Pricing-In Rehab Costs (Maine)

[Adam Shaw]

Hello BP Fam,

I am a fairly new real-estate investor from Bangor, Maine. Past general contracting experience, but have never much with full gut renovations. I am looking at a few foreclosures, as well as a short sale that need extensive gut renovation. The structures are sound, some have been gutted already, its basically needing complete renovation other than the structure itself. I will be doing my own labor with my partner, to keep sweat equity, but I am trying to ballpark the numbers here to get a reliable ARV.

I will be looking to pay cash for the properties, cash for renovations as well, then do a cash-out refinance in a year or so. I also have enough cash reserves to cover things in the even they go grossly overboard - but of course I want things to be in line with ARV.

Any help is greatly appreciated!

[Carl Hebert]

The ARV will not be affected by the by the costs of the demolition, labor, or materials. The ARV is going to be changed based on the type of remod you end up doing and mostly by what the surrounding area home values are.

You can ask your real estate agent what the area comps are before you get started and also find out what type of features are in those homes. basically you do not want to go overboard on renovations that will not give you the best bang for the dollars put in.

Example being going with granite when all the area homes have laminate...