When to gut rehab vs cosmetic rehab

[Kumar Tummalapalli]

Question on a property that I am considering in the Avondale area . 

The cost to gut rehab is around 125 - 150k. With the holding costs and risk involved the return is not that great.

Asking : 250k

ARV Gut rehab , A plus rehab : 475 K

ARV cosmetic rehab : Not sure

1.5 story , unfinished basement

4 bed , 2 bath - 1700 Sq ft

My question is : When should we consider a gut vs cosmetic rehab

Few things I thought about :

1. Check the comps - Are most of them gutted and opened up ? Do we have comps suggesting that cosmetic rehab is an option

2. Current condition - Badly damaged and very boxy layout

Thanks Much

[Cassi Justiz]

Are you looking to flip it? Depending on your market a flip at that price point may not sell unless it is completely decked out and modernized. In my market buyers are PICKY with higher priced homes and they want perfection if it's been remodeled at all. 

You definitely need to know your comps. If you are doing a flip, make sure your profit margin is high enough to do it right. Don't skimp out on your current market demands or you may be stuck holding it for a while.