Third is a charm - Please help validate the rehab cost

[Rene M.]

Hello all,

I found another prospect for my first property…

77K for a Brick end-townhome without HOA from 1986. 1200 SQFT, Fenced in yard, Little balcony, 2 bed, 1.5 bath. With a very good location right of the interstate and it's a 1 min walk to 9 different hotels.

My idea is to fix and clean the house up and then put it on AirBnB. Pessimistic business case income should be 1500$ a month - after all Airbnb+Cleaning expenses. Current market rent would be about 900.

I just had the walkthrough and found quite some things I did not like…

1k-There is downstairs laminate floor damage (due to condensation from the airhandler according to the seller).

5k-The airhandler is very old - min 15 years and so is the AC unit.

???k-There were two visible water issues under the bathroom (1 under the sink one under the toilet) - The plumbing looks like poly (below is a picture of the Waterheater - does anyone have an idea if that is Poly and if So how much it would be to replace it in a house like that)

5k-original roof but looks fine no visible roof leaks (very simple roof structure and small surface - don't know how realistic my estimate is?)

1k-Giant tree in the backyard with branches touching the roof (tree removal after approval by city)

???K-Wiring is original and I'm sure that would not fulfill current building codes - Do I have to do something as long as the electricity is working?

2-3k-Carpet on the stairs and upstairs needs to be replaced by vinyl plank

So 20K for the rehab?

There is a lot to do, but I feel the location is strong…

What do y'all think?

Any experts who can help me validate the rehab cost?

Thanks!

Rene

[Christopher Phillips]

@Rene M.

The pipe on the water heater appears to be Nibco Pex. It's hard to read the writings on it, going by what I can see and the terracotta color. Stuff is pretty cheap. What's actually leaking? The pipe or the fixtures?

What's the age of the water heater?

No reason to replace wiring just because it was built in 1986. Even if it was 1950s. It's only an issue if you have knob-and-tube wiring from the 1800s, which you likely don't. You should have three prong outlets everywhere (which are cheap if you don't), and ground fault protected outlets anywhere within 6ft of water in the bathrooms and kitchen and stuff like the laundry area. Check your local codes for exact requirements.

Air handlers are usually good for 15-20 years, give or take.  Usually best to wait until it starts to need too many maintenance calls before messing with it. Only about $1k to $1.5K to replace the air handler. About $6K to replace the HVAC itself.

Give the mold, you might eventually need the air ducts cleaned.

Do the bathrooms have vents to get rid of excess moisture during showers/baths?

Costs $3k to cut a big tree.

Is the townhouse attached? You'll have to find out who is responsible for the townhouse roof. Would need to know the square footage of the roof to estimate the costs.

If you plan to rent it out, don't use super high-end materials on the carpet and flooring.