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
@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.
First time investor, having trouble finding properties to hold in so cal that have workable cf in decent areas.
I'm looking at a 540sqft 2/1 reo being sold at auction in southern California. Auction is in 10 days. Exterior is in good condition. I just got photos and a report on the interior. 30% of main room has a squishy floor. No utilities to check electrical or plumbing. Needs new flooring, slab is unknown. Doors and cabinets are good. Still waiting on estimate from contractor.
Based on comments here it sounds like at $80 per sqft I can assume a budget of $43k to safely cover rehab. If I can get the property for ~70k that would put me at ~110k which would cf for a hold. ARV is ~155k based on comps. So if things went really sideways I could spend up to $60k and get out without ending up upside down. And hopefully come out at less than $80 per sqft and I could dance in the street.
Does this sound crazy? I own my home and have been through a bathroom remodel, but am not experienced with this kind of scale. I know I'm going to overpay for rehab due to lack on experience but I'm worried I might be really underestimating the potential costs. No way to really know the scale before we open the walls/floor up. Thanks for any advice.
First time investor, having trouble finding properties to hold in so cal that have workable cf in decent areas.
I'm looking at a 540sqft 2/1 reo being sold at auction in southern California. Auction is in 10 days. Exterior is in good condition. I just got photos and a report on the interior. 30% of main room has a squishy floor. No utilities to check electrical or plumbing. Needs new flooring, slab is unknown. Doors and cabinets are good. Still waiting on estimate from contractor.
Based on comments here it sounds like at $80 per sqft I can assume a budget of $43k to safely cover rehab. If I can get the property for ~70k that would put me at ~110k which would cf for a hold. ARV is ~155k based on comps. So if things went really sideways I could spend up to $60k and get out without ending up upside down. And hopefully come out at less than $80 per sqft and I could dance in the street.
Does this sound crazy? I own my home and have been through a bathroom remodel, but am not experienced with this kind of scale. I know I'm going to overpay for rehab due to lack on experience but I'm worried I might be really underestimating the potential costs. No way to really know the scale before we open the walls/floor up. Thanks for any advice.
Sorry, missed this post. You need to keep n mind that when you are talking about a small house like 500 SF, your cost per SF will be higher than with a 1500sf home. Same as buying a six pack vs a 12 pack. The per bottle or can cost is greater when the package is smaller, same with rehab costs on houses. If you had a full gut rehab cost of $80 per SF for a 1500 sf home, I would expect that per SF price to go well over $100 per SF on a 500 SF home.
So to answer your question, and without the benefit of seeing the home, the area, or any other details, I would guess your rehab budget is way too low. Rehab costs for finishes in a rental ready unit as opposed to a resale deal will also differ.