We are looking for a 3-4 month rental while they will be rebuilding there home.

The Replacement Cost (RC) (cost to rebuild with the same kind and quality) or the Actual Cash Value (ACV) (Replacement Cost - Depreciation). 

I was thinking I could tear them down and rebuild but the current owner stated if I tore them down I could only build two properties on the lot, LA changed zoning or some ordinance years ago, so I am thinking of just rehabbing them and keeping the 3 units.

Looks like I probably need to rebuild that whole part of the house Also if anyone can recommend a good contractor in Baltimore who would handle that kind of work would appreciate a recommendation!

Your estimate of $20 a square foot would mean I could rebuild for $30K and this is obviously not going to happen when you consider high cost items such as new electrical, new plumbing, new HVAC, new kitchen and baths, etc.

For about the last 6 months I have found that houses are selling close to what the rebuild cost would be.

The cashflow on the small apartments I'm analyzing should be good enough to rebuild my DP funds for the next deal pretty quickly... or so I hope.

Just get back to work and you can rebuild it all.

@Chen ZhouAwesome story Chen- I think you and I feel similar- I sorta fell in love with the rebuilding efforts of Detroit (my wife and I are in Tahoe not too far from you) we started right before covid, it slowed down process, since contractors disappeared but we found someone who worked well and now we are almost ready for our next property there.

Ideally, it will not only be funded to a minimum level initially, but each month, there will be additional capital allocated in the budget to continue growing that balance, so if this large expense happens, and another right behind it, you are still not out of cash.Clearly, the funding initially and allocations each month are "out of pocket" to you and/or your partner, but it is a lot less painful to draw and rebuild a reserve than it is to write a check, in my opinion.