[Calc Review] Help me analyze this deal! - Philly Area

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Hey Everyone,

I have been using homewyse and some rough calculations to get a baseline understanding for rehab costs. For this example, my assumptions were a full gut remodel of a 3bed/1bath home in Philadelphia county. I assuming the exterior is ok except new roof and painting.

The prices reflect materials and labor. I would say my biggest challenge so far has been trying to understand and estimate HVAC, Plumbing, and Electrical as the prices can vary so much due to circumstances. With that being said, are my budgets for such items reasonable?

Quick Details:

Laminate flooring thats around ~$2.20 a sqft

Quartz/Granite countertops of ~150sqft

8 White shaker kitchen cabinets

New AC unit, and new heating. (Thought 9-10k is good including ductwork, etc.)

@Eric Dami Without knowing too much about the property, just from what you've said, my initial thoughts are this:

Is this a fix and flip or a BRRRR? If it's a BRRRR I'd recommend reconsidering granite countertops. Depending on the area for a fix and flip, I'd also consider cheaper alternative options to granite. Of course granite is nice, but if you're not going to be selling to upper-scale customers, or if the surrounding houses sell fine with no granite countertops, this might be an area where you could cut some costs and increase your margins.

As far as the AC unit and new heating go, your estimate of $9-10k seems a bit low to me. However, this is highly dependent on what is actually included in "new AC unit" and "new heating". If you're sticking an AC unit in a window and calling that a "new AC unit", that's one thing, but if you're completely redoing a central air system, you might be a bit low on your estimates. The same goes for heating. If you're replacing some piping, you may be okay, but if you're installing a new boiler (for example), you'll likely be too low on your costs.

Robert Leonard

Hey Robert, thank you for a quick reply, appreciate it. 

To address your questions:

This would be a rental property, therefore if you have any suggestions on materials that are best and most durable, that would be great. I think granite would be good, and additionally I found laminate floors that are waterproof and look nice for around $2-3 sq/ft. 

For HVAC, Let's assume new central air and furnace heat. 

@Eric Dami Please do remember that everything I say is from my experience and likely varies from market to market.

That being said, if it's a rental property, I personally would NOT do granite countertops, unless you were trying to rent to a higher class tenant. At today's point in the market cycle, I wouldn't be trying to rent to high-end clients. I would make the property nice, but as cheaply as possible. You can get great looking countertops that look like granite but are actually laminate and 1/10 the cost of granite. That's what I would go with. Often times higher class tenants would be fine with that, as long as it all looks nice. If the market turns and you have to cut rents a bit, and/or rent to lower class tenants, at least the laminate materials will last.

As for HVAC, this will vary widely by the contractor, but a fellow investor I know just put a central air system in a house that didn't previously have central air, it cost $15.5k. If it had central air, I believe it's closer to $8-9k. As for a new furnace/boiler, I was quoted $8k for a new boiler in one of my properties.

Hope this is helpful.

Robert Leonard