Crumbling row-house, cost to rehab

Tony Vicente · 2020-09-29T17:49:40-07:00

I looked at a bunch of crumbling row-houses in Baltimore today, and many of them had crumbling and cracked brick, rotted foundation, water damage and squishy floors about to give in, and signs at the door saying the place needs to be rehabbed or boarded within 30 days because of code violation.For a typical row-house that's 12 feet wide and 3 floors in Baltimore city, how would it typically cost1A. Gut demolish the walls and floors and plumbing and electric, but keep the foundation untouched?1B. Put in new wall, floors, plumbing and electric, basic stuff nothing fancy, around the existing foundation?2A. Demolish everything including the foundation but obviously leave the facade and exterior walls?2B. Put together a new foundation, new stairs, new everything rehab, basic stuff nothing fancy?I know there's likely to be lazy answers like "it depends, could be anywhere from $20k up to $200k" but please, I'm looking for serious, experienced opinions on what the appropriate price should be. I'm not looking to do granite countertops, just a standard rehab for a place that's appropriate for a lower income neighborhood, so a luxury rehab is inappropriate.Thanks!

Chris SvendsenPro Member

Front Royal, VA · Member since 2016 · 306 posts · 240 votes

5y

I can't give specifics on that area but I am going to be 80k into a rehab that structurally was good, but needed all new electric, plumbing, roof, windows, moved walls, added 3 bathrooms, new kitchen, all new floors etc. I would guess you be at least 100k per house to rehab. More likely 120k per unit and that assuming you running project. Honestly, if you cant get a ballpark yourself, might need to pay a gc to get you some numbers.

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Alan C.

Investor · Baltimore, MD · Member since 2015 · 155 posts · 166 votes

5y

I can't give you an exact cost to rehab a building like the one you described.

My bigger concern is whether the cost, whatever it is, would be worth the effort.

In many parts of Baltimore, you can buy a row house for $5K-10K (or less) that are in much better shape than the one you are looking at, but no one will touch them. The reason is that no matter how much or how little you spend, the property will never be worth what you put into due to the surrounding houses. That is one reason that whole blocks are abandoned and vacant. There's a tipping point where the houses are simply not worth the maintaining since people won't live in that area. And that is why some areas look like war zones and are being torn down.

If you happen to be in an area where people might want to buy or rent, then you have to really look at the numbers. For a 12-foot wide house, you are probably looking at less than 1000 square feet above grade and it will be tough to get 3 decent-sized bedrooms in that space. If the house was in a hot area, 2 beds, might be OK for a homeowner, but the fact that the house is in such bad shape tells me you're not in that kind of neighborhood.

So, you're exit strategy is probably fixing this to rent, which means it won't be using extreme high end finishes and that will save you some money for materials. But the bulk of renovation costs are in the labor and the more work needed, the higher the cost. And you would be spending more in demo and more to essentially build a new house versus updating an older house.

All that being said, I am confused about your idea that the foundation is rotted and may need to be demolished. Most foundations in Baltimore are cement or at least stone and they are below grade, so I don't understand why you would need to replace a foundation. I have seen foundations that have shifted or otherwise had structural issues, but never one that was rotted.

To gut a small house back to four walls and rebuild it, might cost you upwards of $90K-100K. In my estimation, your cost to buy and fix such a property is probably not a profitable project.

Feel free to contact me directly and I'll be happy to give you better ideas once you tell me the address or at least the block where the house is located.

2 Reply

Tony Vicente

OP

Member since 2020 · 15 posts · 2 votes

5y

Oh my bad @Alan C. , I said "foundation" but I meant the wooden frames, joists, etc. Not sure what the right term for it is. The "structure" ?

0 Reply

Alan C.

Investor · Baltimore, MD · Member since 2015 · 155 posts · 166 votes

5y

That's OK.

So you are looking at gutting the property back to 4 walls which, as I said, could run $90-100K. That should include replacing the joists, floors, etc. It could be a bit more as you may be required to bring in a structural engineer and have to pull extra permits.

While it's possible to make money with this type of project, you need to be in the right place at the right time and I still find it hard to believe that you wouldn't be better off finding another property.

1 Reply

Chris SvendsenPro Member

Front Royal, VA · Member since 2016 · 306 posts · 240 votes

5y

Originally posted by @Tony Vicente:

Oh my bad @Alan C. , I said "foundation" but I meant the wooden frames, joists, etc. Not sure what the right term for it is. The "structure" ?

If you know this little in the construction of a building I would not get into this large of a project. You are going to have to hire someone who knows what they are doing and hope you not just throwing money out window. Buildings this bad can get real expensive fast if you get in over your head. There are plenty of houses in Baltimore that are in better shape that you could fix and rent. I would look towards those and stay away from something this serious.

3 Reply

Ozzy SirimsiBusiness Member

Real Estate Agent · Baltimore, MD · Member since 2016 · 1k+ posts · 782 votes

5y

I second @Alan C. on it. You are looking for 100K

0 Reply

Wayne Matthews

Rental Property Investor · Baltimore, MD · Member since 2020 · 1 post · 0 votes

5y

Hey hows it goin @Tony Vicente. My name is Wayne, I live near the Baltimore city area and literally want to do everything you’re talking about here. I know this post is a couple months old but I’m super curious as to know the update of your success with the rowhome project. Despite the fear of this being my first project, how tedious this can be, cost etc. there’s one specific area that I want to do this with only I don’t really fear fixing one house and not being able to rent it because it’s next to another vacant as i plan to buy, fix and rent every rowhome on that block. I want to put together a 5-10yr plan with the help of some existing owners on that block and in the community.

0 Reply

Mark Cruse

Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes

5y

These properties stay on the market for a reason. In most cases an experienced investor will never touch it. It sounds so sexy to see a $5,000 home on the MLS and people feel they can´t lose. Many lose and lose astronomically. It would be hard to price this because you can find out more and more as you go. There are properties that are tear downs because they cant be fixed. Some of what you described sounds possibly close to that. I´ve seen properties where the foundation, waterproofing, mold mitigation, and rotting sewer pipes alone are well over 100k. Think of that in addition to a full gut back to the studs; this encompasses replacing all plumbing, electrical, drywall, flooring, new fixtures, appliances and HVAC. This could be pushing things close to 200k. Then getting it up to code and passing all the inspections could take time. Not an optimal situation in a place that may be un-rentable where the property is only worth 50k. There are so many ways to invest that are much easier with a much higher probability of success!

1 Reply

Max T.

Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes

5y

@Tony Vicente

My full renovations in Philly usually end up costing me ~$70/sq ft. I’d expect Baltimore to be similar.

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Crumbling row-house, cost to rehab

Crumbling row-house, cost to rehab

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