Or your cutting corners somewhere.. there is a term called lipstick on a pig.. this is what could be happening to get to that price point..

You might be able to get away with building high end apartments right now, but as mentioned earlier, I would stick to units built when labor and materials were cheaper or a run down property that could use some lipstick. 

Personally, I never felt good about trying to buy as low as possible, especially when sellers were struggling somehow in their lives and then attempting to profit by putting lipstick and paint on their pig.  

If you are just slapping lipstick on a pig then the deal would have already been scooped up which is why my light rehab changes the vanities, paint, landscape, appliances. 

You can do a square footage estimate - but that is only an estimate, and probably not a very accurate one until you've got a bunch of experience under your belt.You can line item all the "stuff" - this takes a very long time when you're getting started, and it's probably not very accurate either, especially when you are pricing at the HD, but a lot materials are going to come from a contractors supply (if using licensed contractors), and labor rates vary greatly.You can try to get a GC to come out and give you an idea of cost - but be aware that GC's don't like this, especially when they show up and find "another cheapskate investor trying to slap lipstick on a pig". 

That $34k in 'profit' is probably more like $6k after finance/partner costs, closing costs, holding costs, lipstick/cleaning, Uncle Sam and your state taxes. 

(A) You could also buy a “lipstick” rehab, which would not require so much work, and start the deal off with a conventional mortgage.

I tore into the house with intentions of making it functional and livable (lipstick on a pig).

And are you looking for lipstick work or bigger reno?

If it's a small house in a low rent neighborhood put lipstick on a pig.