Completely gutted house and estimating rehab costs

Investor · Saint Charles, MO · Member since 2015 · 9 posts · 1 vote

I met with a guy yesterday who is selling a house in St Louis. He has completely gutted the house, roof is only 1 year old, inside is just studs. There is a "newer" electrical panal, but that is basically it. Will need all systems . . . will basically need everything. House is only approx 900 sq ft (2b/1b) with rough in for another bathroom in basement. How do I begin even determining cost for that or is that the kind of rehab a beginner like me should just avoid in the first place?

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David RobertsonBusiness Member

Flipper/Rehabber · Kansas City, MO · Member since 2010 · 758 posts · 780 votes

11y

Unless you can find a reputable contractor that can provide a quote to rehab the property, I would avoid this type of project if you don't know how to estimate repair costs...

Here's what I would do:

1. As recommended by Paul, buy JScotts book on Estimating Rehab Costs to get educated on estimating costs...

2. Take some notes and populate those costs into a spreadsheet.

3. Talk to local contractors in your market and tailor the costs in the spreadsheet to meet your local market and specific project needs.

4. Practice Estimating and Analyzing Deals...Analyze as many deals as possible, until you start to get comfortable with the #s and the math...

5. Find a property that you are comfortable with estimating and managing...To help minimize risk, partner with a mentor or contractor that you trust that has experience flipping houses...

6. Buy the property, rehab the property, and learn from your mistakes...

7. Modify your spreadsheet costs and estimating techniques to account for lessons learned...

8. Buy another property...learn from those mistakes...rinse and repeat :)

FlipperForce

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James Syed
Real Estate Broker · Mount Olive, IL · Member since 2013 · 1k+ posts · 310 votes
11y
@Jonathan McClintock
I have rehabbed a few properties and I am about an hour and half away from you. I estimated your cost to be between $20,000 - $30,000. If you are spending more than $30,000, there is a problem there, unless you want to go and putting things in the house that Million dollar houses carry.
J Scott book is a great book for rehabbing knowledge especially rehab cost.
Hope it helps.
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Tom Brooks
Jupiter, FL · Member since 2014 · 95 posts · 32 votes
11y
The great thing about projects like these is that you know exactly what you are getting into. It might actually be easier to price out because you don't have any surprises when everything is exposed.
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Barbara G.
Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
11y
How in the world can you rehab a gutted house for $20,000? What contractor can you find who will donate his time and materials to someone?? You are talking a new kitchen, a New Bath, New Walls, sheet Rock, Electrical, Plans, Plumbing, Painting, appliances . HVAC and PLUS
As a number of BP people have said in this post this is much more then double $20,000.
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Jassem A.
Investor · PA · Member since 2013 · 1k+ posts · 602 votes
11y
@Manolo D.
By gut-out I meant little/no exterior work and sub floors in tact except maybe bathroom and kitchen around the plumbing stack. For the roof, siding, subfloors, etc you would be looking at another 10k easily.
Most of the time when I buy run-down properties, they only need some plumbing repairs, electrical repairs, flooring, a couple base cabinets, wall repair and a spray paint job and we are talking 5k-10k in total. Ading hvac would potentially double that number unless there's already ductwork. If there's little or no rock on the walls and electrical/plumbing is shot/stolen then it will go up to 10-20k or more.
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