I have owned my first property for a year now. It was mostly a cosmetic job, so I haven't gotten into to too much rehab work. So I wanted to reach out to you all for input on this possible project.
I was contacted this past Friday by an elderly gentleman who has been selling his real estate portfolio. He has one SFH left, and it is sitting vacant. He told me he wants $30k for it. It is a 3 bedroom, 1 bath, with no central heat/air, about 850 sqft. Sits on a large corner lot right in the middle of town. I looked at it today with my nephew, who is a Pillar2Post home inspector. It needs a bunch of work, to say the least. I'll work my way down. Needs new roof with decking, and possibly some rafter repairs. New windows (10), new siding/gutters. Possibly some sheathing on one exterior wall below a window that has rot beneath it. The whole house will need wrapped, as well. Moving indoors, new drywall throughout, new interior doors (4), new subfloor and probable new floor joists as the floor is very saggy, it has a crawl space. Basically, an entire gut job from top to bottom. It will require a new HVAC install, all new plumbing and electrical. My other property is a brick, 3 bedroom, 1 bath ranch with partial basement, that is 1250 sqft. It appraised at $105k and is located in the same town. I'm thinking an ARV of around $85k, though it could be slightly higher. I just don't know how to go about estimating rehab costs, and how to negotiate for a lower price considering all the work that will need done. He does understand the poor condition of the home. I estimated using J Scott's book, a rehab cost of around $50k. Does that seem too much? Seems that $50k would go a long way, but with the amount of work that needs done, maybe not. What are some of your thoughts? Thank you!
