Is this too much for a rehab budget?

Question

Hey BP just wondering about something. I'm putting together a few reports for the banks I'm going to be going to for lending and my contractor put together a few quotes for me to redo the bathrooms and kitchens on a 4 plex I'm looking at. In total the rehab will be around 80k so I'm wondering is that way too high?? or am I just overthinking this (which is something i tend to do for big decisions).

Brian Pulaski · Answer

Kitchen and bath(s) only? I assume one bath per unit? I also assume basic rental grade? How much hvac, electrical and plumbing work is needed? Permits? How big? Bathtubs or showers? What type of materials, new appliances? There are tons of questions needed to be answered before anyone could tell you.

I can see $20k /each apartment being a good budget or it being high...'or it being low...

Joe Villeneuve · Answer

That's like asking if $30k is too much to pay for a car.  That's $20k per unit, however:

1 - What are you doing in each unit?

2 - What quality level are you going to end up at?

3 - Are you doing them all the same and thus should be able to get a volume discount on materials?

Those are just a few of the questions that need answers first.

Jackson Pontsler · Answer

My wife and I are rehabing a duplex 1500 sqft each side and our budget is 100k.  So I personally think you might be a bit low.  If your contractor is quoting at 80k then add a contingency of 15% because *@#!@!$# happens, and if you didn't plan for it you will pay for it.

Is this too much for a rehab budget?

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