I have a budget of 40k for a rehab Is that enough for Philly home

[David Bey]

I have a budget of 40k for a rehab Is that enough for a Philadelphia home rehab on average? I plan on attending the sheriff sale to grab a property. I know it depends on the overall condition of the property, but  on average of i land a good deal/prop would 40k be enough? 

[Jimmy Lin]

Hi David,

I recently did a flip and spent right around 40k.  It was a 1,200 sqft row home, two stories with a basement (if you're from Philly you know what I'm talking about) Not the best neighborhood, but not the worst.   Purchase price was $76k including closing costs.  House was in very bad cosmetic condition.  There were no issues with the infrastructure however, meaning all the electrical/plumbing heating units work.  Cost of repairs came to about $22k and labor was about $15k.  The whole deal took about 3 months and property sold for $125k. Total profit was around $10k.

This property was a sheriff sale.  We had to pay the tenants $500 to move out when we acquired the property.  We also ran into issues where the tenants came back and broke into the property during the renovation process.  Don't know what type of beef they had with the previous owner... but they vandalized the house.  Luckily, it was during the early stage of the remodel, so it didn't affect our bottom line.  

 Long story short, Sheriff sales are a good way to start.  The numbers part of my deal all worked out.  But I was in constant worry from the day I bought it until the day I signed the sales contract.  So your 40k budget is definitely in the ball park, but it will not cover you if something unexpected happen.  Whats the worse that could happen?  You fail on the rehab and end up taking some loses. But you gain just that much more knowledge and confidence.  Go for it man.