Rehab costs help!!!

[Shanda Brown]

Hello,

I am pretty close to putting this house under contract for a wholesale deal but I am stuck with rehab costs. My coach won't be back in town until tomorrow but I wanted to keep the momentum going and make an offer adapter. Comps in the area are about 179k. This home needs a complete rehab and is heated by oil. Owner also mention that their was asbestos found in the ceiling of one bedroom. Any insight anyone can offer would be greatly appreciated. Owner was hoping that I could use last tax assessment which was 119k but that won't work...after I did my comps I requested them from a realtor and she provided almost identical info. The rehab costs are just the hold up. Home is 2br 1.5 bath. About 1280sqft.

[J Scott]

Originally posted by @Shanda Brown:

 Hi there jay thanks for replying. There was a leak from the roof which was repaired recently per the owner. As for HVAC home is heated by wood so definitely need some work there, she did not report any electrical problems when I asked about them. The previous owner who is now deceased lived in the home until he died. Foundation is pretty stable expect for the back porch which needs a complete repair. Please also send me your info as I am looking to work with an investor friendly rehabbed for my but and holds. 

There's really not enough information to go on there, but you're likely looking at $50-70/sf for a full gut rehab -- or somewhere in the $60-90K range.  That assumes you get "investor-friendly" pricing and you do everything permitted/up-to-code.

If the ARV is $179K, and assuming you want to make 20% of ARV in profit, your max offer is probably somewhere around $25-40K, depending on your financing costs and how averse to risk you are.