Question on Rehab Costs

[Alex Linden]

Hey everyone,

I have been looking into a property that I think would make a decent rental if I am able to get it for the right price; however, I have a couple concerns in regards to possible rehab.

The property is a 2 bedroom/1 bath  1100 sq/ft listed at $50000, which I will be able to turn into a 3 / 1 after renovation; comps for the area show me I should be able to rent the property for $850 - $900. 

Now then, I am a little concerned on my rehab budget mainly because of 2 things. It is an older property that has about half Knob & Tube wiring which I would replace before renting. The attic room (this is where I can make a 3rd bedroom), main bedroom, and dining room all have Knob & Tube while the kitchen, basement, bathroom, and 2nd room have updated wiring. Since I already know I would update the wiring throughout the home prior to renting, does anyone have an approximation on the cost for that? This is something I would have to hire out to a contractor as I do not have experience in electrical work.

The other unknown expense for me is that I believe the upstairs attic room which I intend to renovate has Asbestos tile for flooring (the stairway to the attic room has the same tile). I believe I would be able to replace these tiles with porcelain tiling on my own; my main concern is the fact that they may be asbestos tiles. Is this something I should just steer clear of and have a professional come in because of the tile type to avoid possible future legal issues or could this simply be a deal breaker for the whole project?

In addition, this would be my first buy & hold property. While I am confident in myself, because of these 2 potentially difficult risks, would I be better off biding my time and continuing with my deal analysis rather than jumping in on this property?

Any input on this would be excellent!

Thanks,

-Alex