Estimating Rehab Costs Based on Property Type

[Alexander Jivov]

Hey everyone!

I have a question as a new investor. I am currently practicing evaluating properties here in South Florida so I can get a feel for the market and what strategy would work best for my situation, and am struggling to find any off the cuff percentages (i.e. 1-2% of the purchase price) I can use to estimate rehab costs. 

For context, I am looking to get started with buy and hold LTR duplexes, triplexes, and fourplexes in and around Florida. 

I am currently building out my network and hope to connect with a contractor that can give me a more professional opinion, but before that it would be great to hear what assumptions everyone is using when putting together initial profromas!

[David Ramirez]

It really depends on the square footage and the amount of work that it needs. First, determine if you are going to be replacing any big-ticket items like roof, HVAC, electric, and plumbing. If you are not doing any of those but you are redoing the kitchen and baths it would be a mid-rehab. Otherwise, it would be just cosmetic work. To give you an example, if I'm estimating rehab cost for a 1,000 sqft home. If it's cosmetic the rehab would probably be around 15k, mid-rehab 25-35k, full rehab around 60-70k.