Did I overpay for this "down to the studs" rehab?

Question

Hey everyone,

We just finished rehabbing one side of our duplex. 840 square feet on that side. This was a "down to the studs" rehab. New drywall, insulation, plumbing, electrical, windows, flooring, trim, cabinets, appliances, bath, toilet, sinks, exterior railings, exterior siding, etc. There is very little left that's not new on that side of the duplex.

The total cost for the rehab is coming in at $29k which includes both labor and materials. My question to the forum: does this sound  about right or did we overpay? I realize it's not a simple question and there are a lot of details to take into account. I'm just looking for a gut feeling from those of you who have done this before.

Thanks,

Matt

Chris Martin · Answer

No mention of HVAC, which will jack the price up, but <$30K for everything identified in the OP's post is good. I did a similar type gut job in 2014 and my mechanical costs ($5400) were above the electrical ($4785) which included 60A to 200A upgrade, but it was a lot easier to get and keep people on the job back then. Regarding "...getting construction done (and done right) in this market is very challenging and   is more expensive." That is absolutely correct.  And I'd bet permit costs in Franklin county are less than Wake. Garner's were $80/trade for my project and that was it. Get into utility tap fees and Wooo....! You will be in the thousands.

Under $30K, so I assume you acted as the GC per NCGS contractor definition. And for the cost and scope of work, I assume you outsourced only the trades/inspected items. $29K is in line. And, my speculation, is you will recoup all that over time and more.

Christopher K. · Answer

As others have mentioned, still lots of unknown variables. If that was vinyl siding, carpet/vinyl flooring, laminate countertops, cheap cabs from the big box stores, etc. - then $29k could be a little heavy.

But if the work was done correctly, by licensed/insured guys, and or you had a GC or anyone who even remotely knew what they were doing managing the job, I would say you still probably didn't get ripped off or massively overpay or anything.

Costs on a full gut with windows, trades, fixtures, siding and the like add up really fast. Also anyone doing this on a regular basis right now knows that getting construction done (and done right) in this market is very challenging and   is more expensive. Lumber and other material costs have gone up and up (lets not even talk about plywood right now) and labor costs have continued to trend up, as we all know what high demand does to the cost of anything.

Again, assuming the work wasn't shoddy and you bothered to have it inspected and have already passed your final, I wouldn't worry too much about that cost for that amount of work. $30k goes REALLY quickly these days.

Chris T. · Answer

Another way to thinking about it is, did all that rehabbing increase the value of the property by $29K or more?  If the answer is "yes" I wouldn't sweat it.

Matthew Bass · Answer

Fiberglass shower. Basic wood trim throughout. New light fixtures. New exterior railings around the porch. Fixed the concrete steps. The location is actually Franklinton. We're not planning on flipping the duplex, although I'd definitely like to do a cash-out refi once we've rehabbed both sides. The plan was always to keep it and bump up the rent. We already have a tenant for the rehabbed side at more than double the original rent. The goal was to increase the rents and the overall value for the refi. Thanks for the feedback. Very helpful.

Robert Ombres · Answer

The finishes will tell us a lot more. $29k doesn't sound too bad, depending.

Jiri B. · Answer

30k for this amount of work and size sounds ok to me. But it also depends on finishes etc.. Did you tiled shower, or was it fiberglass insert etc. There are just too many details to take into account.

Whether you overpaid or not, would really just depend on how much you paid for the property and how much you can sell it for after rehab.

WF depending on the exact location, im guessing about 150-180k for after rehab?

Also make sure to account for any interest on the property you need to pay, taxes, insurance, commissions etc if you want to have accurate data on how much exactly it cost you..

Personally, i think getting 20-30% profit on the flip is usually what i would look for.

But overall sounds about right in my opinion! Post a link once you get it listed!!

Merrick Loveland · Answer

I'm more of a wholesaler than a rehabber (but I've done my share), so take whatever I say with a grain of salt.  But, I'd say it really depends on the area.  $33 per sqft for an 860sqft condo seems a little steep to me, but if it's selling for $225+ per sqft range that's a different story.

What are the numbers on the deal?

All the Best,

Merrick

Did I overpay for this "down to the studs" rehab?

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