How deep should I go on this flip?

6 Replies

Hello everyone. I am looking to purchase a neighbors property (very distressed) in the next few months, location Glen Cove in Nassau County on Long Island. At first, the plan was to flip it, but now I want to use it as a flip to starter home. I plan to live in it 3-5 years before selling and moving onto something else. This is going to be a large project, my rehab budget is at $150k right now. I have access to the property so have been walking it with subcontractors to solidify this number. Everything is original and never been touched except replacement windows and siding that needs replacement now (house was built in 1962). I want to create a quality product for myself and then an end buyer without going overboard and too crazy with expensive finishes. Not sure if I should gut it all and redo every single aspect or try to preserve some. It’s easy to get carried away here since I will be living in it for a while, but I need to stay grounded and do what makes most sense from an investment point of view. Hoping you guys can give me some advice on some of the big categories and what extent I should address them:

(1) Siding- Old yellow vinyl siding. Pretty beat up in some areas. Could be power washed and cleaned up or replaced for around $14k. Pretty sure this is a big one for retail later. If I replace, should I paint over the brick on front a nice color to complement new siding?

(2) Windows- As I mentioned they are vinyl replacement windows, so not awful. Just need some cleaning up and a few have cracks that would need repair or replacement. I think I should be good leaving these.

(3) Sheetrock- I think a lot of the walls and ceilings can be preserved but they are pretty dirty, with wallpaper on some. Would require a good cleaning and some holes that would need repair. I am getting quotes now to re-sheetrock the entire house. I really have no idea what this will cost me yet. If it can bring my electrical and central air costs down then it may be well worth it to demo the whole place.

(4) Insulation- I’m not sure if this old insulation is very functional or if it was put in every place it needs to be. Hard to tell without taking down the walls. Do you guys think this is a must?

(5) Driveway/Walkway- The driveway is in great shape, Belgium block sides and brick apron. Only one car wide though. Should I expand this and make it wider or leave it? There is room to do so but will probably be ~$5k or so. Most driveways in my neighborhood are 2 cars wide. This house only has a one car garage. The walkway is beat up brick and definitely needs to be done. 

(6) Central Air- I am waiting on a quote back but this should be about $12k for 2 zones. I think this is pretty highly sought after in this area.

(7) Electrical- Needs to be upgraded to 200 amp service. Needs new meter and conduit. Very minimal outlets/lighting. Really no recessed lighting except for a few hallway lights, otherwise lamps in each room. Should I have them use what little wiring is there now and add whatever else necessary or just rip it all and fresh wiring everywhere? Doesn’t seem like much sense in using what is there. 

(8) Finishing Basement- Only a half basement but I would love to finish it and add a full bath and sauna. The sauna of course not necessary but is one of the things that I am adding just for my own pleasure the next few years. I feel like a sauna won’t add much value for resale but I think a third bathroom in the basement will. The basement being finished in general and some extra space should increase the value as well.

I plan on paying for an appraisal to get the as-is value and also supply the appraiser with my scope of work so that they can give me an estimated ARV. My plan is to weed out the best subcontractors over the next few months so that I can get this project done smoothly and then repeat the process on future flip projects using the same guys.

@Eric Telese, it definitely makes sense to not go too overboard with high end finishes, as the end goal is being a rental. I also think a FHA 203K loan would make great sense here, as you are looking to do renovations and live in it. I also know a lender that does construction loans for residential homes at good rates (which is hard to find). They're currently doing one for a client of mine in Port Washington. If you want their info, please PM me.

inside first so you can live in quickly. Sheet rock, wiring, reinsulation. The materials is just 19.95 each. Outside comes later.

Updated over 2 years ago

sorry import materials have moved up in price thanks to tariff. Replacement new drywall costs $11-20 each.... 2x4ftx0.5"

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Originally posted by @Wayne Brooks:

It makes no sense to replace the Sheetrock.

What about to re-insulate? Think there is a chance sheetrock was made with asbestos?