We closed on The Haggle House yesterday (sorry, no pics yet), and rehab is underway…
This should be a very quick and easy rehab — essentially it’s just paint, carpet, replace a few light fixtures, replace a broken pedestal sink, exterior pressure-washing, and a good cleaning. We’ve chosen a darker carpet for this one, in anticipation of it being a rental (dark carpet shows fewer stains), and we’ve chosen not to replace anything that’s already working just to improve the aesthetics.
Here is my anticipated budget on this one:
I don’t expect many surprises, so realistically, the budget should come in somewhere between $5200-5800, depending on how hard my contractors want to negotiate on this job. I expect the work to be completed by the end of the week, and if we decide to rent, we’ll likely put it on the market this weekend. If we decide to try to sell it first, we’ll likely stage next week and get it on the market by next weekend…
I’ll post some pictures once the work is completed…
How big is this house? Beds and baths?
Jingle –
I thought I posted the details in a previous post, but can’t seem to find it…sorry about that!
It’s a two-story, 3 bedroom, 2 bath house on a slab foundation…approximately 1450 square feet…and only about 6 years old…
When and how are you going to decide if you want to rent it or sell it? Once you start keeping ’em you will never want to sell any.
[…] Fix And Flip Tips: Creating A Rehab Budget Posted by: rein | Category: Flipping Houses, Real Estate Investing, Rehabbing Houses […]
Hey Steve –
I’ve been leaning towards holding this one as a rental since we first found it. I’ve been talking about “collecting” rentals for two years now, and keep putting it off, as I hate renting full remodels and I love quick cash-flow. But, this one is a great opportunity — it’s a new house (so there’s no deferred maintenance), the price was right (under $50K all-in), it’s small (so not a lot of work between tenant), and it should appreciate relatively quickly over the next couple years (it was near last year’s flooding, which is currently fresh in people’s minds).
My wife and I discussed trying to sell it if we could make a quick $25K, but given that we put so little into it, I’m not sure FHA would approve a loan for a high enough amount or whether it would even appraise.
So, unless something changes in the next week or two, we’ll be trying to rent it!
Hi Scott – quick question on the carpet – $900 total for a 1450 SF house? Just curious where you get it?
Love the website!
Tom
Hi Tom –
Thanks for the kind words!
As for the carpet, we get it delivered from Dalton, Georgia, where a very large percentage of all carpet in the country comes from. Because they manufacture it up there, and because they’re only about 75 minutes away, we can get great deals on carpet and vinyl flooring. Generally, we pay $3.99/sq yard for the carpet that goes into our retail flips; this is a mid-grade nylon plush that we’ve been very happy with. Additionally, we pay about $1.56/sq yard for 8 pound pad. Delivery for any amount is $70. On top of that, we pay $3/sq yard for carpet and vinyl installation and provide the tack strips for the installers.
So, total labor and materials costs for carpet/pad and installation is generally: $3.99 + $1.56 + $3.00 = $8.55/sq yard (plus $70 for delivery and the cost of tack strips). All said and done, it comes to about $9/sq yard, or about $1/sq ft.
I always add 10% for waste with flooring, so I budget $1.10/sq ft for carpet and vinyl in my retail flips.
Now, on this particular project, we’re planning to hold as a rental, so we bought cheaper carpet ($3.49/sq yard). And because the house is only 5 years old, all the pad was in great shape, so we didn’t have to replace it. In total, we purchased 125 sq yards of carpet for this project (for about 110 sq yards of actual space), and with tax that came to about $480 for materials.
As for installation, it was about 110 sq yards of actual installation, and at $3/sq yard, that put us at about $330. Add $70 for materials delivery (I consider that a labor expense), and we have $400 for labor costs.
Thanks for the quick reply and the very detailed response!
– Tom