Complete Gut and Rehab Costs?

Question

Ok guys,

Below is a house I am ever so slightly considering working on. This may sound absolutely retarded so feel free to weigh-in however you "experts" deem necessary. Heres the deal, this house is in a nice up-and-coming part of town for a good price. If I went ahead and did this deal, I would actually want to live here myself. I'm thinking perhaps I could get a huge house for a steal. This is a 4,500 sq footer. It is rough, beat up, down right nasty..... basically I want to know, can I do EVERYTHING I would need done on this house for <75k... I am no expert in rehabbing and would need to outsource many aspects.

Here's a list of all the things I can think of from the top of my head:

1 Front Porch Complete rebuild

2 Top Porch

3 Siding around entire house

4 Paint around entire house (exterior) I'll do interior myself

5 Electrical Work

6 The back structure that appears to be "stuck onto" the house I would want knocked down and a garage added in the back.

7 Surely a handful of interior walls knocked down (it appears to me the house may have been set-up as a duplex previously

8 Probably dry-wall work in nearly every room

9 I could actually probably repair the hardwood floors and lay tiles myself

10 I also could do most bathroom renovations myself and kitchen renovations

11 I'm going to make the assumption this house needs roofing, electrical and plumbing work, which I know can have a lot of variance but perhaps someone can provide me with a range?

12 Also going to assume that I may need new windows

Not too sure what else but please do add to the list...

Basically when it comes down to it, I have a budget of 75k after purchasing the house, can all of this get done for under 75 or is it a lost cause? Let me know opinions, also this is in Atlanta, Ga. in case anyone is a contractor or wants to recommend one.

Will Barnard · Answer

Your budget of $75k is not anywhere close to a full gut rehab on a house that size and in that condition. You need everything done here. That said, it still may be a deal but without knowing the purchase price or the exit price, no way to comment on it. Run the numbers, this rehab will be a bare minimum of $150k and quite possibly $200k depending on how bad the foundation issues are and what quality of the finishes are used for this area (I don't know your area market either).

If the numbers work, find the extra money to do the rehab and if not, pass.

Edmund Ricker · Answer

Account Closed,

Let me qualify my post by saying I live in Maine so my area is very different from yours, but I looked at a property in similar shape recently so I have been crunching numbers on a gut job.  If I were you, I would make sure that the after repair value would be worth making such a large investment of both time and capital, and that the amount of monthly income you could expect to receive would support the numbers.

The project you are looking at seems like a huge undertaking from the pics you included.  I am not saying it may not make sense, but I think that your budget of <$75k is too low.

I would get a couple contractors to give you a rough ball park estimate and that should confirm whether or not this is a realistic project for your budget.

If this deal doesn't make sense, don't get discouraged.  Keep looking and you will find something that makes sense for your situation.

I have looked at several properties lately and have not found one that makes sense.  It can be frustrating, but think of all the good experience you are gaining everytime you analyze a potential deal.

Hope this helps.

Ed

Adam Abdel-Hafez · Answer

Account Closed, that's funny I just went to assess that home yesterday as a possible flip. Looks like it used to be some kind of multi family housing, and we condisered keeping it as some kind of condo/townhome and as a single family home. For a single family rehab you are looking at somewhere around $150k, so nowhere near your $75k budget. That house would basically need to be gutted and to gut and rehab a 4500sqft is no small task. It also had a lot of structural problems with uneven floors, reconfiguring etc.

Ben Leybovich · Answer

Wow - I look at those pictures and I see $200,000 rehab.

Eric M. · Answer

2 year old thread

Gary Reese · Answer

Your market is very important. I see all the posts from CA are high. But your still well over a 100k

David MacClintock · Answer

You took the words out of my mouth. I can gut and rehab for 30/ft on homes with no high end finishes.

Will Barnard · Answer

Many people have posted about calculating rehab budgets based on square footage, many of which heard some guru spill such BS and in every case I have advised that pricing a rehab by square footage is ridiculous. That said, a full gut rehab or a spec build are the only two circumstances that a price per sq ft is appropriate. Of course every area is different and every investor has different methods, different abilities, and different team members. Here in my area of CA, I would typically expect a cost of around $70 per sq ft of a full gut rehab with new electrical rewire and panel, new HVAC, new copper plumbing, new windows and doors, new stucco, new floors, new kitchen and baths, paint in and out, new base and case plus interior doors and hardware, landscaping, partial roof replacement, permit fees, and misc items. This of course is me as owner builder and in an expensive area of the country. I know I can do full new construction on duplex units for slightly more in cheaper areas of the country (around $85 sq ft). Compare that with a new sfr spec build here in a higher end area and I am looking at $130-$150 sq ft for my costs.

After reading another response regarding the exit values here around $400k, unless you steal this at $125k and spend a max of $185 on rehab, you don't have a deal here (and based in the time to do the work, you would really need this at an even lower price to be jumping up and down about it.

Complete Gut and Rehab Costs?

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