Where to Start With Totally Gutted House

Question

Hey Guys! With the housing market being absolutely crazy right now I am still looking for a primary home. I have a chance to purchase a home that is beautiful outside, amazing property, great neighborhood, best schools in the state, but the inside is totally gutted. Assuming everything on the inspection side checks out, where would I start with this home? It’s so overwhelming to think about but I am up for the challenge if I can make it work! Any advice would be GREATLY appreciated!!!

Eric James · Answer

On BP.....you never know.

David M. · Answer

@Daniel Sabato

Actually, I'm not sure what you mean by asking where to start?  Basically, you are "deer in the headlights" when looking at a gutted house?  Sounds like you need to find yourself a good GC.  Figure out if there are any structural-type changes, e.g. open up a wall or something.  Then get the price/estimate so you can work your numbers.

When working your numbers, your "valuation" could/should differ since you are looking at it as your primary home.  so, figure out how much is it worth to you.

Absolutely, try to figure out and/or keep your eye out to why a gutted house is being sold.  In this market, it might just simply be because material prices are too high and they are cutting their losses -- just a wild guess.  Maybe there is a material defect.  For example, I saw a similar property come on the market way earlier last year.  In looking at the property, there was an inspection sticker showing failure due to leaked oil tank.

I'd be open to chatting with you if you need to understand the basics of "putting a house back together" after its been gutted.

Good luck.

Account Closed · Answer

@Daniel Sabato so the demo is already done. That's great! Get your infrastructure done i.e. MEP (mechanical,electrical,plumbing) maybe throw in value add like low voltage i.o.t. etc. Rockit, paint it and install all the eye liner & mascara.

Sounds like a great opportunity. Don't trip just move forward. Have a positive attitude & don't overthink it.

Daniel Sabato · Answer

@Eric James Yes of course!

Eric James · Answer

You do realize you can't buy that house with a conventional mortgage, right? Just checking.

Alecia Loveless · Answer

@Daniel Sabato I am looking at a totally gutted house but it also needs a foundation. My GCs estimate for it to completion, it is down to the studs, and needs everything from wiring to windows to insulation to a new roof is $120,000 plus $50,000 for the foundation. The cost for the property is minimal.

It will be a two family up/down 2br/1ba on each floor.

Knowing little about construction costs other than what the GC and I have done together on some other properties over the last two years I also came in at that same price using the BP calculator with my own estimate of costs so I figure we are pretty close.

The whole house is probably 1900sq ft of livable space plus the new basement which will likely just be storage for the first floor.

If I could find a “brand new” 2 family in my area for the price to renovate this one completely I would simply buy it, but most of the existing multis need a lot of work which is why we’re going to undertake this project. Otherwise I wouldn’t. Once it’s done it shouldn’t have problems for years to come.

Todd Schwehr · Answer

@Daniel Sabato we always start by making sure the roof is sound and the gutter systems are properly moving  water away from the structure. The we get it treated for termites and begin our rehab. Have fun. It’s a learning process.

Sebastian Marroquin · Answer

If :

1. The ARV (after repair value) makes sense

2. You have enough funds for the renovation/ construction plus another 10% emergency funds.

Then this could be the best scenario!

Get 3 contractors (from word of mouth) to come out and give you a bid (even if you haven't purchased yet) well... even better if you haven't purchased actually.

Get their bids: have a clear scope of work: make sure they are all licensed and bonded. and if you have enough for the purchase, closing costs and reno. Then go for it. Make sure you get permits with the city: the city inspector will be your second eyes and ears (checks and balances). Let me know if you have any other questions and good luck

Mel Hayes · Answer

@Daniel Sabato hello.  Get the inspection report back 1st.  That will tell you what NEEDS to be done.

Daniel Sabato · Answer

@Kevin Sobilo Obviously , I would never purchase a home before having every penny accounted for. Meant more along the lines of whether you need an architect or a GC or where to go first.

Where to Start With Totally Gutted House

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