is gut rehabbing a good estimate?

[Account Closed]

so i was reading this http://www.biggerpockets.com/forums/67/topics/21771-gut-rehab-costs and got the definition of a gut rehab

"A major restoration project on an old house or other building, ripping out plaster walls back to the studs and rafters and replacing them along with some or all of the trim,"

on that link it said something like a gut job is about $40 a square ft.

so if i am really bad with estimating repair costs, could i just do a 1400 sq ft house and multiply it by $40? 1400*40= 56k. so that 56k would be the the estimate of the most i would be spending on repair costs?

200k (ARV) * 70%(my profit) = 140k

140k-56k (max repair cost) =84k

now obviously 56k seems like wayyyyy toooo much unless the property has completely gone to crap... but is that the most it could be?

[J Scott]

Originally posted by @Derek LeBlanc:

im just trying to find an easier way to estimate repair costs. i am no contractor and have no idea how prices run. i went to home depot to look at prices of things but that comes nowhere close to what it would cost for installation and everything..

so how do i figure out repair costs if i have never been in construction

You're looking for shortcuts and there are no shortcuts when it comes to estimating (at least not at first)...

In my opinion, the best way is to break the rehab down into all the major components and then break the components down into specific tasks.  All of these specific tasks together make up your Scope of Work (SOW). 

Each line-item on your SOW will consist of some material cost and some labor cost.  For each line-item, you can get an idea of the material cost by visiting your local big box store, building supply shop, online retailer or talking to other investors.  For each line-item you can get an idea of the labor cost by talking to contractors or asking other investors who are familiar with contractor pricing in your area.

Then you add up all the labor and material costs for all the line items and you have your budget.

If you dig around, you'll find a lot of posts I've done going into more detail about this (both here and on my website).  And, after you've exhausted the free resources, if you want more, BiggerPockets has an entire book devoted to the topic (that I wrote).

If you're looking for a quick and easy answer, you're not going to find it.  If you're willing to do some study and some work, you'll find that estimating really isn't that hard once you have a framework.