I looked at a house this morning that is completely gutted, nothing but wood on the inside, the outside is in good shape, the owner had the roof done and the foundation is sound. What would someone expext to spend on a completely redo? there were some spots of termite damage but this property was recently moved to this location, and no more termites, This house is nothing but a shell. Asking price is 59k but is to high, the AVR is going to be around 75k, Just guessing I would say it would cost every bit of 50k to repair. the neigborhood is slowly coming around and around the corner there are homes that go for 200k to 350k, or $1.5/$2 per sg ft.
you is right it should cost you about 50000 to repair so low ball your offer to about 49k
So now if the house needs 50k and you are offering 49k and the ARV is 75k you are uside down by 24k right?
depending on how big the house is and what qualiity of materials your using, but the $50k sounds high for the repair value if your doing it yourself.
you don’t say whether it has electrical or plumbing, but its sounds like not. Also does it have windows in place???
also need to know the size.
big ticket items are kitchens and baths room. just for Lowes/HD grade stuff, you kitchen can be easily $5k and $10k is very possible. As for bathroom, probably 1k (bare min); 2k to do an OK job.
I think to spend $50k as total budget is not out of reason. I spent $30k in materials to do a 1800 sq ft house and it was way more complete than what you have although I used 1 level up from the most basic level of finish/materials. Heck, I spent $1k just for molding and that the cheap MDF stuff. Its the small stuff that adds up.
If ARV is $75k, you need to get it almost free. Unless its a small house, I would guess you will have upwards of 1000 hr of labor into it. So, to get paid for your effort plus profit plus materials…well, offer them $10k (at best)??? Unless you are really experienced, this might be a project to let someone tackle (or get consumed by). ;D
Thanks for the input I didn’t realize I left out that this house is only 720Sq Ft and shouls only sell for 1 to 1.5 per Sq Ft. aak5454 you said you spent 30k on an 1800 Sq Ft home in just material was it completely gutted? If so than it cost you almost 17Sq Ft and at 17Sq Ft for 720Sq Ft it should only cost me about 13k right, or am I missing something?
You are missing something.
Many people try to estimate repair costs by the square foot. This is not an accurate way to do it. For example, a bedroom can be 200 square feet or it can be 500–but, the costs do not vary proportionately per square foot.
Kitchens and bathrooms are even worse…They all need the same basic fixtures, irrespective of square footage–the differences are in amount of cabinets, countertops, and flooring. But they all need a sink…
The bottom line is that each project must be estimated per system, per project. My suggestion is that you either get an estimate (more than one, by good contractors), or develop a familiararity over time to try and do this yourself. The “cost per square footage” model of estimating is not a good way to start.
ive done 2 rehabs and for both of them they cost me about $7 per square foot for material. That is just repainting walls, new carpet/tile/laminate flooring, cabinets, plumbing, fixtures, blinds, countertops. All doors, walls, electrical wiring outside was all good. If you have to drywall the entire house, then you’ll probably be upwards of 9-$10 a square foot. What do you plan on doing with the house? live in it? sell it? rent it? That will be your determining factor on how you should proceed with it.
I agree with Tom that using the cost per sq ft is terribel way to estimate. IMHO, it is a completely meaningless number for the reasons he pointed out. Your need to thing is terms of systems (plumbing, electrical, etc) and rooms (bathroom, kitchen)
To answer the question abou tthe referenced job (1800ft house), the big areas was $6k for windows and doors, $4k for kitchen cabinets alone (big kitchen). The house was about 80% gutted.
I’ve done a house about the size you referenced, but it was not a complete gutted; just major work to repair tenant destructions. I spent $3k in materials including carpet
Assuming the house has windows, doors, a heating system, a good roof, I would guess that to built it back yourself would be $20K in materials; maybe less, but I can think of $10k off the the top of head without thinking too hard.
The real issue on this deal is you need to get paid for your labor. Sure, in cash terms if you got it for $40k and put $20k and sold it for $75k, you think great, I made $15k. However, you have got selling cost, holding cost PLUS many, many hundreds of hours of labor. If you paid a contarctor to do this job turn-key, it would be $40-50k. So, I come back to this house in its current state is worth $10k (IMHO). Obviously, that is far away from what the seller is asking.