Estimate rehab cost per sq ft.

Rehabbing & House Flipping
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Estimate rehab cost per sq ft.

Sion Nickson
Central, NJ · Member since 2016 · 21 posts · 4 votes
Hello BiggerPockets Community, I was wondering what were wholesalers and flippers in the New Jersey area using to estimate rehab cost per square feet. -Sion Nickson
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J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
9y

There is no way to give you an answer to your question that's going to satisfy you. Your numbers could range from $10-150 per square foot, depending on:

- Specific Scope of Work (SOW)

- Your experience

- Specific architectural design decisions

- Level of finishes

- How the project is managed (you or a GC)

- Time of year

- Type of contractors used

- Your negotiating skill

And lots of other factors.  The only way to get a real rehab estimate is to create a scope of work and then assign prices, either through experience or bidding it out.

BP has a good book on estimating rehab costs (I'm the author):
http://www.biggerpockets.com/flippingbook

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  • Scott Upshaw
    Bridgewater, NJ · Member since 2015 · 100 posts · 31 votes
    9y

    As a contractor. I can tell you there is no magic formula for that. You just need to know your numbers and build a relationship with a contractor who knows his stuff..break each category down and have a round about number for each. For instance.

    Hardwood flooring. $1.80 sqft installed labor only

    Tile flooring. $4.00 a sq labor only

    Paint..150 a room..labor only 

    And so on and so on

    Hope this helps

    6Reply
  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    9y

    There is no way to give you an answer to your question that's going to satisfy you. Your numbers could range from $10-150 per square foot, depending on:

    - Specific Scope of Work (SOW)

    - Your experience

    - Specific architectural design decisions

    - Level of finishes

    - How the project is managed (you or a GC)

    - Time of year

    - Type of contractors used

    - Your negotiating skill

    And lots of other factors.  The only way to get a real rehab estimate is to create a scope of work and then assign prices, either through experience or bidding it out.

    BP has a good book on estimating rehab costs (I'm the author):
    http://www.biggerpockets.com/flippingbook

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    15Reply
  • Bob Okenwa
    Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
    9y

    To piggyback on what @J Scott has said, there are too many variables to give a blanket number, but knowing your own numbers inside and out really goes a long way. As for his book on estimating rehab costs, it's a great read and I strongly suggest it. I've read it twice and it's very informative.

    4Reply
  • Ritch Bonisa
    Specialist · Indianapolis, IN · Member since 2016 · 841 posts · 480 votes
    9y

    I'm in project management and work a lot with remote investors and scopes can many times determine whether they will move forward or throw the deal out. It is a big part of their equation. Building codes can be a big factor especially with older homes. I sometimes see 3 or 4 estimates come in from GC's that are way above the scope. Usually the GC's are closer to being right in these instances. I think good honest GC's are a necessity when it comes to scopes (of course I'm talking about bigger type projects, not just paint and small drywall repairs.) I see a lot of projects in places like Indianapolis, Cincinnati, & Charlotte and there can be variations in costs, especially on the material side. There is no easy answer, but I do agree that accurate scopes are crucial in determining whether or not a deal can hit intended ROI.

    2Reply
  • Sion Nickson
    OP
    Central, NJ · Member since 2016 · 21 posts · 4 votes
    9y

    @J Scott

    Thanks for referencing your book I will make sure to check it out. So for instance, lets say I am trying to put a property under contract to assign it over to an "investor". The day of my appointment to come and view the property I would like to make an offer to the "seller" the same day. To come to an acceptable offer price I must know a quick estimate of what the "investor" will be paying for rehab when I assign it over to make sure I am offering a good deal to the "investor" as well. While touring the house I was wondering if there was a quick formula depending on the condition of the property that I can use to get a estimate of what my "investor" will be paying to rehab so I can take that into consideration while making my offer to the "Seller"

    0Reply
  • Jason Timmerman
    Howell, NJ · Member since 2016 · 87 posts · 56 votes
    9y

    Sion,

    It depends on the scope like everyone has said.  If the home is in need of updating and your end buyer wants to make it a real nice flip, and everything else is sound (foundation/roof/structure/etc.), look to around $40/sq ft.  That would include flooring, full kitchen reno, full bathroom reno, siding and paint.  If you want to just clean it up a bit, more like $20/sq ft.  If the property is a tear down you're going to be way over those numbers.  If it needs some foundation work or a roof, add $5/sq ft at least.  Usually, a good cash buyer is going to have a good relationship with GC's so you should be ok.

    6Reply
  • Cale Ferguson
    Investor · Lexington, SC · Member since 2014 · 103 posts · 28 votes
    9y

    Truthfully, I think these are high numbers. A $50/ft rehab would be quite extensive and way beyond anything I would even want to tackle. Only way you run into this is if the place is destroyed and uninhabitable when you go in or if you are dealing with a complete renovation in a fancy, high income area.  My rehabs usually fall in the 10-25 per foot range.  You really need a SOW sheet with some baseline prices for carpet, tile, roof, doors, faucets, water heater, etc etc etc. This will bring you much closer to the mark than $/ft guesses. 

    6Reply
  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    9y
    Originally posted by @Cale Ferguson:

    Truthfully, I think these are high numbers. A $50/ft rehab would be quite extensive and way beyond anything I would even want to tackle. 

    I do gut rehabs all the time for more than $50/sf in some parts of the country, and this is with mid-level finishes.  A basic cosmetic rehab in a high-end area can approach $50/sf.  And a gut rehab in a high-end area can easily top $150/sf.

    There is no one-size-fits-all answer to the question of, "How much will it cost..."

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  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    9y
    Originally posted by @Sion Nickson:
    While touring the house I was wondering if there was a quick formula depending on the condition of the property that I can use to get a estimate of what my "investor" will be paying to rehab so I can take that into consideration while making my offer to the "Seller"

    There's no quick formula I can give you...

    Now, if you've renovated a dozen similar houses in that same area using the same contractors and the same materials, you should be able to estimate the rehab on a per-square-foot basis using the numbers from your previous rehabs.  But, if you haven't done it before, there are no formulas you can use to create an estimate out of thin air.

    Estimating a rehab isn't easy.  If it were, 100% of wholesalers would be successful.  Instead, about 1% of wholesalers are successful, because those are the 1% who are willing to put in the time, effort and study to learn how to do it.

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  • Jon Graham
    Property Manager · St. John, IN · Member since 2017 · 67 posts · 30 votes
    9y

    I tend to agree with those who have commented it's pretty hard to do a rehab budget like that. I have seen some big wholesalers in the area that so some version of this, but the properties they are doing this on tend to be in REALLY poor low income areas. The houses all tend to be about the same and the rehabs are basically put another coat of paint over the 50 existing and patch the holes in the cabinets. 

    There are some rehab budget excell spreadsheets I've seen online where it basically has setup every possible aspect of a rehab. You just enter quantities. You can tweak the material and labor 'costs' over time to get a more accurate budget. For instance it asks for l/f of cabinets and you can have a preset cost per l/f and install per l/f. With a little setup and research you can have a powerful tool to do quick and professional rough estimates. 

    3Reply
  • Cale Ferguson
    Investor · Lexington, SC · Member since 2014 · 103 posts · 28 votes
    9y

    I agree that no "one size fits all" approach exists that is worth anything.  I don't do "high end" and "tear down" houses, at least not yet. I would be willing to bet the wholesaler who asked the question isn't planning to either. I agree that so few wholesalers are successful and part of the problem is very little construction knowledge.  I believe she was looking for a starting place, I would highly suggest a master rehab spreadsheet that has baseline pricing worked into it. This can then be easily modified to fit most houses you walk into and give you a SOW and rehab estimates.  You could then use it with a tablet or print of worksheets to fill out as you walk a property depending on what fits your style. I think the important thing is that you know what it actually means, and that will take time, study, and practice. 

    2Reply
  • Sion Nickson
    OP
    Central, NJ · Member since 2016 · 21 posts · 4 votes
    9y
    Thanks Guys ! I was looking for a "one size fits all" but now seeing that is not possible. I will definitely have to study more in this particular area and soak up more information. Any other resources regarding rehab estimates feel free to send my way.
    1Reply
  • Caleb Rigby
    Investor · Layton, UT · Member since 2016 · 162 posts · 237 votes
    9y

    @Sion Nickson, I would suggest going to a few big stores there (Home Depot/Lowes) and looking what your material costs are in that area. You can look at granite, cabinets, tile, laminate, paint, doors, baseboards, vanities, windows, shingles, etc. If your head is wrapped around that much, then you have a good start on what materials will cost you. Then you'd need an estimate for labor, so reach out to a handful of GCs in your area to give you some quotes for strictly labor on the same things. If you're like me, you'll suck at projecting costs at first, but it gets easier once you become more experienced. Don't let this stop you from getting a house under contract. 

    3Reply
  • Brook CopelandPro Member
    Real Estate Investor · Toms River, NJ · Member since 2012 · 13 posts · 17 votes
    9y

    Sion 

    From 1 Nj investor to another ... I get where you are coming from  I feel the same way you felt  Let me tell you what I found out..... When I look at a property and I need to do a 5-minute analysis to see if I am even going to bring it to level 2 evaluation  - here is what I use - I break it down into 4 levels ... Light rehab $ 10/sf  Med rehab $25/sf  Major rehab $35/sf   Gut rehab   $ 60/sf . This will put you in the market in central NJ ( I am located at the shore area) **** THESE are ball park #s for Level 1 evaluation - NOTHING ELSE .... This is your average C+ / B- vanilla neighborhood . Nothing extravagnt ... No historical .... no crazy situations. If you wanna talk further PM me . Hope that helped you 

    Brook

    12Reply
  • Steve Wilcox
    Investor · Cranford, NJ · Member since 2012 · 303 posts · 153 votes
    9y

    I am a rehabber, landlord, and GC who does lots of work for other investors. We typically see things come in around

    -basic level rehabs (kitchens, bathrooms, flooring, paint, some minor wall patching) around $30 per sq-ft

    -mid level (same as above but with possible roof, siding, major system upgrades, ect) at $50 per sq-ft

    -full rehab including above but with framing, foundation, new insulation, new drywall, doors, trim, ect around $75 per sq-ft

    - rebuild, additions, add a level, ect $125 per foot

    There is no one size fits all and no two rehabs ever go exactly the same, there are always unforeseen things you find once you start working, but that should give you a ballpark. 

    5Reply
  • Aaron Smith
    Investor · Washington, DC · Member since 2016 · 175 posts · 73 votes
    8y
    Originally posted by @J Scott:
    Originally posted by @Cale Ferguson:

    Truthfully, I think these are high numbers. A $50/ft rehab would be quite extensive and way beyond anything I would even want to tackle. 

    I do gut rehabs all the time for more than $50/sf in some parts of the country, and this is with mid-level finishes.  A basic cosmetic rehab in a high-end area can approach $50/sf.  And a gut rehab in a high-end area can easily top $150/sf.

    There is no one-size-fits-all answer to the question of, "How much will it cost..."

    Thanks for the response J Scott. In the Washington DC area, gut rehabs do cost around $150/SF if hiring out to a GC, although can be done for $100/SF. I read your book about estimating the costs; however most of it didn't apply since the cost of the areas are so different.

    However, there are cheaper areas very close, like Baltimore, just 45 min to an hour. Seems like workers could commute in while living in the cheaper area. I think when contractors see that the property is in DC they will bid higher automatically.

    No specific question in there, just adding to the commentary.

    0Reply
  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    8y
    Originally posted by @Aaron Smith:
    Originally posted by @J Scott:
    Originally posted by @Cale Ferguson:

    Truthfully, I think these are high numbers. A $50/ft rehab would be quite extensive and way beyond anything I would even want to tackle. 

    I do gut rehabs all the time for more than $50/sf in some parts of the country, and this is with mid-level finishes.  A basic cosmetic rehab in a high-end area can approach $50/sf.  And a gut rehab in a high-end area can easily top $150/sf.

    There is no one-size-fits-all answer to the question of, "How much will it cost..."

    Thanks for the response J Scott. In the Washington DC area, gut rehabs do cost around $150/SF if hiring out to a GC, although can be done for $100/SF. I read your book about estimating the costs; however most of it didn't apply since the cost of the areas are so different.

    However, there are cheaper areas very close, like Baltimore, just 45 min to an hour. Seems like workers could commute in while living in the cheaper area. I think when contractors see that the property is in DC they will bid higher automatically.

    No specific question in there, just adding to the commentary.

    Yup, DC is one of the higher-end markets that is outside the scope of the ranges I provide in my book.  For reference, I live in Ellicott City (Howard County) which is about 25 minutes north of DC and am pretty familiar with both the DC and Baltimore markets.  They are EXTREMELY different!

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y
    Originally posted by @J Scott:
    Originally posted by @Aaron Smith:
    Originally posted by @J Scott:
    Originally posted by @Cale Ferguson:

    Truthfully, I think these are high numbers. A $50/ft rehab would be quite extensive and way beyond anything I would even want to tackle. 

    I do gut rehabs all the time for more than $50/sf in some parts of the country, and this is with mid-level finishes.  A basic cosmetic rehab in a high-end area can approach $50/sf.  And a gut rehab in a high-end area can easily top $150/sf.

    There is no one-size-fits-all answer to the question of, "How much will it cost..."

    Thanks for the response J Scott. In the Washington DC area, gut rehabs do cost around $150/SF if hiring out to a GC, although can be done for $100/SF. I read your book about estimating the costs; however most of it didn't apply since the cost of the areas are so different.

    However, there are cheaper areas very close, like Baltimore, just 45 min to an hour. Seems like workers could commute in while living in the cheaper area. I think when contractors see that the property is in DC they will bid higher automatically.

    No specific question in there, just adding to the commentary.

    Yup, DC is one of the higher-end markets that is outside the scope of the ranges I provide in my book.  For reference, I live in Ellicott City (Howard County) which is about 25 minutes north of DC and am pretty familiar with both the DC and Baltimore markets.  They are EXTREMELY different!

     Aaron you are right that a bid for a job will have an increased bid just by being in DC.  You could have the same roofer bid on a roof in Hyattsville and in say Riggs Park in DC, 10 mins away and have the same job, same roofer and pay $1,000 more on the DC property. Head west of Rock Creek Park and your bid will get even higher. 

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  • Kyle Jiron
    Contractor · Washington, DC · Member since 2018 · 55 posts · 43 votes
    8y

    @Aaron Smith @J Scott @Russell Brazil What are your opinions on the cost differential between DC & MD renovation pricing? Do you think the cost is higher in DC because of the logistics (higher traffic and difficulty getting to job sites, more code restrictions, sites tend to be smaller and more difficult to stage material in, etc.) or is there something else, maybe completely intangible, driving the costs? Or is it maybe there are just fewer GC's registered in the DC area than MD or VA, so the lesser competition allows for higher pricing?

    1Reply
  • Colleen Sikosek
    Hornell, NY · Member since 2018 · 11 posts · 3 votes
    7y

    I’m in western NY and there are a lot of houses built in 1900 or late 1800’s. Some have had some level of rehab in 60’s or 70’s. I’m thinking any additional rehab/restoration would still be at $60/sqft? Oh, and some historical as well. Any contractors familiar with this level of rehab Please Reply 

    0Reply
  • Kuba F.Pro Member
    Real Estate Investor · Los Angeles, CA · Member since 2013 · 2k+ posts · 694 votes
    7y

    In Los Angeles I can't get anything done for less than $100/sqft unless I'm doing it myself, so that's where I start the back of napkin analysis.  Doing the work myself I've been able to squeeze out $20/sqft.   If all you're doing is paint and floors then you might be able to get away with $10/sqft but I haven't seen one of those deals in years.

    If you're trying to wholesale deals and want a $/sqft number then the best source for that would be the people paying for it, not other wholesalers. Talk to active flippers in your neighborhood and ask them what they ended up paying for rehab on their last few deals.

    This back of napkin stuff will still have huge margins of error though, so ultimately you will need to make the lowest offers you can negotiate and back those offers up with some sort of rationalization for them to ever be accepted.

    1Reply
  • Frank Ding
    Rental Property Investor · Chicago, IL · Member since 2016 · 4 posts · 0 votes
    7y

    i will have to mark this post, very informative.

    0Reply
  • Long Wong
    Investor · Member since 2020 · 19 posts · 4 votes
    5y

    @Steve Wilcox

    Revisiting your estimate from 4 years ago!  :)

    Can you give us an estimate of what this looks like today for basic, mid and full rehabs?

    0Reply
  • Jae Munoz
    Member since 2022 · 1 post · 0 votes
    4y

    Hi guys I’m looking into a property that’s 1,044 square foot & the property definitely needs updating how do I go about that to estimate repair cost (property is in texas)

    0Reply
  • Kenisha ForbesPro Member
    Professional · Ellenwood, GA · Member since 2016 · 64 posts · 18 votes
    3y
    Quote from @Steve Wilcox:

    I am a rehabber, landlord, and GC who does lots of work for other investors. We typically see things come in around

    -basic level rehabs (kitchens, bathrooms, flooring, paint, some minor wall patching) around $30 per sq-ft

    -mid level (same as above but with possible roof, siding, major system upgrades, ect) at $50 per sq-ft

    -full rehab including above but with framing, foundation, new insulation, new drywall, doors, trim, ect around $75 per sq-ft

    - rebuild, additions, add a level, ect $125 per foot

    There is no one size fits all and no two rehabs ever go exactly the same, there are always unforeseen things you find once you start working, but that should give you a ballpark. 


     Hey Steve, I'm sure these numbers have changed since this post was 7yrs ago. How inflated are these numbers today?

    0Reply
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