Full Gut Remodel Costs

[Dan Creed]

Recently acquired a single family property through a death in the family. 2000sqft property needs a full gut and plans to turn into a 2 family. No debt on the property. Estimates are bout 400k for full gut remodel (hvac, plumbing, electrical, roof, mostly new windows, kitchens, and baths, minor re-framing) New plan is for (2) 2B1B units and will rent for 2k and 2500/mo. 1 unit is a larger 2 bedroom. Any feedback on these numbers? Initial thoughts was this is expensive but I have multiple GCs in the 400k range. 

[Matthew Paul]

That price may not be that far off . You need 2 hvac systems , 2 electric meters , you should split the units and submeter the water .   

Dont know the pricing in Mass but you may want to see how much it would be to do a tear down and go new 

[Peter Mckernan]

Quote from @Dan Creed:

Recently acquired a single family property through a death in the family. 2000sqft property needs a full gut and plans to turn into a 2 family. No debt on the property. Estimates are bout 400k for full gut remodel (hvac, plumbing, electrical, roof, mostly new windows, kitchens, and baths, minor re-framing) New plan is for (2) 2B1B units and will rent for 2k and 2500/mo. 1 unit is a larger 2 bedroom. Any feedback on these numbers? Initial thoughts was this is expensive but I have multiple GCs in the 400k range. 

 It is close, but all areas are different.. I would get a couple more quotes, see how those quotes are broken down.. Got a buddy out there that is a solid realtor, and I could connect you to get a better gauge if you need it. 

[Josh C.]

I feel we could do that for around 300k, but that’s Indianapolis. Unsure your market.

Thats ground up new construction prices just about.

[Leo Gregoire]

have you considered making the place into two high-end condos instead? you have to put the work in with the remodel either way but if they're high-end condos you can sell them each for more than the property as a whole and make more in one transaction than you would on a cashflowing rental

[Evan Polaski]

@Dan Creed, this is honestly in line with my general costs, but it will also depend on finish level.  Are you going true hardwood vs carpet vs LVP?  Are you putting in basic cabinets, midgrade or high-end?  Linoleum counters versus solid surface...

Secondly, have you thought about your resale value?  In my market, single family's sell for premiums to two families.  So while every market is different and $4500/mo in rent is nice, are you spending a lot of money to have a less valuable property, versus spending that same $400k (or less) to do a nice renovation and keep it single family home and sell it or rent it out as a nice single family? 

And lastly, are you able to convert it to duplex?  This can often mean a zoning change, so worth a call to the zoning office first.

[Dan Creed]

Quote from @Leo Gregoire:

have you considered making the place into two high-end condos instead? you have to put the work in with the remodel either way but if they're high-end condos you can sell them each for more than the property as a whole and make more in one transaction than you would on a cashflowing rental

 Leo,

Doesnt really fit the mold for the demographic in this area. Also, this property is adjacent to 2 other properties is in a trust with siblings. 2 siblings still live on property. I'm planning on holding for the next 30 years until I retire. 

[Dan Creed]

Quote from @Evan Polaski:

@Dan Creed, this is honestly in line with my general costs, but it will also depend on finish level.  Are you going true hardwood vs carpet vs LVP?  Are you putting in basic cabinets, midgrade or high-end?  Linoleum counters versus solid surface...

Secondly, have you thought about your resale value?  In my market, single family's sell for premiums to two families.  So while every market is different and $4500/mo in rent is nice, are you spending a lot of money to have a less valuable property, versus spending that same $400k (or less) to do a nice renovation and keep it single family home and sell it or rent it out as a nice single family? 

And lastly, are you able to convert it to duplex?  This can often mean a zoning change, so worth a call to the zoning office first.

 Evan,

Obviously depends on costs but this will be a rental that I plan on holding long term. Won't be high end but I will spend money in areas where it will be worth it to limit maintenance. Thinking LVP or prefinished hardwood and some solid surface counters with lowes quality cabinets. Comps when the 2 family conversion are complete are around 650.