We are about to close on a REO sfh that needs total rehab in 70068 Area.
Property: built in 1953, SFH 3/2 1260sqft
Neighborhood: Class B,
Average comps ~ 120k within 5mile radius ( no homes sold in the same block)
Rental income around $1000-1300
Cash buy for $35000
So far I have one GC that has quoted me about $55/sqft to completely gut the interior, roofing, plumping, electrical, flooring etc. This is way too high for us and makes our sweet deal become sour.
Any recommendations on what we need to focus on for rental properties and/or referrals for contractors in the vicinity will be highly appreciated. We are going with the BRRRR strategy, and hope this will be our first of many homes if done correctly.
Thanks in advance for your time and responses.
PS: posted similar post in the landlord forum.
@Shewit Tekeste if the numbers do not work why are you closing on the deal?
we still have 5 days before closing.. I don't have rehab experience and will like to get an idea of how much it would cost for a gut job, especially for contractors in New Orleans area. I don't want to go cheap with the renovations but if I can budget 35-45k in total renovations instead of 70k that will be ideal.
Is the renovation numbers I'm budgeting for unrealistic for the type of job?
Two questions to start...does it have to be gutted because it flooded? Are you planning on being in town for the rehab?
That’s a mostly blue collar area that’s still struggling from the oil downswing. May rebound but the oil business has fundamentally changed in the last 5-8 years so it may not.
Your profile says you are in Maryland. You mentioned that this was your first deal. The 55$/square foot is reasonable. I’m worried that you are going to get taken to the bank though- renovating from distance in that area.
Most contractors from that area are still working in BR from the floods.
Best of luck.
The house is not in a flood zone, and the story is the previous owner left it fall apart. My in laws whole family is from the New Orleans-kenner area. This house is about 8-10mins drive from my in-laws house and they will be in charge with overseeing the rehab process.
@Kimberly Jones forgot to mention the reason we were think to gut the house was because they used Chinese drywall
Yea, we had big issues with chinese drywall after katrina. This definitely sounds like a tight deal. Are you planning to sell it or hold it for rental?
The plan is to buy and hold as rental