Typical Rehab Budget for Live-In Flip
I am wondering what is a typical budget for a live-in flip. I am planning on buying a primary residence that I can get as a decent fixer-upper. It can be move-in ready and could use some TLC to increase the value of the home. What is a good strategy to use to reduce the list price when negotiating for a new home? One I know is days on the market but I would like to know a strategy more in terms of the work needing to be done on the property.
What is the typical rehab budget for a full gut versus a fixer-upper that needs some updating such as for the kitchen, bathroom, new carpet, roof, and/or driveway for example? Let's say the home is listed at $500k for easy math and homes newly renovated are worth $800k. My mind imagined it being $50-100k even at most. Would $50k be a decent budget to renovate a good chunk of the home? Would $100k be more than plenty to do an even greater job at making the home very much improved? I'm sure I would need a private/hard money lender before being able to refinance the property with a conventional lender to obtain funds for the home. Would a local credit union/bank be able to support this at purchase and/or once the rehab is completed? I would plan to put in a 5% down payment on the home.
My goal with this is to buy a cheaper home first, fix it up, and roll equity from that for the next big house/goal "dream" home in the future. Or this could end up being the dream home after all rehab is completed who knows?
Most Popular Reply
@Arron Paulino You need to come out of theory and into reality.
You can't say "the home is listed at $500k for easy math and homes newly renovated are worth $800k." and expect that to be real life. If those were actual numbers you'd jump all over it. That's a great deal in this market and 5 other investor would be making offers. Your profile says San Francisco which is expensive but there are opportunities in every backyard. Narrow your goals and start looking for real opportunities.
"What is the typical rehab budget for a full gut versus a fixer-upper that needs some updating" - Double your rehab budget. This depends on the neighborhood, material/finishes, custom touches, new roof, HVAC, electrical, plumbing, and ARV. Regardless if you live-in the property or not it's a numbers game. You must manage your time (and skills), manage contractors, stick to a budget, and follow a strategy.