I am looking at a deal on a rowhome property in need of a gut and renovate to bring to market… The ARV in the area is ~450k and the seller is asking for 215k. The contractor rough estimate is 120k for gut and renovate, but I am skeptical about these figures. The bldg is 3 stories and would be 2200 sq ft after an addition is added. Has anyone done any work gutting out units and has a good figure for cost per sq. ft on this sort of rehab? With so much work going into a property, I am concerned about contingecy factor and such. How should I proceed to evaluate this deal? Any help would be appreciated.
Thanks.
Greg
As with any “large ticket” you would probably want to get at least a couple more estimates. This should help you feel a little better.
I am assuming that you have never used this individual before. So he/she should surely not be offended if you get other estimates.
with row houses in bad shape, there is usually more than one in a neighborhood; thus I would drive around and talk to a contractor doing (or has done) a big rehab in the same neighborhood. many times the houes are of similar age and conditions (and thus have similar issues).
similarly check the comps; it should give you a good idea of what places needing major rehab go for.