stipulated or lump sum<\/a>, meaning that you get one price and it\u2019s fixed for the life of the project, excluding any additional work or change orders.<\/p>\n\n\n\nA cost plus contract means that the price of the renovation is not fixed, but based on actuals. The contractor receives a flat or fixed fee for his or her services. Costs associated with the project such as electrical, plumbing or drywall work are budgeted in an estimate, but if a price exceeds the budget, the owner is ultimately responsible to pay for the overage. Conversely, if the price for work is less than the budget, the owner realizes those savings.<\/p>\n\n\n\n
With the market being so volatile regarding material prices and labor shortages, risk is high for both contractors and owners looking to complete a remodel. We were willing to give this model a try because we know Kendal is extremely meticulous and conservative when performing his analysis and creating estimates. <\/p>\n\n\n\n
Additionally, as long distance investors, we value the ability to get all our services from one shop. We have worked with InvestOKC since 2019, purchasing and renovating all but two of our six properties with this group. The first two houses we bought only required cosmetic renovations so we used our property manager\u2019s handyman and preferred flooring contact to complete that work.<\/p>\n\n\n\n
As mentioned, the cost plus model doesn\u2019t have a fixed price so communication with the project manager is critical to monitor cost and determine what scope items need to be scrapped or modified to keep margins in line. Savings could mean we keep some money in our pocket (for future investments) or we can add some items that may be on our property manager\u2019s wish list to make it more appealing to tenants. <\/p>\n\n\n\n
The renovations are currently underway at Property #6 so we\u2019ll provide an update after the project is complete to review the new contract model and the remodel process.<\/p>\n\n\n\n
Working on an investment project that you’d like to share or have story about using a cost plus contract? Leave a comment below or email <\/span>mama@msfiremama.com<\/a> <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"In the thick of our move south in early summer, we purchased Property #6 in Oklahoma City. Property #6 will be the first time we will work directly with Kendal to renovate the place and also use a contract that follows the cost plus model.<\/p>\n","protected":false},"author":1,"featured_media":571,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[17,43,18,16,73,69],"_links":{"self":[{"href":"https:\/\/msfiremama.com\/wp-json\/wp\/v2\/posts\/561"}],"collection":[{"href":"https:\/\/msfiremama.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/msfiremama.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/msfiremama.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/msfiremama.com\/wp-json\/wp\/v2\/comments?post=561"}],"version-history":[{"count":0,"href":"https:\/\/msfiremama.com\/wp-json\/wp\/v2\/posts\/561\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/msfiremama.com\/wp-json\/wp\/v2\/media\/571"}],"wp:attachment":[{"href":"https:\/\/msfiremama.com\/wp-json\/wp\/v2\/media?parent=561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/msfiremama.com\/wp-json\/wp\/v2\/categories?post=561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/msfiremama.com\/wp-json\/wp\/v2\/tags?post=561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}