Estimating Rehab Costs on Small Multifamily Properties 2-4 units

[Derek Caffe]

Hello BP Members,

Can anyone explain how the rehab costs differ for small multifamily properties versus single family homes (SFH)? I purchased the BP Book on Estimating Rehab Cost, but considering it's focused on SFH, I'm curious how I should adjust potential rehab costs.

I currently own a duplex, but now looking at a triplex that needs renovations.  Are the costs simply three times the SFH costs for the same square footage? Are they typically a percentage more? Is there a rule I could use to estimate (1% rule, 50% rule)? Is it just a measure of square footage?

I'm in the Atlanta metro, but would love to hear the various ways other multifamily investors consider rehab costs. Thank you.

[J Scott]

Originally posted by @Derek Caffe:

I currently own a duplex, but now looking at a triplex that needs renovations. Are the costs simply three times the SFH costs for the same square footage? Are they typically a percentage more?

If you read the BP book on estimating, it certainly didn't advocate estimating based on square footage...  :-)

Just like the book recommends, put together a detailed scope of work and budget from there.  But, instead of adding one set of kitchen cabinets (for example) to the SOW, you might need to add 2 or 3 sets to the SOW for the triplex.  Likewise with many of the other components.

For things like roof replacement, you'll still only have one roof, but the size of the roof is going to be greater, so your SOW will have a larger square footage for the roof, resulting in a proportionately higher cost.

Happy to answer more specific questions if you have them, but I certainly don't recommend trying to use per-square-footage estimates until you get very, very comfortable with estimating the "long-hand" way...