I'm pretty sure there are a few contractors in here, I have some stupid questions

Fir the last few years I've pretty much been obsessed with home construction, yet I know absolutely nothing about it. I like to watch all the HGTV shows, but I only like the ones that focus on the construction and not the fake drama they create for the show.

I'm well aware that TV isn't realistic, but I always wonder how the contractors do their bidding in these shows. They show up, Walk the property for what seems like a few minutes, and then give the homeowner a price for the remodel. I'm really curious where they get the numbers from. Do they just know from experience roughly how much everything will cost? For example, they will walk into a kitchen and immediately say "this is about 25 grand" to redo.

Also, on these home flipping shows it seems like the contractors are the ones doing all of the work, so why don't they just buy the homes themselves and make some cash?

 

It’s a ballpark estimate not a contract. Contractors don’t want the risk and capital gains tax from flipping houses plays a role in question 2.

 

In the real world sometimes till it is all said and done you work for a $ 1.00 /hour.

You seldom hear those stories.

Being a TV show any numbers can be tossed out. They have researchers that find quotes add a bunch together and give a average number.

 

“Also, on these home flipping shows it seems like the contractors are the ones doing all of the work, so why don't they just buy the homes themselves and make some cash?“

One word… Entertainment.

 

I’d agree those numbers on the shows are ballparks. If the contractor has been working with the GC for a while, they will know what hardware, fixtures, etc the GC likes to use. So sometimes they can throw an estimate based off of the project. It’s not gonna be down to the T on the price but it can give the GC numbers to work with.

There is a lot to a remodel and cost can vary quite a bit. It all depends on the structure underneath and all the other trades involved. Electric/ plumbing/ framing/ whether it needs engineers or not. Permits and inspections.

Those shows are definitely hyped up to make it seem like there is no money left to be made but somehow they do it and profit 50-100k. It can be done but for the sake of the show they have to add the drama in.

 

You gotta realize that what you see on TV are the edited cliff notes of MONTHS of prep work and then they hit the "go button" for the tv cameras.

There were some interviews with the property brothers awhile back where they mentioned taking months to setup a season, and then film all the houses at various stages over the next x months, then post production, tv air, etc..

GC's or any trade for that matter, can give you a good ball park just based on experience and general expectation of finish quality.

The GC's don't get in on the flipping action for a few reasons. One of them being personal financial risk- it's a lot cheaper for them to play with other peoples money and be assured a pay check, than: get a loan, buy a house, pay a design team, do the work, sell it, etc..

What you see, especially on flip or flop and it's spin offs, is that the hosts are primarily acting (note acting) as investors, but I'd bet they don't have their own money on the line.

Google your favorite HGTV show and you'll find horror stories for each one. They do the work and run, and it's often sub par because of the time frame-the owners are left with no one to call back afterwards.

 

Wait, you mean reality TV isn't really reality?

 

@ the OP though, I suggest you find a project you wanna do and go for it. Start small. Remodel a bathroom. There are TONS of resources for DIYers at this point. You can make a pretty big impact on your house for a lot less than advertised when you do the labor part of it.

I worked for a GC in high school. Often times I was just extra hands for whichever trade was onsite that day. I didn't enjoy it at the time, but learned an absolute ton. This spring I bought my first home, and am just wrapping up a little interior facelift- gut two bathrooms and a fireplace, new finishes throughout, new flooring and trim, paint throughout, light fixtures, etc... Spent less than 35k just shopping smart and doing everything I could myself. Our realtor wants us to put it back on the market for $250k more. We wont, cause we're exhausted and we want to live here. So it's certainly possible to hit those big flip numbers.

 

I work for a large commercial general contractor. First off, the shows are scripted.

In real life, it’s historical costs applied by square foot and activity for conceptual estimates.

GMPs are built on actual subcontractor bids.

 

What's a GMP?

 

good question- I had to look that up: guaranteed maximum price.

 

Guaranteed Maximum Price. Most commercial contracts are based upon a GMP built off of a bid drawing package.