Chinese Drywall - 3/2.5 Townhome in Cooper City, FL - potential good buy? Or run?

Question

Title pretty much sums it up.

My wife and I are expecting our first child soon and we were looking to upgrade from our 2/1 condo in Wilton Manors, FL and purchase a 3/2.5+ TH/SFH in Broward County, FL. Homes in the two cities we're looking into (Pembroke Pines & Cooper City) are still well into $400K+ category, but there's this home that's up for sale that's listed for in a neighborhood that my wife and I like. But as the title says, it has CDW.

I was wondering what an average CDW full gut would end up costing. Not sure if it needs a full gut, but I want to run the numbers as if it will be worth the cost. FYI, it is a 2 story 1,400 sqft townhome. New ordinances state plumbing and electrical does not have to be replaced, just outlets, switches, and fixtures.

$5 per sqft for demo and new drywall (including trim)
$20K bathrooms (2; A-- level fancy)
$15K for cabinetry/countertops kitchen (quartz, farm sink, etc)
$1K for outlets/fixtures/switches
$5k for paint
Flooring & Ceiling don't need to be replaced and not changing floor plan
$500 City Code Permiting/Inspections

With acquisition, closing costs, and if my estimates are true, it would still be worth the cost as it would leave about $50K of a buffer after renovations from current comps. And with the fact that I would have purchased the property at a lower acquisition cost, my taxes would be lowered further, thus allowing us to save up faster towards property #3 after all is said and done.

Am I over/underestimating costs? Or completely missing something? Is ~$55K ($48K + 10% stupid tax) renovation seem an accurate estimate?

Or, should I just completely avoid the whole project?

Thanks in advance.

With acquisition, closing costs, and if my estimates are true, it would still be worth the cost as it would leave about $50K of a buffer after renovations from current comps. And with the fact that I would have purchased the property at a lower acquisition cost, my taxes would be lowered further, thus allowing us to save up faster towards property #3 after all is said and done.

Am I over/underestimating costs? Or completely missing something? Is ~$55K ($48K + 10% stupid tax) renovation seem an accurate estimate? Or, should I just completely avoid the whole project?

Thanks in advance.

Chris Seveney · Answer

@Chris Adams

I doubt you can get someone to remove all the drywall and reinstall for 7,000.

Also CDW was corrosive do most likely your electrical at a min would need to be redone

Adam Schooley · Answer

@Chris Adams I live in Davie right near the property. It went under contract very quick because of the list price. We just have to wait till it closes to see the actual purchase price. I am seeing more deals coming to the market recently. I just put a nice single family in Davie under contract that I will be remodeling in 2 weeks.  Good luck with your searches.

Chris Adams · Answer

Hey Adam,

No I did not. I asked my realtor for study of the neighborhood so I can run my numbers, but she said it was already under contract.But it might have been a blessing in disguise, as my numbers did not add up. Based on a few adjustments, including a few suggestions on pricing in this thread, the income would have not supported the property for our needs. I am wondering what price the contract went under for though...

Kevin Maher · Answer

Run this is a bad idea.   You need to hire a contractor.  If it is deemed hazardous you could violate codes by not using a contractor specializing in it.  You will have to remove the ceiling.  All sheetrock.  Insulation in attic will have to come out.  You should be paying about 100k for the risk involved.  You need the contractor to get the cdw condition lifted.  If you didn't have proof that this was done and lifted from the title I as a appraiser would have to value the impact this has and it's the cost to remove all sheet rock.  Sometimes wiring has to be changed and almost always HVAV system.  I have some experience with this.  You won't be able to get typical financing if a appraiser notes this.  It is considered a hazardous living condition.  You could only sell to someone paying cash or investor.  You don't know what you are doing which is risky.  And you should be rewarded for that by a very low price.  Similar houses in my area NWFL in 2012 thru 16 sold for about a 75 to 80% reduction in price.  It's big.   If you do buy.  Find out what it would take to get the designation removed.

Adam Schooley · Answer

@Chris Adams did you get the property under contract?

Adrian Lemus · Answer

Delivery would be like an extra $150. But yes, that’s what you’re looking at.

Ryan Normand · Answer

Does that include material? $54 per sheet for material, delivery, hang, tape, and texture/finish seems cheap to me.

Adrian Lemus · Answer

Chris is right, you got everything else within range but the drywall its pretty off. The Demo is about right but the Drywall your looking about $54 a sheet, that’s the sheet, hung, and prepped with a #4 finish.

If you want, I can take a look at the properties if possible and give you a better idea on what your looking at.

Chinese Drywall - 3/2.5 Townhome in Cooper City, FL - potential good buy? Or run?

Most Popular Reply

Contact Us