Rehab Thought for a Noob?

Question

I'm a noob and so's my wife. I've always wanted to do this thing, and only now do I have the opportunity and the game/handy wife to give it a go.

What I'm looking for is some thoughts on cost estimates. We're handy and creative, but not expert, and while this will be a "part time" project, one or both of us can be on site for at least 6 hours a day most days.

It'll be owner occupied.

So here's the poop:

150y/o brick 3 story. 2000 sq'

Needs:
New roof
partial gut
8 new windows (4 "historic" inserts)
9 repaired windows
2 new exterior doors and 1 rotted sill replacement.
all new plumbing (3 baths 1/2, full, 3/4)
mostly new electric (if only to sleep better)
new furnace (though there are two on premises)
A/C
some refinished floors, some carpet
new kitchen
insulation
framing
drywall

We'll also want to deal with a concrete patio that's draining water toward the foundation before it causes problems.

The place is in a transitional neighborhood (i.e 1 block away $300k homes and $150-275K condos, but plenty of ratty joints too). We'll have off street parking and ability to get a dumpster to the rear of the home.

We can get the property for $33k, we can get a low interest ( <5% ) @25k rehab loan from the city, and as much as a $6k grant at the end of the project if we agree to stay for a few years. I've also found a banker who wants to try to make a rehab loan at 6.65%ish for a 4/1 variable.

So, first off, what do you guys think of the project on it's face?

Secondly, how much should we borrow from the bank?

I'm getting estimates for pretty much everything but they're purposefully high end and we intend to do a lot ourselves. What do you guys think you can do a project like this for?

We're in a large mid-western city (I know, too cagey, but we'll be more forthcoming when we close), if that makes any difference.

Best,
Mebits

Minna Reid · Answer

If you are living in the house - is 6 months the time you want to hold, or is 6 months the time you intend to spend doing the work? I think 30 k is reasonable (again before the drywall, framing and insulation) unless you're going all high end on everything, and I do assume you intend to do some of the work yourslef. Now personally, my rule of thumb, if it's sheetrock or whatever is to the inside of that - I can do it. I'm not messing with electrical, plumbing, hvac, or major carpentry. But gutting and rebuilding a kitchen or bathroom - no problem. Flooring - I can do it all. Sheetrock is no biggie. Cabinets, fixtures and the like are simple stuff. BUT - I am also experienced, and I work with my bf who is also a contractor. What are you attempting to take on yourslef, and what help do you have available to you?

Richard Warren · Answer

As a rehabber this is the kind of project I would get a charge out of. It is a lot of work for someone who is new to rehab. The only thing that makes me think you will be ok is that you will occupy it, that makes a huge difference. The most important thing is to know what you don't know and bring in someone who does. Get estimates on the work you anticipate doing yourself because they may point out things that you missed. I suggest reading the following: http://www.biggerpockets.com/renewsblog/ Keep us posted as to how it is going and take lots of pictures and keep a diary of the project, you will be glad you did.

Mark Young · Answer

Updating: It took until the end of November to arrange financing and close this deal. We began demo soon thereafter, but it dragged on. It's just now complete. The bad news: The Roof and two box gutters need to be totally re-done. We've been shipping water in two places for years. We need to repair a number of joists and about 16sq' of floor. The second floor's floors are bouncy and need to be tightened up. The good news: We found historically appropriate metal roofing the we can use city money on. We found metal roofing at a very good price through Modern Builders Supply. Almost every (brick) wall is nicely plumb. Almost all the floors are level. The wood floors in the rooms we want to refinish are BEAUTIFUL and have never been refinished, as far as I can tell. They will require a few repairs, however. The wife found 3.25" tapcons for $0.10 each, delivered. More as we go forward... M

Minna Reid · Answer

I think that would be the safe way to go. Staying under budget doesn't hurt. Going over does. And I do hope that you plan to get real local contractor estimates before buying. I can think "nicer average size new kitchen from scratch" - roughly 8k plus labor. But I can't see your kitchen in person. You know?

Mark Young · Answer

I intend to spend 6 months getting it "livable". I expect to be working on it for another 6 months...actually, since it's 150 years old, I'll probably be working on it forever... :shock: :lol: Realistically, I figure we'll be finishing things out all winter and into spring. So, let me rephrase what you're saying Minna: You say that you eyeball doing it for $30k, plus HVAC, Plumbing, and electric, and probably roofing assuming doing most of everything else yourself. Am I reading you right? As for what I'm willing to take on myself, well part of the demo, much of the finish plumbing, though my plumber is pretty good and fast, so I'll give him as much room as he needs/wants. Since we're not really doing any major restructuring (a couple bathroom walls, and a closet, I think we can handle that and framing with some help. I'm not afraid to hang drywall, but I'm not so sure about taping. I was planning on refinishing the floors myself (they are the most beautiful heart pine, or maybe even hemlock), but I think I'll let pro's lay carpet. I'm comfortable doing trim, repairing and hanging windows, and I definitely want to have my hands all over my kitchen. My wife is handy and relatively fearless and we work well together, so I've got that going for me. We've also got a number of friends who are in the "rehabbing business" and who are well respected. I've also got a cousin who is in the business too, with an architectural bent. As a side note, my BIL also has done some rehab and has folks who work for him that he can share with me. He can also source marble for me at cost (he imports it by the container load). Final resource, the next door neighbor works for a big name remodeling contractor and does carpentry on the side (and I instinctively like this guy). So, bottom line, best case realistic scenario, maybe $70k? Add on 15% and pray nothing too bad turns up? M

Mark Young · Answer

I'm definitely collecting estimates. I need to just for the bank. Interestingly, they are all over the map on some stuff and very consistent on other. Thanks for your input. Puck, I know these things can run high, but I have to say that $150k for a reno in our area is significantly higher than even the worst I've heard from pro's. M

Kevin S. · Answer

Sounds similar to a project I am just finishing. Even if you do ALL the work, materials alone will run 50K or more. Labor typically well exceeds materials (x3 or more) so you could quickly get to the break even point given values in your area. Many years ago I moved with my young family, into a 100 year old Victorian that needed major work, similar to yours, but hey, it was afordable. I spent the next 8 years gutting, rewiring, replumbing, roofing, drywalling, painting, etc., while working a full time job and raising 4 kids. I'd do it all again. Very rewarding and satisfying. I learned enough to eventually leave the corporate job and now invest full time in rentals/rehabs. If you plan to live there and chip away at it over several years, you'll be building equity with repairs and appreciation while learning a ton. Go for it!

Mark Young · Answer

Actually, I was asking about you, given your rough estimate. As for me, I'm not "skilled" but I'm "handy" and facile. I'm not dangerous with a hammer, saw, or drill. So, I can frame and do some installs, but I probably can't tape. I can probably finish out a bath, but I'm not going to do all the plumbing. I want to sleep at night, so I'll be bringing in an electrician. I've never tiled before, but I understand the principles and am game for it. I've lived in old homes for 20 years, so I've had to learn to deal with most of the problems (like fixing old double hung windows and the like). I figure we've got about 6 months or so and we "can" borrow enough to do a full retail rehab--I just don't want to. Does that help? M

Minna Reid · Answer

Well that would depend on a lot of things - your level of skill, the timeframe you have, cash available.

Mark Young · Answer

AC, we're on the east side in the historic district. The only problem with this area is that there may be TOO many of these projects. Minna, how much of a project like this would you do yourself and how much would you contract out? Thanks, M