Hi bigger pockets, I've been spending a ton of time reading the forums and I love it! Hell, I went to engineering school and I feel like I learn more on here than I did in school!

I'm currently in the process of finding a place to rent out/house hack in Canton, Baltimore. I feel like I've found a perfect place that fantastic buy and hold; however, the place is a foreclosure and it needs plenty of work. I've shot off a few emails to try and get some estimates but I'd like to hear what you guys think? I've done the numbers and with a conversion from 3-4 bedrooms, I've calculated a ROI at minimum to be17% fully rented and about 7% if I'm living there. This would be minimum based on if all things go to hell, like ARV too low, etc.

Here are the numbers and the major things that I think need to be done.

Details: 3 bedroom 1 bath, 1400sq ft row home.
Wish: 4 bedrooms 2.5 bath.

The bedroom layouts are fine but absolutely need to be redone. (The walls are the junk and the entire house has drop ceilings). Additionally, the basement is completely unfinished. The basement also appears to have some structural issues. Old owners did a patch job but there is bowing of the brick and seemingly some concrete separation from the wall. The basement door also shows a slight sag. As for the separation, I'm no expert but I think it's a possibility that the previous owners started a french drain project but gave up..

How much money would you expect a finished basement with added bath and structural fix, gutted and redone rooms, complete conversion from drop ceiling to drywall, an expanded kitchen/reno, and added bathroom to the main floor, cost?

I'm really trying to get a feel for what I'm in for and so any thoughts, advice, or insight for the newbie would be fantastic!! Also, if anyone is interested I'd be willing to go over more of the number details of the potential rehab!

Do you have J Scott's book "The Book on Estimating Rehab Costs" (ISBN 978-0-9889737-1-8)? If so have you read it cover to cover?

But to throw numbers around, I spent about $40K redoing the basement/cellar of my 1000 sq ft personal DC residence a few years ago, that included 3 french drains (2 turtledoves minus a partridge in a pear tree), but in that is a whole bunch of little stuff that adds up. That's the great thing about J Scott's book he writes about those little details so when you walk through, look at various things you can add up a general ball park number.

Originally posted by @M Marie M. :

Do you have J Scott's book "The Book on Estimating Rehab Costs" (ISBN 978-0-9889737-1-8)? If so have you read it cover to cover?

But to throw numbers around, I spent about $40K redoing the basement/cellar of my 1000 sq ft personal DC residence a few years ago, that included 3 french drains (2 turtledoves minus a partridge in a pear tree), but in that is a whole bunch of little stuff that adds up. That's the great thing about J Scott's book he writes about those little details so when you walk through, look at various things you can add up a general ball park number.

Thanks for the kind words!

For a gut rehab of a row home in Baltimore, I would probably figure $50-70/sf, assuming you didn't need to dig out the basement or do any major structural work.  Demo can be challenging (trying to get a dumpster in there), and sometimes you have to get creative on the floor plans, but if you plan it well, those row homes can really come out nice...

We just spent about $140-150k to gut rehab a house in Brewers Hill /Canton, 1,500 sf end unit on Hudson St

If you are going to do a gut, make sure you do CHAP tax credit.

I'd be happy to help analyze the deal for you

100/sf is a little bit high, it's like LA prices. I guess the finishes are almost top of the line or something. for row houses, finishes tend to be on lower to mid end or it will defeat the purpose of the row house, i mean, if you put sealed hardwood on a row house, it wouldn't make sense spending too much when arv caps it as a row house. just my thoughts.

@Manolo D. where @Kodie Altvater is looking in Canton, there aren't a lot of unattached SFH, if any. So townhouse/row houses are pretty much the only game in that neighborhood and those townhomes can go for something in the $300-$600K range. So the idea that townhomes are low end or mid range does not apply in this case.

@Manolo D. - 1,500sf above grade plus 750sf below grade. We also built a rear deck and roof deck. Reframed the whole inside, plus had to do wood frame Windows and other items to meet historical guidelines for a tax credit.

I actually have the book on order! I ordered it just last week. Hopefully Amazon makes my Christmas wish come true soon. ;) thanks for the great advice!!

@Terry Royce That would hit the ballpark figure then, 2200ish sf would much more sense. @M Marie M. , oops, there goes my ignorance on markets, lol. most "row" houses here are 5-10 houses stuck to each other, they usually just put in the cheapest materials to just be called a "house", most buyers rip of 30-60% of the finishes and install their own. we are talking about laminate countertops, $1/sf floors, osb cabinets, etc.

Originally posted by @Manolo D. :

100/sf is a little bit high, it's like LA prices. I guess the finishes are almost top of the line or something. for row houses, finishes tend to be on lower to mid end or it will defeat the purpose of the row house, i mean, if you put sealed hardwood on a row house, it wouldn't make sense spending too much when arv caps it as a row house. just my thoughts.

Most of the row homes in Baltimore are 100+ years old, and the ones being purchased by investors in nicer areas are being turned into higher-end living spaces.  Many of them are selling for $200+/sf, which in Baltimore, is on the higher-end of the scale...

@J Scott I do assume that land and permit wait/costs are low in those areas, hence the high-end finishes despite being 200+/sf right? I'm trying to compare non-CA markets and trying to understand why the low cost builds. Does MD have compliance requirements on 100+ year-old buildings? I would imagine you would need to match inside finishes while maintaining the ancient outside looks?

Honestly Canton is hard to put a number on for how much a rehab will cost.  There are always all different types of shapes and sizes when it comes to townhouses.  Very unique to Baltimore.  If your a newbie and don't have a normal contractor, I would think 75-80 dollars per sq ft.  Permit costs aren't low, but they aren't DC prices.  Waits for the permits is for the most part are a couple of weeks.  As Terry, the chap tax is a big deal.  For that all you have to maintain is the outside look, and or take paint/stone facade off the front of the building.  There isn't any compliance for old houses other than structural, and the basement has to be 6 foot 100 or higher(maybe its 7 feet, not sure).  BTW, everything is more expensive in CA, you can't even compare it to a place like Baltimore.

@Ian Barnes True, CA has the most expensive permits and has the longest wait times, well, depending on the city most of the time, but they mostly have half day offices and half day inspections, and most don't have Friday offices (la county law). by volume, they flood review paperworks to third party architects which in turn review turn around for 1 week, then by the third correction, it's now week 4. If you follow all testing requirements, good luck on the timeline and costs. I pull permits over the counter most of the time, so it is smooth flowing for me, so far.

@Kodie Altvater  

costs are ultimately a factor of 2 items, if you're efficient: labor+ materials.

the goal is to arrive as close as possible to just those 2 factors with as little add-on as possible. add-on being profit, a companies overhead, etc. labor and materials are unavoidable (as well as other stuff like permits)....so how does one arrive at those costs? how much do people get paid? good question. usually making a phone call or 10 is a good way to find out. Other successful people can tell you what they pay labor to do certain things. start getting estimates, but ask for labor only estimates. find out specifics. the more specific you can get someone to be, the more the process of elimination can tell you......Then materials, how much work are you willing to do to find out? As an engineer, this may be second nature. Go through the house, determine what materials are required, price them at a typical home depot and or lowes etc. research online what you may need to do anything. Tedious and time consuming no doubt. how many pieces of x, what size, type,]other materials that need to accompany those materials, quantity discounts? all factors to account for....perhaps consider hiring someone experienced to hold your hand. Money for information in not unheard of. Be relentless. Make an offer to someone that's already done what you're trying to do for their time. good luck.

Hi @Kodie Altvater and others,

I'm wondering how your project is going.  I'm now in the place you were 11 months ago.  I am trying to figure out costs for my first house.

I'm a Mechanical Engineer, but I specialize in design, so the bones of the house are very important to me.  I'd like to specialize in upscale flips.  I'm a trash to treasure junkie & hope to get that upscale/urban chic look on the cheap.

That said, I've got my eye on a row house in an up & coming neighborhood.  It's about 2700 sq ft plus basement.  All it's got is a new roof & four walls.  Well, it has the rest but everything has to go, including structural, so there are demo & structural engineer costs to consider.

The sale comps for houses in the area are around $250,000.  There are a few rehabbers in the area advertising $320k, but nothing has sold at that price point.  I believe this area is up & coming.

Although I'd like to make money, profit is not my driving factor & I may keep the house.  The house is up for auction, so I'm trying to figure how much I should pay, given everything else.

So....with all the work that's required, am I already upside-down before even starting?

Thanks for your advice!  Anyone interested in walking through & giving me an estimate?

Ruth 

Hey Kodie,

This may have already been said in the comments, but I just want to remind everyone that if you're looking for a contractor it's important to find someone that's fully-licensed or has a good reputation. When it comes to rooms in the house like a bathroom or basement, where they typically collect more water, it becomes even more important to make sure that the job is done properly. If the structure looks bad perhaps you should get a specialist in there before making a decision.

Remember that spending additional time prior to making decisions can go a long way! Whether you decide to purchase the property or not, taking the extra time will save you from having lots of headaches! :) 

Hopefully this helps! 

-Jordan