Rehab of apartment building - estimating costs

Rehabbing, Fix and Flip, Rental Properties
1

I am looking to purchase and rehab a run-down apartment building or two in Columbus OH, specifically near the Ohio State campus.

I am trying to research and figure my rehab costs but most of the information I find is geared more towards rehabbing a nice SFH… That is overkill for what I need.

Can anyone share their rough-guess numbers? In the numbers I give below I am assuming worst-case scenario for one building – almost nothing is there except the plumbing, electrical, walls and a finished floor.

When estimating rehab costs for student apartments, what do you expect when having to fully rehab a kitchen? I estimated around 2000.

I am estimating rehabbing a bathroom at about 1000.

I am estimating replacing a medium sized window on a brick building at about 300$. It does not have to be fancy, just basic and preferably double-paned.

How much of a nightmare is it to take down plaster and replace it with drywall? About how much does that cost per sheet or per square foot?

Roughly how much is a flat slightly-pitched roof to tear-off and replace per “Square” ?

Regarding financing-- I have my own capital for DP and rehab and good credit (770). I want a low rate and honest lender. What would be a decent rate? I am hoping for about 7%

Regarding other costs, based on research & reading other posts, I am assuming my total operation costs (including prop taxes, management, water/sewer, insurance, basic maintiance, vacancy of 7% gross rents and incidentals – NOT including mortgage) at about 50% total of gross rents.

Current asking for the buildings, given their state and vacancy, is too high in my opinion. I am going to offer him a lower amount based on some basic structural contingencies but otherwise “as-is”. If he does not accept I will begin looking for another property.

My absolute drive after purchase would be to drive down rehab costs as much as possible, so I would look to directly hire subcontractors themselves for the work and manage the process on-site myself. I would be available to do this full time and actually basically do this for a living already (but on industrial sites). I could do some of the electrical, basic plumbing and some rehab work myself to further reduce costs.

All comments are greatly appreciated! I will give back whatever I can here! :slight_smile:

2

ya know… i’ve been lurking at REIclub a long time, and the question that i see most often is “how do you estimate… whatever.”

I’m starting to think there needs to be an estimating forum or a sticky thread in this forum.

I have the same question about estimating MFH fixup, as that is my next endeavor.

I’ve looked for how to estimate: SFH rehab (kitchen, bath, floor, roof, windows, etc…) and wonder the same about MFH.

The only somewhat reasonable answer I’ve seen, but seems time consuming and a bit inflated was to write down everything that needs to be replaced/repaired, go to your local Agent Orange or Lowes, price the material and double that price for labor…

I’ve heard there’s a spreadsheet out there, but I’ve never seen it. I’ll be watching this thread… and hoping for advice/education.

Thanks in advance.

3

FYI, There is a neat estimating tool for SFH’s from contractors.com

http://www.costestimator.com/contractor-consumer/

4

Thanks, Paddington… that looks pretty interesting. The cost seems kinda high on my first trial (paint a 15x10 living at about $500). I’ll play around with it and see what else comes about.

5

Yeah. Just like the $500 to paint a living room, I also often hear high estimates that I don’t understand.

The remodeling shows on TV are a good example. “$7,000 to bump this bedroom wall back 3ft. and to move the door over to this other wall”. Geez! In my little corner of Ohio, a do-it-yourselfer probably wouldn’t have more than $500 bucks in it! With a new door!

6

Hey guys…

I was a licensed remodeling contractor in MD for many years.

The $500 for the living room… think a minute…that cost is to bring in a licensed and insured professional painting contractor in to paint a single room in your house.

There’s probably a half a day to sand & prep - $125
full day - 1 coat prime and 2 coats finish - $250
materials - 3 gal paint & prmr & misc Mats - $90
O/H & P - ??

But you can easily see how the cost to you can quickly mount up to $500. In fact in some areas that would be a bargin.

The specs (and therefore the cost) for painting your living room will be much higher than for repainting the same sized room in a rental. The books are geared to homeowners getting work done on their own homes.

Also, if you are going to use a gypsy contractor using undocumented laborers, then your costs will be much lower than the book.

Typically, if you give yourself a good guess for how much you think something is going to cost - then double it and add a little more and you’ll probably be ok. I’m serious.

Cheers!

Kip

7

Paddingtonpope,

If you’re rehabbing a low income building or student housing, then you should expect that the tenants will be VERY hard on the place. THINK USED AND DISCOUNT! I have several buildings like that and I try to minimize rehab costs to the max extent possible. I buy used appliances from individuals and from used appliance shops. The walls will suffer frequent holes from these tenants. When they start to look bad, we texture (popcorn) them to hide the patches. There are places that sell used and “scratch and dent” type windows and doors. I also buy doors from other investors who take them out of their units. As an example, a wood six panel door at Lowes is over $100. I recently bought several wood doors in excellent condition from a court employee (approached me at the courthouse after an eviction) for $100 total. Buy the cheapest carpet that you can find. Lowes has some nice berber for about 45 cents a square foot. Whatever you buy, the tenants will destroy it in no time.

If you can’t find used windows, Factory Direct in Columbus will build and install new double pane, tilt-in windows (including the capping for under $250 per window, if you do an entire building. I think their number is 44-DIRECT, but I could be wrong. Talk to Michael (the owner) and tell him you are an investor - (NO THAT IS NOT ME).

Good Luck,

Mike

8

As you can see Paddington, it comes down to pricing out each and every material all the way down to nails and screws. If your putting up drywall (I’d probably just put the drywall over the plaster in your example), you need to know the cost of drywall per 4 X 8 sheet in varying thicknesses, how many tubes of construction adhesive you’ll need per sq ft/yd, how many nails or screws you’ll need per sq ft/yd, how many rolls of tape you’ll need, how many buckets of mud you’ll need per sq ft/yd, how many buckets of primer and paint you’ll need per sq ft/yd. When you call in subcontractors to give you quotes, this is what the smart ones do. Typically it is then doubled to account for labor. Anymore and the price may be unreasonable. Even if you plan to do the some of the work yourself, I’d still recommend estimating your projects with outside labor included. For all you know you’ll get in a car accident tomorrow and both of your arms and legs will be amputated and you’ll be stuck with a building with a renovation budget 100% too low.

By all means, get the material for as cheap as you can in a low income building as Mike suggested. I keep storage units all over my state to stockpile on cheap materials when I can find them, but when doing a rough estimate, I still always use the “Agent Orange” (great name) and Lowe’s material prices for a worse case scenario.

9

Sorry to bump the thread, but just wanted to say thanks for the assistance –

Some research revealed that this property itself might have some sticky legal problems with the city, and I think the project may be beyond my capabilities at the moment since I’m still new to to this world.

Too many red flags, baby steps first, eh :slight_smile:

Still looking though, just for something smaller to start out with.

Paddy