We officially have The Fourfecta House under contract (sorry, no pics yet), and will hopefully close in the next couple weeks…
While we haven’t yet gotten our contractors out to the house to give us bids, I have a pretty good idea of where we need the budget to come in on this one, especially given that we’ve already sold three properties in that subdivision — so I’m fairly certain I know what the appraisal numbers will look like. Considering the maximum I believe the house will sell and appraise for, if we want to make our minimum profit, we’ll need to keep the rehab under $15,000.
Here’s the preliminary budget that I’ve put together that will allow us to do that:
In order to keep the budget down, we’ll likely keep the existing cabinets — they’re in good shape — and just paint them. We’ll also likely keep the laminate wood floors on the first level, as they’re in very good shape and most buyers will probably prefer it over carpet and vinyl flooring. Other than those two big things, I don’t imagine we’ll have to cut any corners, though we’ll probably do less landscaping than what we originally planned.
I’ll post pictures in the next few days, and hopefully we’ll get started on this rehab in the next 2-3 weeks. We expect this rehab to take about two weeks, which should put this one on the market by the end of September…
Another great post. Keep them coming. I am learning much.
Great post Scott. Are you finding a lot of popcorn ceiling houses? And are you remodeling them (sanding)?
Thanks
Hey Sam,
About 25% of the houses we do have popcorn ceilings in some or all of the rooms. In general, you don’t have to sand — if you wet the ceiling (for example with a roller or spray-bottle), the popcorn will scrape right off. It’s a pain in the butt for the contractors, and can make a huge mess, but it’s effective. In fact, I would never do this unless we were planning to remove all the flooring afterward, since cleaning up scaped drywall is not very fun; but, if you can just roll up the debris in the old carpet, it’s not so bad.
The big issue with removing the popcorn is that it’s usually put up there so that the drywall guys don’t have to be very precise with their taping and mudding (since the popcorn covers all the seams), so removing it can often expose some ugly sheetrock work underneath. But, if you have decent sheetrock guys and painters, I think removing it is a good aesthetic decision.
That’s a great tip! Thanks again Scott.
What is the best way you have found to set your budget? Do you use previous houses as a benchmark or are you using some other method like basing you numbers on a national average?
Great post, by the way!
Hi Nico,
We’ve used the same crew of contractors for over two years now, and they are very consistent with their prices. We also use the same materials for every rehab, so the prices tend to be very consistent from one project to another. Based on that, it’s pretty easy to estimate a job in my head just by walking through and taking some notes. Of course, it took a while to get to that point, but that’s the value of using the same reliable contractors and the same materials every time.