Guide RENOVATION INFORMATION
Review these items if your clients want a fixer upper
We don’t want to just help you find the right home, we want to also help you make it your own.
Here is what you need to know about construction before we get started :
1. Construction & construction loans can be expensive.
To do construction or to get a construction loan you ultimately will need to have cash.
Most construction loans require 20% down for the entire project (purchase + rehab).
Projects can range from $10-15k for just paint all the way up to $150k+ for full on renovations.
****IF YOUR CLIENT DOES NOT HAVE CASH, THEY CAN NOT DO A REMODEL OR FIXER UPPER. If they only have enough for 5-15% down, they need to buy a turn key house.
2. The Contractor gets involved after we get a home under contract.
Because our contractors time is limited, we do not bring them out for estimates until after we get a home under contract.
3. 6th Ave does not normally take on jobs under $50,000.
That said, we will gladly provide our Guides with access to our subcontractors. We will also help with advice and questions. We want you to be set up for success. This will save your clients a substantial amount of money by not having to pay a middle man, supervisor, and project manager. They are getting access to our workers, with out having to pay 6th Ave Profit.
If a job is under $50k, Guides can (and should) assist with getting bids for their clients and scheduling the subcontractor.
EXAMPLE : A client wants to replace the HVAC, roof, paint the house, level the foundation, add in a few can lights, refinish the hard wood floors, and install new countertops.
In this instance our Renovation Team will : 1) Provide an estimate range of costs. 2) Give you the contact info for our preferred subs. 3) Answer any questions that come up and offer advice and solutions.
The Guide will then : 1) Call subs to get firm pricing or connect their clients with the subs to get pricing 2) Once they have formal pricing on services, create a budget and plan with their clients. 3) Schedule the subs or help their clients schedule the subs.
The Client will be responsible for : 1) Communicating with subs post closing. 2) Scheduling subs. 3) Paying the subcontractor.
The difference between an Estimate and a Bid.
Getting a formal bid takes a ton of work, time, and energy. It involves bringing subs out to a site and often will require formal plans. This is why our contractors will give you a rough estimate range upon initial visit.
The contractor will give you the range before the option period expires. This way you and your client can decide if the project works with their budget and if they want to move forward with the purchase.
If their range sounds within your budget, you can then chose to formally engage the contractor to provide you with a formal bid for the job. This normally will be an initial fee of $1,000-2,000 to formally engage and order a bid. This fee will be credited to the job.
*Note: this will sometimes require formal architectural plans to accurately bid out the job and can take up to a few weeks to complete.
How long does a renovation take?
Most construction projects generally take 3 - 9 months.
6th Ave Homes does things right.
You get what you pay for. We are not the cheapest construction company in town, but we are some of the best.
We make sure your job is done right the first time.
We use a “Cost Plus” model, where we add 15-20% profit on top of the actual expenses. We provide the client with the actual expenses, so there is full transparency on the real costs and our actual profit. This also allows the client to potentially save money.
Included in the “Cost Plus” model, we charge the client our actual costs associated with our Project Manager, Superintendent, Admin, and Company Overhead. Each job requires labor and supervision on our end that we treat as those as hard expenses passed onto the customer.
The costs and true expenses associated with our Supervision and Admin labor for a job can add up quickly. This is why 6th Ave Renovation does not normally take on jobs under $50,000. It is not normally cost effective for the client to pay for our services on smaller jobs. This is why we offer access directly to our subs to our Brokerage clients.
Making an Offer
1. If your buyers want to remodel their new house after understanding the above items, then guide them through the process.
Before submitting an offer, run comps to ensure the house will appraise once it is finished
It may seem like a steal now, but the appraisal will be based off the finish plans of the house
Ask for a longer option period (10-14 days). You will need this to bring in contractors and designers to get a bid. Most will not show up until you are under contract on a house
2. Once offer is accepted, schedule contractors to provide bids the same day you are getting the inspection
Your clients are not required to use 6AH for their renovation project
3. Work with their lender to ensure they will qualify for a construction loan and finalize details they need for a successful contract
*Note: they typically require 20% down and a 45 day closing
If you are looking to tackle your own renovation for your own personal home, we want to help you.
HOW THIS WORKS :
Please notify ownership and project managers if you are looking to tackle your own renovation. We want to make sure their is transparency across the board within our team. Being clear is kind and we want to make sure we are all communicating well.
We can provide you with an estimate range just like our normal clients.
If this range looks good to you, you can engage our team for a formal bid. As with our normal clients, we will ask for a deposit to cover the time involved creating the bid. This deposit will be credited towards your job.
We will use a “Cost Plus” method, just like we do with our clients. You will get transparency and be able to see the true costs of your job. Just know that we will also charge our actual fixed labor & overhead costs associated with our Project Managers, Superintendents, and Admin. This help cover our actual expenses for taking on your job.
We charge our customers 15-20% profit for each renovation job. But since you are on the team, we will reduce our profit down to 5%. This means you are getting a discount of 66-75% OFF. In turn, we also offer our team members a reduced fee when buying and selling real estate of 1% vs 3%. If they buy a house with us, we will refund them 2% of the sales price.
If your job is under $50,000, we will give you access to our sub contractors. This way you can save money by hiring them directly. We will also be available for advice and support.