It's sheathing, felt paper, and asphalt shingles.

So a shack 2/1 in PB that rents for $4k/month will likely have lower cap expense than a 3/2 in Detroit that rents for $800/month but if I use rent percent as the basis for cap expense the little PB 2/1 would have more cap ex allocated.BTW my roofing exercise on a 1000' structure in San Diego county: $8K replace asphalt shingle roof / (25 (years lifetime asphalt shingle) * 12 (months per year) = $26.67/month. 

This is the largest house I have renovated and the biggest renovation.Construction went well, but we got hit with a huge surprise the asphalt shingles were laid on top of the original wood shingles, not only more labor to tear it off, but more labor and material cost for the decking.But, by the time it was over I had delivered an AMAZING house.

Utilities - Water and Sewer 58.33 (Confirmed from seller) - Gas and Electricity 208.33 (Estimating to confirm) - Garbage (NA for this property) - Cable, Phone, Internet 120.00 Pest Control (NA for this property) Accounting and Legal (NA for this property) Monthly Operating Expenses 1,085.00 Net Operating Income (NOI) Total Annual Operating Income 33,480.00 Total Annual Operating Expense 13,020.00 Annual Net Operating Income 20,460.00 Capitalization Rate and Valuation Desired Capitalization Rate 10.00% Property Valuation (Offer Price) 204,600.00 Actual Purchase Price 210,000.00 Actual Capitalization Rate 9.74% Loan Information Down Payment 21,000.00 Loan Amount 189,000.00 Acquisition Costs and Loan Fees 4,000.00 Length of Mortgage (years) 25 Annual Interest Rate 5.000% Initial Investment 25,000.00 Monthly Mortgage Payment (PI) 1,104.88 Annual Interest 9,361.50 Annual Principal 3,897.00 Total Annual Debt Service 13,258.50 Cash Flow and ROI Total Monthly Cash Flow (before taxes) 600.12 Total Annual Cash Flow (before taxes) 7,201.50 Cash on Cash Return (ROI) 28.81%The Official Details From Seller:Asking: $210,000.00Property DetailsStoreys: 2 Building Size:Lot Size: 1045 Square MetersBuilding Size: 2328 Square FeetEstimated Annual Taxes: 3093.00 (2017)Unit 2 Presently rented: Rental Income $900.00 /month (not including Power)FeaturesWater Front Property (In this small town)Flooring Unit 1 Laminate and Unit 2 Laminate, Vinyl and CarpetFoundation - Concrete with 4 foot walls for unit 2 apartment (allows for much natural light with large windows in all rooms)Heating - Baseboard, Electric,Other Inclusions - Dishwasher, Fridge, Stove, Blinds, Washer, Dryer in both units~ Taxes, Water/Sewer paid until the point of SaleOutdoor: Landscaped and water fountainRoof Asphalt ShingleServices Electricity, FibreOP High Speed Internet, Telephone and cable/satelliteWater and Sewer ~ Municipality System approximately $650.00 per yearRoomsMain Floor ~ Unit 1 1260 Square FeetKITCHEN / DINING ROOM 12’ x 15’LIVING ROOM 15’ x 15’LAUNDRY ROOM 6’ x 3’BATHROOM 6’-6” x 11’-6”MASTER BEDROOM 10’-6” x 11’-6BEDROOM # 2 (walk in closet) 9’-4” x 11’-6BEDROOM #3 9’ x 11’-6”BEDROOM / Office #4 9’ x 11’-6”DECK 12’ x 15’Rooms2nd Floor ~ Unit 2 Walk Out 1068 Square FeetKITCHEN / DINING ROOM 10’ x 15’LIVING ROOM 15’ x 15’LAUNDRY ROOM 6’ x 3’BATHROOM 6’-6 x 11’-6”MASTER BEDROOM 10’-6 x 9’-6”BEDROOM #2 9’-6” x 13”BEDROOM #3 10’ x 11’-6”UTILITY and STORAGE ROOM 9’ x 12’BABY BARN 8’ x 10’  

I recommend roofing inspection, spot check a few empty units (especially with regards to the roll up doors), HVAC (if applicable) and drainage / asphalt. 

.#3 Contact Local Contractors for Labor PricingCall local Subcontractors and get budget pricing for common repairs on your typical rehab project.For example, call a roofer and ask what their average cost per Square of Architectural Asphalt Shingle Roofing would be on a 1,500 sf house, with a 6/12 pitch.Note: Some contractors will be reluctant to share pricing without seeing the property, but tell them you are just looking for a rough budget number you can use on future projects.#4 Compile Your Prices into a Spreadsheet or Estimating SoftwareOnce you start to get a better understanding of Labor and Material costs you will want to store this data into a spreadsheet or software that you can use to help you streamline the estimating process.The Book on Estimating Rehab Costs comes with a spreadsheet that you can use to help you populate your own database of labor pricing and material pricing.

Some examples of items you should understand: recommended (non-treated) wood/soil separation, all common DFW residential foundation types, minimum roof slope for asphalt shingles, termite identification, etc. 

I say this because it’s a 1960 build in a rough area without many updates (for example it still has those original 9x9 asbestos floor tiles, roof looks old, parking area needs new asphalt, etc.).

Profitable 20%-40%)Additional SF at below market costChange layout for more beds/bathsChange layout for Practical ReasonsRaise Roof for additional LevelBUYER & RENTER APPEAL: ("Impulses" Sale and can be Profitable 0%-25%)Upgraded countertops & cabinetsUpgraded BathroomsUpgrade FlooringInterior Trim Upgrade (Crown, Chair, etc.)Fresh Paint & WallcoveringCURB APPEAL: (First Impression Makers but not much ROI)Upgrade LandscapeChange Exterior Colors / Paint BrickNew Entry Door / Door Surround TreatmentNew Entry LightingSurface Coat Concrete Flatwork / Asphalt

Sometimes it takes pounding the pavement to find the deals, most that hit the RMLS are not deals or will be snapped up by cash investors.