Hey guys! This day and age properties move on and off the market so quickly there is little time to get contractors over to the subject property. Even if you could get them over there in time, most contractors don’t like to take the time to put together a well thought out bid for a property you only have a chance of getting.
You need to get the property under contract first, but you need a rough rehab estimate right? Okay, here’s how I do it.
$37/sqft – This is my average cost for doing a traditional flip that I plan on selling in the $400k to $600k range.
$45/sqft – This is an extensive rehab or a complete gut job.
$100/sqft – Adding square footage upstairs. Don’t forget the when you are adding a second story to a home, you will typically need to budget $45/sqft for all the existing square footage downstairs. This is also a good time to increase the downstairs ceiling height from 8ft to 9ft.
$125/sqft – Adding square footage on the first floor. This is more expensive because you’re adding foundation, plumbing, electrical, roof, etc.
These numbers include some room for other items that aren’t necessarily construction cost, but they are costs nonetheless. Always better to shoot high on the rehab and be pleasantly surprised at the end. I’ve had to learn the hard way far too many times.
Don’t let someone selling you on an opportunity let you believe that you can do it for less with their guys. Those guys are worthless; they don’t show up for work, and they always come in WAY over budget. Shocker!
Happy flipping guys!