Help with rehab costs in Philly

[Melanie Tan]

Hi all! 

I’m hoping someone could provide some insights on rehab costs in the Philly area. I have two rentals, and did a simple flip recently. We’ve always done majority of the work at the houses ourselves, and now looking to hire out the work on a property that I’ve purchased recently. I am getting overwhelmed with trying to figure out how much to budget per sq ft to rehab the house. I had a GC come out today to give me an estimate (still trying to find 2 more GCs to go look at the house). Based on my research, his quote of 150k seems way too high for a full rehab of a 900 sq ft house in South Philly (Pointe Breeze).

Can anyone from the Philadelphia area tell me what it has costing on average for a full rehab per square in the South Philly area? Also, I would love GC recommendations as well!

Please note that the estimate that I received includes adding a powder room to the house, and reconfiguring the main bathroom. HVAC will need to be added.

Thanks for your help in advance! 

[Rich O'Neill]

@Melanie Tan If you are doing a full rehab - electric, plumbing, hvac, everything but full framing, this is not a bad number. Minus some of those larger ticket items and it gets a little less enticing. 

I have several points I want to make to you and anyone reading that is looking to work with contractors, especially for the first time.

It is hard to give a $/sqft number on anything except a full gut and rehab or new construction because there are so many variables. 

The other challenge is that it seems like there was a decade or more after about 2011 where the price to do a Philly row home was $75k, with almost no exceptions, and that was the expectation for a long time. Now that has almost doubled (hence your $150k price) and the expectation has been slow to change. The price of everything has just skyrocketed over the last few years. 

One micro example is that I used to be able to get hot water boilers swapped in my rentals for about $4k. 2 weeks ago I had one of my best HVAC guys charge me almost $10k and I almost lost my mind. And that was the 3rd and best price I got. It's that bad. 

Detail in the quote can be hugely important. If the contractor walks through in 15 minutes and spits a number out at you, RUN away. They are either building so much profit in that they can afford to be sloppy with their quote, or they aren't building in enough and will leave you somewhere in the middle of the job once they realize it. They might get lucky sometimes, but you don't want to take that risk. You should be able to read off the line items and either cut or modify them to fit your budget. 

The last piece I will leave you with is "cheap work isn't good, and good work isn't cheap". We have taken over more projects than I care to admit where the client got screwed by a contractor who under bid the project and walked off when they realized they weren't going to make any money on it. 

These last two points have everything to do with the professionalism of the contractor. You don't need the guy that shows up in a fully wrapped, macked out truck, but they need to at least demonstrate to you that they understand their business and will be trustworthy. You also don't want the guy that shows up in a beat up (possibly stolen) van and doesn't seem to have his head on right, but gives you a cheap price. 

Sorry if this was rambling but I hope it's helpful. I have had to help too many of our clients get out of bad situations and I hope that doesn't turn into you!