Rehab Cost Estimate

Rehabbing & House Flipping
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Rehab Cost Estimate

Nick Wehrley
Rental Property Investor · Member since 2021 · 40 posts · 9 votes

Hello Everyone,

The purpose of this post is to determine or get a rough estimate of rehab costs and some suggestions on what I should do regarding a couple circumstances with a potential house flip.

To start, the asking is $50k with an estimate ARV of 80k-100k (I know that's a big gap, waiting for complete ARV). The house is 3b2ba 1,500 sqft.

The flooring is good and would just need touched up, some water damage below one window, would need painted all the way through, and a couple pieces of siding are missing from the outside. The detached garage is sturdy but would need a new door and garage door.

The curveball for me about this property is they have completely closed off a small portion of the home. Put up a new wall, within that wall is new plumbing to a bathroom. No entry in the blocked off area but has 2 windows where you can see right into it from the outside. It’s meant to be the master bedroom I believe.

My questions: 1. What solutions are there regarding that blocked off area of the house? 2. The living room ceiling has a small crack across the entire room, patch or does it need replaced? 3. For the garage, could I remove the garage door and entry door and leave it more as a carport? 4. With all given information what are your thoughts on where I might end up with rehab costs?

If you have any other statements outside of my questions feel free to include

Thanks!

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Evan Polaski
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
5y

@Nick Wehrley, clearly I don't know the property or area. The last time I got through a renovation for under $15k was in 2011, and the renovation was to bring a property to section 8 rental standards, but even that was just under $15k.

For a flip that is selling to a retail buyer, I have never been under $40k in the last 5 years.  For reference, I had to replace a sewer line to the street on a city lot (about 30ft run from basement to street) and that was about $10k alone.  From my perspective, I would not take on this property.  A) I know I could not complete a rehab for 10-15k, and b) I want a 30K + profit potential, net of all selling costs, after I account for a well padded rehab budget and purchase price.

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  • Michael Plante
    Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
    5y

    Am I understanding  it correctly it is a potential of 30k profit before expenses?

    80k-50k ?

    Of that is correct, for me I would never feel comfortable with such a low amount.  

    One thing goes wrong and I could lose money 

    1Reply
  • Nick Wehrley
    OP
    Rental Property Investor · Member since 2021 · 40 posts · 9 votes
    5y

    @Michael Plante

    So we have a complete ARV now and is coming to be 100k on the very low end

    2Reply
  • Nick Wehrley
    OP
    Rental Property Investor · Member since 2021 · 40 posts · 9 votes
    5y

    @Michael Plante

    We are not wanting to spend more than 10-15k in rehab costs. Just trying to get a second opinion whether that’s doable or not given the above info

    0Reply
  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    5y

    @Nick Wehrley, clearly I don't know the property or area. The last time I got through a renovation for under $15k was in 2011, and the renovation was to bring a property to section 8 rental standards, but even that was just under $15k.

    For a flip that is selling to a retail buyer, I have never been under $40k in the last 5 years.  For reference, I had to replace a sewer line to the street on a city lot (about 30ft run from basement to street) and that was about $10k alone.  From my perspective, I would not take on this property.  A) I know I could not complete a rehab for 10-15k, and b) I want a 30K + profit potential, net of all selling costs, after I account for a well padded rehab budget and purchase price.

    2Reply
  • Nick Wehrley
    OP
    Rental Property Investor · Member since 2021 · 40 posts · 9 votes
    5y

    @Evan Polaski

    Thanks for the response. I’ll definitely take another look at numbers and list of things that need rehabbed. For a little more perspective, the electrical and plumbing is good so we are dealing with majority cosmetic work with just a tad bit of drywall being that most difficult of cosmetics and I do the work myself. My biggest concern is that cornered off room

    Thanks!

    0Reply
  • Tim DelaneyPro Member
    Buffalo, NY · Member since 2018 · 790 posts · 530 votes
    5y

    @Nick Wehrley you say the plumbing is good, but if you are planning to open up that wall that blocks off a room then it sounds like you are going to have to reroute the plumbing in that wall, so that will immediately add a decent amount to your rehab. The margin seems right for a flip, but it may work for a BRRRR as long as you are prepared for unexpected expenses.

    Podcast Guest on Show How to Buy Yourself a 6-Figure Income Stream
    1Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    5y
    Originally posted by @Nick Wehrley:

    @Michael Plante

    We are not wanting to spend more than 10-15k in rehab costs. Just trying to get a second opinion whether that’s doable or not given the above info

     Prices on building materials has gone up , lumber has more than doubled . Labor is up since demand is up and due to the pandemic . 10-15k isnt much money and wont get you very far unless you are doing all the work and thats just covering materials . 

    1Reply
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