Deciding between a gut rehab or remodeling

[Sara Johnson]

Hello, my husband and I purchased our first investment property, a legal three-unit in the Evanston area, this past summer. We bought the property as a house hack using a VA loan and originally intended to do a live-in flip for each of the units over the course of a few years whilst I attend graduate school in the area. The house was built in 1917 and has lots of room for updating, especially in the kitchens and baths. After moving in we've discovered some larger issues with the property and have started wondering whether it might make more sense to gut rehab the house as opposed to just doing renovations. We would really appreciate advice about how to move forward in this decision making process. What steps can we take to make an in-depth economic comparison between these two options? We understand the basic idea of looking at the comps to determine rent vs rehab/renovation costs vs equity over time but aren't 100% sure the best way to go about this. Thanks in advance!