should take roughly two hours and purchasing the product and labor separately can create more space in your budget.
Crawl spaces depend largely on the damage. Typically, a clean-out can run anywhere from $700-$1,100, depending on the job that needs to be done.
Crawl spaces can be much more expensive especially if pest removal is required, which can quickly run up the cost. If it’s a case of cleaning out the cobwebs and making space nicer without pest removal it should fall under $1,100.
Is a plumber expensive? How should I pay a plumber?
Plumbers can be expensive, but there are ways to negotiate a smart contract with plumbers. Knowing how to negotiate contracts is tricky and you have to understand both sides of the agreement. Contractors want to be paid for their work, and you need to find a fair balance between keeping your costs low and paying a fair wage. One of the ways we have been able to maintain a balance with a plumber is to pay them per square foot, or per fixture. If a plumber charges hourly it can run $50-$100 per hour, we simply don’t have room in the budget for that.
Can you tell us more about the current market conditions?
This is a big question that we’re getting a lot lately, we published a blog post all about market conditions at the beginning of November, which you can find here. Additionally, in December we will be hosting a 2018 Market Wrap Up Webinar, which you can register for here. When the market initially changed, there was a lot of talk about a bubble. Real estate is like any other market, it’s going to fluctuate and plateau. Think of houses as a product, just like any other stock, if the stock appreciates beyond its value it will eventually correct back down. We’re not in a bubble, and we’re not going in the direction of a bubble.
The economy is strong in the Seattle area, housing prices are starting to correct back to the actual value of the homes. Our market saw an unprecedented and unsustainable boom. Now we’re in a period where buyers have a chance to catch up to the market.
The place we’re in now is ideal for both buyers and sellers. Buyers have a chance to find a home, and sellers have to be held accountable for quality workmanship and correctly pricing their homes.
How do you keep contractors within your timeline?
Babysitting. We do weekly site visits to walk the property and find out what has been accomplished during the week. Every single one of my projects has a damages clause which includes a clear written scope of work for what is expected from the contractor. Within the clause, I put damages anywhere between $150-250 per day. It can add up quickly and gives contractors the motivation to stay on task.
Do you let your contractors do other jobs while working on your projects?
The hardest part of this business is controlling your investment because you can’t control your contractor. As an investor, I have to respect that my contractor has his/her own business. With that in mind, I also have to be diligent in determining if their other business is getting in the way of my work getting done. If they are causing delays on my projects because they are also working on other projects, then I cut them off and find someone else. However, if they have other projects that don’t interfere with my work, then I don’t have any control over how they operate their own business.
Any tricks when the city asks you to do a seismic retrofit?
Just do it. Typically the price runs around $4,000 total for a seismic retrofit, and if the city asks you to do it, you have to do it. There’s an additional ethical issue when it comes to seismic upgrades. Knowing that Seattle has the potential for earthquakes, it’s not a matter of if, but a matter of when. Technology has changed drastically in the years since these houses were built, we have a responsibility to buyers to update and make their homes as safe as we can.