Sacramento House Flip Renovation Cost

[Brennen Cook]

Hello everyone!

New here to Bigger Pockets so let me first start off by saying this community is great. I've been aware of Bigger Pockets for the past few months of have recently started doing some serious snooping around. There are TONS of questions answered here and many VERY productive discussions. Thanks to Bigger Pockets and everyone who participates!

Now about me. I'm currently in Sacramento, CA and am planning on jumping feet first into the real estate business. I've been spending the past several month educating myself, doing some small networking, and connecting with other individuals who flip by any means. For the sake of time Ill skip most of the story =P.

Long story short, after meeting with legal counsel, I now have a viable business plan, a VERY reasonable way finance my flips, and what I believe is a good understanding and education to start with. Although I believe I have most of my ducks in a row, the only thing I do questions is my estimation of renovation costs.

I've been to TONS of websites and probably used if not checked out, most of those "renovation calculators". Now before anyone starts hounding me, I do understand there is no substitute for a THOROUGH walk through with notes. I'm not looking for that. I know how to make a detailed list and i have my own personal programs with calculate cost of a more detailed level. I'm interested in a more general rule of thumb is Sacramento.

I've heard alot of different versions, but they all generally equate to the same thing. There are different levels of rehabbing. For the sake of this we'll say, Basic, standard, designer and custom. Most people then attach a dollar amount to each level of design.

With ALL this said, I am looking for someone with some experience to give me some more concrete numbers for the Sacramento Area in a costs per square foot format. AGAIN, I understand that rule of thumb is NO sustitute and I also understand it take YEARS of experience to be able to walk into a house and be within ballpark of renovation costs. I just want to know if anyone has a rule of thumb for sacramento?

For example, if I said I had a home that would be standard level ( 3,2 1600 square feet) where houses normally go for around $250,000. The house is in need of some rehabbing ( New windows, Floor and carpet throughout, new paint, kitchen remodeling, etc.) throughout the whole house. If I budgeted $50 a square foot for renovation costs is that at all realistic? To low, to high?

I am simply trying to develop a good educated guess or rule of thumb, so I do now waste my time on walking through houses with note pads and pens that I cannot realistically fix and sell on my terms.

ANY help or education is GREATLY appreciated!

Brennen

[Kyle J.]

Hey Brennen...first of all, welcome to BP.

I'll throw in my two cents regarding your question. It sounds like you're already aware of this, but it's worth mentioning that this type of estimation is hard to do with a standard price per sq ft formula. So much is dependent on what level of finish you're going for, how much (if any) of the work you intend on doing yourself vs having to pay others to do, and how much you can get the work done for if you're paying someone else to do it and/or manage it.

I'll give you some examples from my own experiences though in case it's of any help to you. (These houses were in Stockton, not Sacramento, but close enough to be comparable.)

The last house I rehabbed was a 3 bdrm, 1.5 bath, 1300+ sq ft SFH. It was older (65+ yrs old) and in terrible condition when I bought it. In the end, I ended up doing a rehab that included new flooring in the entire house, painting the entire interior (two tones), a new roof, a moderate amount of plumbing and electrical repair/replacement, new windows and blinds, kitchen remodel (new flooring, new lighting, cabinet refinishing, new appliances, etc), extensive plaster wall/ceiling repair, plus an endless amount of cosmetic work inside and out. I just tallied up the numbers for you and it looks like my rehab cost worked out to be $15.62/per sf on this house. Keep in mind I did much of this work myself, and supervised all the subs myself (i.e. no general contractor used).

The house I rehabbed before that was a 3 bdrm, 2 bath, nearly 1700 sq ft SFH. It was 35+ yrs old and did not appear to have any updates to it since it was built. The rehab I did on this house included new flooring, painting the entire house (interior & exterior), extensive pest (termite) control and remediation, landscaping, all new windows, bathroom remodels (tear down to studs), complete kitchen remodel (new flooring, new canned lighting, cabinet refinishing, granite counters, all new stainless steel appliances, etc), plus an endless amount of cosmetic work inside and out. My rehab cost worked out to be $12.28/per sf on this house, and it shouldn't have even been that much but I tried using a general contractor for the first time ever on this house and that ended up being a colossal failure. Basically, he turned out to be incompetent and didn't finish anything completely, and what he partially finished was done wrong. I ultimately had to take the job back over and finish it myself, which cost me more in lost time and money. Oh well, live and learn.

Hope this is somewhat helpful to you and good luck in your new endeavors!