I am currently working on a wholesale deal right now. However, the house is in very bad conditions, and will most likely have to be rebuilt. It has a 10,000 sq. ft lot, the home itself is only about 800 sq. ft. But assuming you add some square footage, roughly to about 1200-1400 sq ft. what is your average new build cost for that size?
I have not worked with a property before that has to be a new build, this one however, I know does. I am in the Phoenix area, new builds in the area where the home is are selling for about 400-500K. Getting an average new build price will help me structure this deal, and see where I need to be at or get a better understanding. Thank you!
@Victor Barboza This is a local question. Most places have a shortage of construction labor, which has increased the cost, but your area may not be affected. It is almost always cheaper to rehab than to do new construction. If this is a wholesale deal, then it shouldn't matter to you what the cost is. If you are going to rehab it yourself, increasing the square footage will increase the value, but is not necessary to make money on the deal.
@Victor Barboza I have been doing new construction in Central Phx. For me if my sale price is 500k, there is an existing house there, and I'm building a 2000 sq ft house + 2 car garage I'd like to purchase around 180k. Now I'm also a GC so my build cost may be lower than somebody who needs to hire a GC.
@Victor Barboza This also assumes I'm knocking the existing house to the ground.
I would agree with @Aaron R. you're looking at a build cost in the range of $150- $200k, so I would suspect that most investors would not pay more than $175 - $200k. Feel free to PM me, I would be happy to help run some numbers.