Real Estate Consultant · Lansing, MI · Member since 2010 · 117 posts · 32 votes
The current economic downturn and real estate market offer a great opportunity for rehabbers to make serious money. IF they make the right choice when buying property. My questions are these for experienced rehabbers:
What is the biggers rehab you've done on a property in terms of cost and extent of repairs?
What the single biggest repair expense you've seen on a rehab? Is this particular expense a recurring theme in your rehab purchases?
What is the largest expense you've incurred on a roofing job?
What was the largest expense you've incurred on an electrical job?
What is the largest expense you've incurred on a plumbing job?
If you have done a total rehab i.e. floors, roof, electric, plumbing, structure, masonary, appliance etc. how much did it run you.
If you can also indicate the type of property i.e a SFR with the number of bedrooms and baths or a multi-family rental with the number of units it would be great. I'm just trying to get an ideal of the repair side of rehabbing. After all more often than not it is what makes or breaks a rehab deal in terms of profitability.
You'll find that repair estimates vary greatly by location, by materials costs and also by type of contractor you use. If you're doing high-end rehab and need artisan contractors to design you a custom home, it could cost 4x as much as if you're doing an entry-level SFH with stock materials and lower-end labor costs.
Personally, I focus on entry-level SFH selling in the $100-140K range. My typical rehab is $40-50K, and generally covers an almost complete cosmetic rehab (inside and out).
I'm in Atlanta where there is a huge real estate industry and a glut of out-of-work contractors, so labor is pretty cheap right now. Also, because the real estate industry is so large here, materials are generally pretty inexpensive (especially these days).
A typical gut-rehab on one of our entry-level houses costs about $20-30 per square foot, with the average right about $25.
In terms of learning about repair costs, my best suggestion is to find a house that needs work, put together a scope of work that is needed, and then sit down with a couple general contractors to get an idea of what they would charge for the various work items. Ask lots of questions (like where the numbers came from), and you'll start to understand how to estimate a renovation.
For example, the cost of a typical roof replacement is going to be estimated per square (a square is a 10'x10' section of roof). So, a roof that is 2000 square feet in area will consist of 20 squares. If you call a couple local roofing companies, they'll quote you a price per square -- probably somewhere in the $150-200 range.
Of course, the price could vary based on the number of layers of shingle currently on the roof, how steep the roof is, whether the plywood under the shingles needs to be replaced, etc. But, understand the cost-per-square that you'll pay from local roofing companies will go a long way towards helping you estimate the cost of replacing a roof on a house you're working on.
For me, every house I renovate is pretty similar. Most of the house were built in the mid-1980's, so the roofs are 20+ years old. This means that 90% of the time I need to replace the roof when I start a new project. And most of the houses have roofs about 22-26 squares in size. My roofer charges about $160/square, so before I ever go look at a house, I can probably assume that I'm going to spend about $4000 to replace the roof.
You can do the exact same thing with all the other renovation areas, though some may be harder or easier to estimate. But, once you start to understand how the contractors are determining their prices, you can get a good idea of what your costs will be for a particular job.
You'll find that repair estimates vary greatly by location, by materials costs and also by type of contractor you use. If you're doing high-end rehab and need artisan contractors to design you a custom home, it could cost 4x as much as if you're doing an entry-level SFH with stock materials and lower-end labor costs.
Personally, I focus on entry-level SFH selling in the $100-140K range. My typical rehab is $40-50K, and generally covers an almost complete cosmetic rehab (inside and out).
I'm in Atlanta where there is a huge real estate industry and a glut of out-of-work contractors, so labor is pretty cheap right now. Also, because the real estate industry is so large here, materials are generally pretty inexpensive (especially these days).
A typical gut-rehab on one of our entry-level houses costs about $20-30 per square foot, with the average right about $25.
In terms of learning about repair costs, my best suggestion is to find a house that needs work, put together a scope of work that is needed, and then sit down with a couple general contractors to get an idea of what they would charge for the various work items. Ask lots of questions (like where the numbers came from), and you'll start to understand how to estimate a renovation.
For example, the cost of a typical roof replacement is going to be estimated per square (a square is a 10'x10' section of roof). So, a roof that is 2000 square feet in area will consist of 20 squares. If you call a couple local roofing companies, they'll quote you a price per square -- probably somewhere in the $150-200 range.
Of course, the price could vary based on the number of layers of shingle currently on the roof, how steep the roof is, whether the plywood under the shingles needs to be replaced, etc. But, understand the cost-per-square that you'll pay from local roofing companies will go a long way towards helping you estimate the cost of replacing a roof on a house you're working on.
For me, every house I renovate is pretty similar. Most of the house were built in the mid-1980's, so the roofs are 20+ years old. This means that 90% of the time I need to replace the roof when I start a new project. And most of the houses have roofs about 22-26 squares in size. My roofer charges about $160/square, so before I ever go look at a house, I can probably assume that I'm going to spend about $4000 to replace the roof.
You can do the exact same thing with all the other renovation areas, though some may be harder or easier to estimate. But, once you start to understand how the contractors are determining their prices, you can get a good idea of what your costs will be for a particular job.
What is the biggers rehab you've done on a property in terms of cost and extent of repairs?
We did a full gut rehab on a fire damaged three unit home. The rehab cost around $120,000.
What the single biggest repair expense you've seen on a rehab? Is this particular expense a recurring theme in your rehab purchases?
I like to vinyl side alot of our properties and it can be expensive, especially on the bigger homes.
We've also installed some new septic systems, these run around $20k and would be the single biggest expense on any project we've done.
What is the largest expense you've incurred on a roofing job?
We did a very steep roof that had a layer of asphalt shingles and a layer of cedar shake shingles underneath that. The roof needed to be ripped off and new plywood added. Cost was around $10k.
What was the largest expense you've incurred on an electrical job?
Full house rewire.
What is the largest expense you've incurred on a plumbing job?
Full house replumb.
If you have done a total rehab i.e. floors, roof, electric, plumbing, structure, masonary, appliance etc. how much did it run you.
Single families usually run around $50k-$55k for a full gut rehab. If we do a dormer or an addition this will usually push us up to around $60k-$65k.
I want to thank everybody for their replies. The information has been very eye opening. If there are others that are doing rehabs by all means feel free to comment.