Second Story Addition Portland Oregon

[David F.]

Hi BP'ers -

We have been searching for some time for an opportunity to do our first flip here in Oregon.  Inventory seems to be tight and we have yet to find that great deal.   However, we came across a recent listing for a 1 story house, 1800 sq ft in a great neighborhood with predominately 3K+ sq foot houses.  

Per the city ordinances, we can add 1,200 sq feet through a second story addition.

When we do our spreadsheet for all of the estimated expenses - construction and carrying costs, etc., we are coming up with a cost of $250K.   Are we estimating high?   

Included in that cost is some remodeling of what will be the first story - new kitchen and updated bathrooms, flooring, etc.

We think we could get the property ideally for $375K and it would be worth anywhere from $650-$700 when done.   $650 would mean we are basically losing money/barely breaking even if our estimates our right.    

Any thoughts/ideas from folks who have done this?

Also, anyone got any good recommendations for reliable general contractors in this area?

Any help is greatly appreciated -- thanks in advance!

David

[DuWayne Jones]

If the house is listed, is it REO or is it going for retail? If retail, that's probably too much from the start, although I'n not familiar with your market. The construction costs don't seem too crazy to me for what you're trying to do, but it depends a lot on your labor market and could vary a lot with the extent of the remodeling. Part of your estimate also needs to include a contingency for unexpected discoveries that always happen in a remodeling. I would suggest 20% or more. This is your first deal - sounds like a lot going on!