When it comes to house flipping, it pays to have a plan. As any successful flipper will tell you, a good Scope of Work (SOW) estimate is critical to the success of any reno project.
Map It Out
Basically, a SOW is a roadmap—laying out the path you will need to follow from the project’s start to finish. An effective SOW establishes the parameters of the renovation from the moment the property is under contract to the time it is sold. The SOW is a detailed document that describes the repair work that needs to be done to make the house sellable. It should include an overview of the project as well as individual line items of the work necessary to complete the job.
Make It Useful
Well, first things first. We recommend that you find a licensed contractor to walk the house with you so that you have a realistic idea of what repairs need to be made and how much they will cost. Use this information to put together an itemized SOW. It should include estimates for labor and materials by room or major category.
Where To Start
As a starting point in the process, we have created a sample SOW spreadsheet that is available in three formats - as a printable PDF, as an Excel spreadsheet and as a Google Sheet. Recently updated based on client feedback, our SOW template is a great jumping off point for your project. For the PDF, simply click on the link and save the file directly to your computer. Similarly, you may click on the link for the Excel spreadsheet and work directly in the file, saving as you go. For the Google Sheet, you will need to first login to your Google account and then make a copy.
Why You Need One
For the simple fact that money doesn’t grow on trees, it is in your best interests to create a SOW and stick to it. By sorting out what needs to be done and at what cost, you will be able to clearly assess the viability of the project, right upfront. A higher than expected SOW can be a red flag, causing you to pass a potential project by. But, assuming the SOW is in line with expectations, it can also be a great tool to keep the project moving along on schedule. It also facilitates the funding process as many lenders, including NavCap, will rely on the SOW when approving draw payments.
Still have questions about your SOW? Or maybe you have the SOW figured out and are looking for competitive financing for your next project. Either way, NavCap is happy to help. Put our local team to work for you. Give us a call at 443.603.0193 or email us at info@gonavcap.com.