We potentially found a really good deal. We are going to have contractors look at it to get an idea of what needs to be done but at first look it needs a complete gut then new walls, fixtures and appliances. It will also need new windows. Not sure about the condition of the floor yet.
My question is what is the most you have ever spend on rehabbing a property (single family home). I would be especially interested in hearing from people in the CT/NY area.
I'm not in your area, but the most that I ever spent was about $25,000. I don't hire GCs (I use handymen/women) and that keeps the cost down. I also work in first-time-buyer kind of homes (no $20,000 kitchen upgrades).
Thanks @Bryan L. That's helpful. We were thinking 35K but I am sure it will be more expensive here than it is in Tennessee. I meet a lot of people who are investing in Tennessee for some reason. Any insight?
I have invested over $50,000 and I don't know that I have a limit if the numbers work. Your total cost is the purchase, hold, and rehab. The rehab is the one that can vary from the estimate the most. This is especially true as the cost of rehab goes up. I budget an extra 20% to the estimated rehab cost.
I have done flips and bought buy and holds in Tennessee. The prices are reasonable and I have family there. A big reason is that I have been able to put together several agents who find properties and a contractor and some subs. Without them you are dead when investing at a distance.
answer your question I have spent over 250k on a rehab and as low as maybe 30k and everything in between.
I will try to help as much as I can. Last year we did close to 100 buy fix and sales. I see on an average B-F-S (meaning major cosmetic rehabs NOT gut jobs) on average we spend 35k. Now please understand we do nice rehabs in middle class areas but they also sale at or a little above ARV in a very short amount of time. I have attached a couple pics for you to look at.
Now we also do gut jobs to houses, but that is a totally different concept.
2. EMP's (Electrical Mechanical and Plumbing)
7. Longer holding times
Those items you do not normally have to have in a major cosmetic rehab, but in a gut job they always there. And those items will continue to go up.
I hope that helps some. If you have more specific questions let me know.
@Andrew Cordle Thanks so much, that is an awesome break down.
As long as the numbers work, its hard to say that I'd put finite limitations on anything. Just sold a rehab in Philadelphia purchased at $123k, put just under $100k in and sold at $345.
Every area is different, but when I walk into a potential purchase to rehab, I count windows and doors to be replaced, account for all systems and majors (kitchen, bath, roof) that need replacement and, per condition of house, I have an idea of cost per square foot that I tack on. This checklist serves me for just about the full spectrum. Hopefully, your local market has picked up like Philly has, but start thinking about debt servicing, holding costs... It takes time and practice to get comfortable and there is always something new to learn, but I think following a system has helped me focus and become automated so that tackling the learning curve and making adaptations is never that difficult.
Hope that helps,
Hilary. Where was your last flip if you don't mind. Any before and after pics.
This last project I worked on was in Francisville. For the record, I liked the blue brick, but I was quickly voted out. Admittedly, the results on the exterior were definitely more appealing.
It seems the low end is around $40 / SF to high end being about $80/SF depending on how fancy you want to get. Look for discounts. Here in Philly, as a REALTOR I get 25% off at Lowes and many contractors do too.
@Scott Gombar I am from Southington and rehab homes and also serve as a GC here in the local area as well. I am also a realtor as well and work pretty much exclusively with investors. If you need any info on the local market let me know I would be glad to help.
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