He everyone, I know this question is very broad, but has anyone gutted small 750sq ft 2bd 1bt house for a flip? If so how much did it cost? I just wanted a general idea
trwilliams
trwilliams,
I did a small 2/1 about 850 sq. ft for a “buy and hold”…not a complete gut…paint (inside and out), carpet, several new doors, etc. for about $2,500…
How extensive? Full gut?
How is the roof?
How are the mechanicals (HVAC)?
How is the plumbing?
How is the wiring?
How is the landscaping?
How is the kitchen?
How is the bath?
How are the walls? Sheetrock or plaster?
How is the insulation?
Sorry for all the questions but they’re relevant!
Keith
hey thanx… Yeah I would say full gut, roof looks good not sure about hvac, plumbing or wiring kitchen, and bath need complete redo wass are sheet rock, only a couple holes that I noticed. I guess I’m looking for like a worse case scenario. this house is in a GREAT are homes even small ones like this go for 175K it is currently an reo and listed @ 135k no way I am paying that in its condition
trwilliams
If it’s all cosmetic type gutting (like everything in the bath, everything in the kitchen, repair walls, paint, carpet, etc…I would guess between $10 and $25K depending on the quality of the replacement items (I do all my own work so labor is going to be extra…).
Keith
i would say 10k without labor using good materials. Not including plumbing, hvac, or electrical
even through it a small house it pretty easy to spend 10k in materials; especially on kitchen and bathrooms
I did a paint and clean with some new cabinets in the kitchen and bathroom of 600 sqft house last winter and it was $3k in materials. I did not even touch the electrical and plumbing
When I do a total gut job on my 1200 sq ft row homes, I will spend approx $22,000 to $27,000 for everything including HVAC, plumb, elec, carpet, windows, doors, paint, etc. However, I have my own crew to do everything but the licensed stuff (HVAC, plumb and elec), but I keep my subs busy and I get good prices.
Thank you all for your input!! I wasn’t to far off then, I figured 25-30k I gues now the next hurdle is the offer to the bank. It is an reo listed @ 140K comps for same homes are 170k but wow the house is trashed. structurally it is fine exterior wall are good everything else seems fine (I would get an inspection of course) I was going to offer 90k, I am trying to think possitive but that seems like a huge cut off of the price. Oh well I gues the worse thing they can say is no.
trwilliams
If you can, get into the property with a contractor – this will give you a much better idea of what you are looking at with respect to costs specific to your area. Another question I had is, how old is the house? Older homes bring problems of their own during rehab (for example, bringing the electrical up to code).
I took my contractor to a house that was burned out. I did OK on my “guess” but he was able to show me cost savings just by utilizing professional clean up techniques specific to houses that have been on fire.
When you make your offer to the bank, you’ll want to include the estimated repairs. I’ve found that banks don’t want to go that low once they’ve hit the MLS. They’ve got it listed at 82% of the comp value for the neighborhood – which they think is a hit. You’ll want to let them know what a mess it is. An offer of $90k is 52% of the comp value for the neighborhood and not likely one they will accept – prove to them they’ve got a dog you are willing to take off their hands.
Good luck to you!
Tami,
Great points thank you!! Do you think pictures would help any? Also how can you get REO properties before they hit the MLS or is this even possible?
trwilliams
I am just starting a rehab on a property that sounds very much like your own. 900 sq feet in a very trendy part of town. I also am not doing the roof but am replacing the furnace, plumbing, electrical, kitchen, bath, windows, water heater, interior and exerior doors, and the switch plates ;D.
My partner and I are doing everything ourselves ecept for the furnace and windows. With everything priced down to the washers and nails we are looking at 21,000.00.
Keep in mind this is good material, but not the best. Maple cabinets, solid surface tops, Mid-line appliances, low-e windows… If we went contractor grade we could probably drop it down to about 13000.00. Again this is not including labor on anything but the windows and furnace.
You can buy REO before they are REO which is perferable. If its not listed then contact the bank that owns it. Where did you get the listed price if its not in the MLS yet?
Definately take pictures to support the offer. Just like they will take the best pictures possible to try and sell the property, you need to take the worse ones you can find. Any sign of water damage, mold, structural damage, or bad plumbing or wiring with be best. Then again if you have a lot of these pictures you may want to reconsider, but you know what I mean. Dowen play it as much as possible.
Good luck
Hi trwilliams,
I would run the photo question by REOConsultant of this board. He’s got it going on in this department. I followed some great advice of his. I was still too low, but by following his advice, I definitely let the bank know I was serious about my offer and they treated me as such.
As for finding the REOs prior to a listing in the MLS, down here in Georgia the best way to do that is to go to the courthouse steps auction. If a steps bidder doesn’t pick up the home with a cash offer, the house goes back to the lender (becoming an REO). In my experience, 90%+ go back to the lender, and that is being generous. Usually five to ten are actually sold on the steps.
Once you know the house you are interested has gone back to the lender, contact them directly. I’ve met a lot of people on the courthouse steps who operate this way. They are not there to bid at the time, just to find out if it’s a bankowned property after that day. Many times the loan on the house is too high for them to pick it up right then and there (cash on the steps) or the loan to value is too high, etc.
A lot of lending institutions have their properties listed on their sites. Most are listed with a broker by the time the site shows them, but you can luck out occasionally.
Countrywide – Their national REO listings:
http://www.countrywide.com/purchase/f_reo.asp
GRP Financial Services Corporation – Their national REO listings:
http://www.grpcapital.com/small/map.html
Ocwen Financial (VA Repos) – I have purchased property from these guys. They are wonderful to work with:
http://www.ocwen.com/reo/reofindbystate.cfm
Good luck to you.
Or ask Baloo ;D Great advice!
Baloo I was so happy to see you are replacing the switch plates LOL 
I can’t wait to follow your rehab!