Houston,Tx cost per sqft?

Question

Hello, I'm still pretty new to all this. But I'm trying to find out a cost per square foot number for Houston, Tx. I read about it somewhere and have been trying to find a number. I know it not as simple as a coat per square foot, but it can definitely help. Thanks for any info.

Bill Hinshaw · Answer

Purchase price per sq ft in Dallas can range from $50 - $300 depending on the area. I would assume you will find a similar variance in Houston. My recommendation is to start analyzing specific areas of interest in Houston using Redfin.com. It will show you a table view of all the listings in an area with $/sq ft included in the table. You can sort by cost/ sq ft, and it will show you the average cost/sq ft at the bottom of the table. You can even export the table to Excel if you want to.Keep in mind this will be list price per sq ft, and not actual sold price/sq ft.The other thing you could do is request comparable sales data from a realtor for a specific area. This will be based on actual selling price and will be a more accurate reflection than list price.

Andrew Taylor · Answer

@Manuel DelaLlata check out FLIP by Rick Villani. He and his co-author are based out of Austin, so the numbers given are going to be pretty similar to what we have in Houston. They do an outstanding job of breaking down how to estimate rehab costs based on both the extent of the rehab and the "niceness" level of the area. I've been doing construction work in Houston for 17 years, and I can tell you their numbers are a good starting point, particularly for quick, back-of-the-napkin figuring.

Nick S. · Answer

@Manuel DelaLlata Could you be a little bit more specific? You're looking for a cost per square foot to do what exactly?

Andrew Taylor · Answer

@Nick S., you do need to adjust a little bit. I recently completed a rehab estimate for a fellow BP member over in the west Houston / Katy area. It was about 1,800sf, and my rehab estimate came to about $45k. I spoke with the investor earlier today, and he received another estimate from a large, well-known rehab outfit here in town, that was $48k.If you're unfamiliar with FLIP, they suggest breaking your ballpark estimates down via two rules of thumb. First, rate the "niceness" level - i.e. Basic, Standard, Designer, Custom. Then, rate the amount of rehab to be done, from "clean & paint" to "move walls & rebuild". They provide a chart, based on their experience, that gives you per-square-foot costs for each combination (except anything to do with "Custom," since, by definition, it's custom and can't be ballparked).Based on their chart and my (admittedly subjective) ratings of "Standard" finish level and "Remodel" scope-of-work, costs should be roughly $25/sf. At 1,800sf, that's $45k. (BTW, I completed my estimate BEFORE reading the book, lest anyone accuse me of cheating.) I actually do think my estimate was 10-15% low, and I'd suggest adjusting the FLIP chart accordingly (if you're in the Houston area, that is).I've read the J. Scott books, because everyone on BP recommends them. For me, though, FLIP was the bee's knees and I cannot recommend it highly enough.

Andrew Taylor · Answer

@Manuel DelaLlata glad I could help.I don't think I'm allowed to call myself an investor until I've done my first deal :). Call me a "prospector" for now; just started my first yellow-letter campaign last week and my partners and I are looking hard for our first deal.

Nick S. · Answer

@Manuel DelaLlata Renovations can vary so much in scope that it's really far too crude to estimate by square footage. I just finished reading the J Scott books (The Book on Flipping Houses and The Book on Estimating Rehab Costs) and they do a good job of walking you through the process of coming up with good ballpark numbers based on the scope of work that's needed. As an example, if you have a house that has a good foundation, new roof, good HVAC, nice kitchen, and nice bathrooms, you're going to pay a lot less per square foot than if you need to replace or repair those big ticket items. In J Scott's book, he gives a ballpark number for a basic interior cosmetic renovation for the type of house he focuses on of $12/sqft. But if you need to do major work other than just cosmetics, you could be paying 2-3 times that much (or more, if you've got mold, termites, etc!).

Andrew Taylor · Answer

Rick Villani

Ben Volkman · Answer

@Andrew Taylor There are a couple books named FLIP, who is the author(s) of the one you are referencing?

Manuel DelaLlata · Answer

Andrew Taylor awesome. I've been looking for a good book to read on the topic. It's sounds like the book your recommending is also exactly what I'm looking for, based on niceness. Btw, are you an investor in the area?

Nick S. · Answer

@Andrew Taylor I'll have to check out that book. Have you read the J Scott books too? How would you say FLIP compares? It looks like FLIP was published about 10 years ago -- do you find that the cost estimates are still accurate in today's market or would you add in some pad just to account for inflation?