Ballpark cost for full gut rehab
Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes
Hi everyone
I think I have pretty much figured out how to estimate the costs of a light to moderate rehab. What I don't know right now is how to estimate a full gut rehab. I am not looking for an exact number, only a ballpark figure. I will definitely go there with a contractor and get a proper estimate when the time is right, but right now a rough number will do.
I am looking at a two story house in Vallejo, CA that will need to be fully gutted. I would say the outside walls are OK as are the sidings and the roof. The inside will need to be completely redone, including a complete layout change. No wall would stay at the same spot. The house has two floors, is about 1,200 square feet and stands on a concrete slab which partially had to be jacked up for the new plumbing. At the end it would have 3 bedrooms and 2 bathrooms which is one bathroom more than it has now. Cheap to medium material quality.
Anyone willing to throw in a guestimate? Are we talking close to $80k? $100k? $120K? Any input is appreciated
Simon
@Will Barnard Lipstick deals? You mean like discounts on lipstick? :) now how would you know about this? You probably meant cosmetic rehabs.
How embarrassing, I thought I was on Biggerlips.com and now everybody here knows I wear lipstick. Oops. Now that the cat is out of the bag, I also wish that the "cosmetic rehabs" were easy to come by too.
@Simon Stahl I hope you haven't bought it yet. Of all the ways to get involved in a Real Estate, a project like you are talking about is by far the worst. Well, actually the meth house that caught fire was worse but I didn't buy that one. I've done two like you describe. Cost waaaay more than it should have, and took waaaay longer than it should have and buyers never appreciate the trouble. If you like misery, just buy yourself a rock quarry and a sledge hammer. It's cheaper and more therapeutic.
@Simon Stahl that's to vague of information. Do you have a video walk through of the property?
$146,678.97. Of course i might be off a few dollars. If i could actually see the house and s spec sheet and get bids from subs i might get a few dollars closer
Thanks for the info so far. It sounds like it would definitely be above $100k. I think $120k would be the max it could cost for the numbers to still make sense, otherwise it would get too tight.
@Account Closed interesting, I actually thought it would be the other way around. I thought full gut rehabs are much easier to plan since there are way less surprises along the way because you anyways replace anything. I know it would be a lot to take on as a first rehab project, but hey, at least I would learn everything with this one, right? ;-)
Full gut including new electrical, new plumbing, new HVAC, new interior framing and drywall, new windows, etc would be around $80k for me on 1200 sq ft (this assumes no new roof, no major foundation costs (other than filling in cut slab for plumbing), and no major landscape or fencing. That said, it would probably cost you and most others who have to hire a contractor $100k. This of course is guessing without the privalage of seeing the jobsite and does not account for construction difficulties like hillsides, stairs to property, limited parking/street access, etc.
I disagree, while we all would love to do the lipstick deals and turn fat profits, that is just not commonly available for this competitive market we preside in today. Heavier rehabs are almost always required (at least in my area) and when you do full gut rehabs, you can count on knowing in advance all the items that will need to be done, not much can be hidden on a full gut. Now, that said, you will likely need permits and such causing some potential added unknown costs that the city will toss your way.
@Account Closed Well let's see, I am assuming you'd want to sell after rehabbing. That being said it is the Most Highly Taxed transaction. It ties you up for months. The real estate agent gets 5% to 6% - so, maybe $25,000 to $30,000 and you don't know for sure what your costs are or what the thing will sell for.
If it's your first rehab, it will certainly cost more than you plan, your electrical guy won't show, your plumber will have you way down on his list so the project will just sit for a while, your sheet rocker will have to wait until the rains stop because the mud won't dry, your inspection will fail and you'll have to redo that, your refrigerator space in the kitchen will be two inches short because the counter is bigger than you thought, then the door of the refrigerator will swing the wrong way and you will have to figure that one out too.
Then there won't be sod available for the lawns when you need it, the gardeners will disappear because someone yells "ice" and it's just someone that is hot and wants some ice but the gardeners think they mean something else. Then you will find that you used 12" tiles in the kitchen and everybody wants 18" and that the AC Unit didn't arrive when promised. And that's just the start.
In that same amount of time I can buy 2 houses a month using Subject To and Lease Option and get $25,000 down per house selling to Tenant Buyers getting a cash flow of $500 per house without having to rehab. I sell them as "minor fixers" to business owners who don't qualify for traditional banking. So, 4 months later, in about the time it will take you to do that project, I have bought and sold 8 houses with $25,000 ea down for $200,00 in my pocket plus $2,000 per month added cash flow for as long as they take to get their credit together to refinance. It is usually for 2 years to 3 years. Do the math. These are actual and factual. To top it off, they do all of the rehab themselves. I do this in California, Washington, Arizona and Texas. "Don't walk past the dollars to pick up the dimes simply because the dimes are shinier".
@Simon Stahl I hope you haven't bought it yet. Of all the ways to get involved in a Real Estate, a project like you are talking about is by far the worst. Well, actually the meth house that caught fire was worse but I didn't buy that one. I've done two like you describe. Cost waaaay more than it should have, and took waaaay longer than it should have and buyers never appreciate the trouble. If you like misery, just buy yourself a rock quarry and a sledge hammer. It's cheaper and more therapeutic.
Ken, nice response, having renovated 1000s of homes at this point in my real estate career, a gut rehab has to really have a lot of meat on the bones at the end to make real sense. You made a great point, even with blue prints in my experience, even with crazy due diligence, shooting the worst case scenario (I would say, I am a top tier professional when it comes to estimating a job) - it always cost waaay more than it should have, and took waaay longer than it should. I am faced with unique challenges nearly every single remodel, even the full gut, you would think, that once you get down to the bare bones its easier to go back, sometimes the items you discover are way more unique than you had possibly imagined. Many people even the most experienced, even those like myself who have completed 1000s are faced with challenges, timing, code changes, cost over runs .... its the name of the game... this is partially also my passion and joy for this space, that the challenges never stop :)
Simon, get bids, get good comprehensive bids from GC on your project plans, be precise and detailed, full gut can be sticky... check codes and potential unexpected mandatory code upgrades once you open all the walls.
Much Luck ... sorry couldn't shoot you a ball park price.
what is the longest amount of time you have spent in Vallejo?
Again, thanks everyone for the input. There are some good tips in here.
I never thought that it would be a walk in the park. The point would be that I can learn as much as possible without loosing money. The numbers work as long as the rehab does not exceed $120k, but I realize that I cannot know for sure without getting an estimate from a contractor.
@Will Barnard Lipstick deals? You mean like discounts on lipstick? :) now how would you know about this? You probably meant cosmetic rehabs.
How embarrassing, I thought I was on Biggerlips.com and now everybody here knows I wear lipstick. Oops. Now that the cat is out of the bag, I also wish that the "cosmetic rehabs" were easy to come by too.
If it's your first rehab, it will certainly cost more than you plan, your electrical guy won't show, your plumber will have you way down on his list so the project will just sit for a while, your sheet rocker will have to wait until the rains stop because the mud won't dry, your inspection will fail and you'll have to redo that, your refrigerator space in the kitchen will be two inches short because the counter is bigger than you thought, then the door of the refrigerator will swing the wrong way and you will have to figure that one out too.
Then there won't be sod available for the lawns when you need it, the gardeners will disappear because someone yells "ice" and it's just someone that is hot and wants some ice but the gardeners think they mean something else. Then you will find that you used 12" tiles in the kitchen and everybody wants 18" and that the AC Unit didn't arrive when promised. And that's just the start.
In that same amount of time I can buy 2 houses a month using Subject To and Lease Option and get $25,000 down per house selling to Tenant Buyers getting a cash flow of $500 per house without having to rehab. I sell them as "minor fixers" to business owners who don't qualify for traditional banking. So, 4 months later, in about the time it will take you to do that project, I have bought and sold 8 houses with $25,000 ea down for $200,00 in my pocket plus $2,000 per month added cash flow for as long as they take to get their credit together to refinance. It is usually for 2 years to 3 years. Do the math. These are actual and factual. To top it off, they do all of the rehab themselves. I do this in California, Washington, Arizona and Texas. "Don't walk past the dollars to pick up the dimes simply because the dimes are shinier".
Sounds like you have had very poor quality crews working for you, poor planning, lack of ability to properly measure things, and a lack of ability to nail down costs and exit values and hire illegal aliens. If any rehabber has all of these problems (or just some of them), perhaps they should not be in that business.
As for me, I don't have these problems, it rarely rains here in SO Cal, I list myself in many cases (and when I don't I have enough spread to cover these costs - part of the operation), and I pretty much nail the exit price and rehab - not everytime, but for the most part. As for the highest tax exposure, flip income is certainly tax at the highest rates so I agree on that one. Congrats on your business model, sounds like fun.
Full gut including new electrical, new plumbing, new HVAC, new interior framing and drywall, new windows, etc would be around $80k for me on 1200 sq ft (this assumes no new roof, no major foundation costs (other than filling in cut slab for plumbing), and no major landscape or fencing. That said, it would probably cost you and most others who have to hire a contractor $100k. This of course is guessing without the privalage of seeing the jobsite and does not account for construction difficulties like hillsides, stairs to property, limited parking/street access, etc.
Well, I'm gonna bump this up to see if I could get some more information, this is the closest answer I've seen to my question so far.
If you bumped this up to 1800 sqft (make it a 4/2 basically) what's your personal guesstimate?
What kind of flooring(s) were you thinking for the kit/bath/br/lr when you estimate 80k/1200sqft? Is that tub in the master or a tile shower? What countertops in kitchen? How much does HVAC run out there per drop, how many tons AC you thinking for 1200sqft?
I'm not using this for an estimate, more of a goal...
Take this with a grain of salt, but ours typically work out like this...in Texas mind you:
$10-15/sf for cosmetic rehabs
$20-30/sf for rehabs with some structural or MEP work
$50-75/sf for full gut rehabs
Take this with a grain of salt, but ours typically work out like this...in Texas mind you:
$10-15/sf for cosmetic rehabs
$20-30/sf for rehabs with some structural or MEP work
$50-75/sf for full gut rehabs
Well, he said $65 for full gut rehabs, $85 if you don't know the right people, so you guys are consistent.
For $50-$75/sf, what finishes are we talking about? Floors, counters, windows, doors, etc? Strictly builders grade/laminate?
This is published information:
http://www.building-cost.net/
Full gut including new electrical, new plumbing, new HVAC, new interior framing and drywall, new windows, etc would be around $80k for me on 1200 sq ft (this assumes no new roof, no major foundation costs (other than filling in cut slab for plumbing), and no major landscape or fencing. That said, it would probably cost you and most others who have to hire a contractor $100k. This of course is guessing without the privalage of seeing the jobsite and does not account for construction difficulties like hillsides, stairs to property, limited parking/street access, etc.
Well, I'm gonna bump this up to see if I could get some more information, this is the closest answer I've seen to my question so far.
If you bumped this up to 1800 sqft (make it a 4/2 basically) what's your personal guesstimate?
What kind of flooring(s) were you thinking for the kit/bath/br/lr when you estimate 80k/1200sqft? Is that tub in the master or a tile shower? What countertops in kitchen? How much does HVAC run out there per drop, how many tons AC you thinking for 1200sqft?
I'm not using this for an estimate, more of a goal...
$80k for 1200 SF comes to about $67 per SF so multiply now by 1800 SF and you get $120k. Again, those costs are what I would spend and you may be looking at $145k.
My finishes for that would be quartz counter tops, new kitchen cabinets, new GE or better appliances, wood floors (not to exceed $5 per SF in material costs) in most of home (possibly do carpet in kids bedrooms to save), tile shower for master bath, tile floors in all baths, tub shower with tile on walls in guest/hall bath, sand texture stucco, average 30 year shingles for roof, etc. HVAC for a 5 ton system with all new ducting, etc would run me about $7k-$8k labor & materials.
Hope that helps.
Full gut including new electrical, new plumbing, new HVAC, new interior framing and drywall, new windows, etc would be around $80k for me on 1200 sq ft (this assumes no new roof, no major foundation costs (other than filling in cut slab for plumbing), and no major landscape or fencing. That said, it would probably cost you and most others who have to hire a contractor $100k. This of course is guessing without the privalage of seeing the jobsite and does not account for construction difficulties like hillsides, stairs to property, limited parking/street access, etc.
Well, I'm gonna bump this up to see if I could get some more information, this is the closest answer I've seen to my question so far.
If you bumped this up to 1800 sqft (make it a 4/2 basically) what's your personal guesstimate?
What kind of flooring(s) were you thinking for the kit/bath/br/lr when you estimate 80k/1200sqft? Is that tub in the master or a tile shower? What countertops in kitchen? How much does HVAC run out there per drop, how many tons AC you thinking for 1200sqft?
I'm not using this for an estimate, more of a goal...
$80k for 1200 SF comes to about $67 per SF so multiply now by 1800 SF and you get $120k. Again, those costs are what I would spend and you may be looking at $145k.
My finishes for that would be quartz counter tops, new kitchen cabinets, new GE or better appliances, wood floors (not to exceed $5 per SF in material costs) in most of home (possibly do carpet in kids bedrooms to save), tile shower for master bath, tile floors in all baths, tub shower with tile on walls in guest/hall bath, sand texture stucco, average 30 year shingles for roof, etc. HVAC for a 5 ton system with all new ducting, etc would run me about $7k-$8k labor & materials.
Hope that helps.
That does help, thanks.
When you say sand texture stucco, is your estimate for just avg repairs or are you talking all new exterior stucco too?
5 ton? Where are you located, the equator? 1800sqft is 3 ton in miami! Or is that for a heat pump?
How much are qtz counters total installed for you per sqft?
LOL, not quite the equator but it gets hotter than hell here, was up to 118F in summer 2016 and reached 114F last summer. I was just pointing out what my 5 ton units cost me installed.
As for quartz, I get 1/2 slabs from $300 to $550 depending on color and about $400 or so for fabrication/install. These 1/2 slabs will do a 2 ft wide counter top by 10ft long (20 SF).
As far as stucco, I was assuming that approx 1/2 the house would need new (I typically don’t do patches around windows as I do heavier rehabs so I do full walls or the entire house.
LOL, not quite the equator but it gets hotter than hell here, was up to 118F in summer 2016 and reached 114F last summer. I was just pointing out what my 5 ton units cost me installed.
As for quartz, I get 1/2 slabs from $300 to $550 depending on color and about $400 or so for fabrication/install. These 1/2 slabs will do a 2 ft wide counter top by 10ft long (20 SF).
As far as stucco, I was assuming that approx 1/2 the house would need new (I typically don’t do patches around windows as I do heavier rehabs so I do full walls or the entire house.
So for example, take a 2100 sqft house that is a full gut, has a 10x10 hole where the roof used to be for example, so you could imagine the damage inside. What kind ARV do you need if the house costs 250k for it to work for you? Or alternatively, if the ARV is ~400k, what's the most you'd pay for it assuming you have to full gut it?
LOL, not quite the equator but it gets hotter than hell here, was up to 118F in summer 2016 and reached 114F last summer. I was just pointing out what my 5 ton units cost me installed.
As for quartz, I get 1/2 slabs from $300 to $550 depending on color and about $400 or so for fabrication/install. These 1/2 slabs will do a 2 ft wide counter top by 10ft long (20 SF).
As far as stucco, I was assuming that approx 1/2 the house would need new (I typically don’t do patches around windows as I do heavier rehabs so I do full walls or the entire house.
So for example, take a 2100 sqft house that is a full gut, has a 10x10 hole where the roof used to be for example, so you could imagine the damage inside. What kind ARV do you need if the house costs 250k for it to work for you? Or alternatively, if the ARV is ~400k, what's the most you'd pay for it assuming you have to full gut it?
I have not dealt in that lower price range in quite a number of years so the formulas are not the same. That said, generally speaking, if I had an ARV of $400k, and a full gut 2100 SF home, I would expect to have around $150k of rehab and thus, my maximum offer would be about $150k (75%). Again, that is generally speaking and I would need to assess the market conditions, the specific neighborhood, the average DOM, the level of dificulty in that $150k rehab, the total time from COE (close of escrow) to COE, etc.
I agree approx $180-100k based on 1200 sf. That is an extremely rough number and getting multiple quotes from contractors is a must. Then add a percentage contingency for unforeseen circumstances. I have found it is helpful to bid demo and new construction separately. That way the contractor cannot nickle and dime you for unforeseen change orders once the walls are open. Expose all the problem areas then finalize the bid.