- This topic has 9 replies, 5 voices, and was last updated 10 years, 5 months ago by exsdgal.
December 11, 2012 at 1:54 PM #20366December 11, 2012 at 2:01 PM #756101spdrunParticipant
Figure out what the rent will be, then aim for 7+% p/a return after expenses.December 11, 2012 at 2:08 PM #756104UCGalParticipant
I don’t think pricing should be related to whether it’s a short sale or foreclosure. Figure out what the market value of it is (as is), and figure out if that pencils out. Make your bid on that info.December 11, 2012 at 2:17 PM #756109no_such_realityParticipant
I appreciate the replies but you’re not following.
To pencil out, I first need to figure out what my input ‘get it ready’ capital will be.
It’s “pre”foreclosure. Basically, it’s a foreclosure that just hasn’t been foreclosed. It’s empty, all utilities are off. Toilets and sink traps are dry. Doors obviously have been left open as leaves are in the house.
Given the unknowns around not being able to test the HVAC, the plumbing, the electrical, etc.
How do you estimate expenses? Assume they’re all shot? Some subset are shot, best gut by looking at them?December 12, 2012 at 8:06 AM #756157
Assuming a typical SFR around 2000 sqft in north county, in a worst case scenario it would cost about 30-40K to replace everything.
a/c, heating, minor electrical upgrades, plywood cabinets, granite kitchen, bedrosians porcelain/12mm laminate flooring, $400 toilets, water efficient fixtures, water heater, painting, insulation, minimal low maintenance landscaping. Another assumption is the roof is intact, and there is no additional plumbing or duct work for the heating/cooling units.
Here are the caveats in the pricing – some of the work needs to be done by you, tons of research to find the materials, right contractors to do your flooring, and other installation. It is possible to remodel the house for the costs above, by doing some self work, and trading instead for above mid-high quality name brand materials. If the remodeling will be completely hands off then the costs can be higher.
If the intent is to keep the property as rental, my suggestion would be to get the best materials one can afford for the budget. Good luck with your project.December 12, 2012 at 8:09 AM #756158spdrunParticipant
And by “best”, you surely don’t mean “most expensive”, but rather “most wear-and-tear-tolerant.”December 12, 2012 at 8:18 AM #756159SD RealtorParticipant
You said the property was a short sale correct? why don’t you have your agent contact the listing agent and ask if you could start the utilities up in your name if the short sale gets accepted. This will be a small expense compared with the relatively large expense of that could be accrued with a poor diagnosis.
All they could say is no. Not much risk there is it?December 12, 2012 at 8:23 AM #756160
[quote=spdrun]And by “best”, you surely don’t mean “most expensive”, but rather “most wear-and-tear-tolerant.”[/quote]
yes, thanks for the clarification.December 12, 2012 at 8:44 AM #756163no_such_realityParticipant
Thanks exsdgal. So between $30-$40K to $50-60K depending on the amount I need to contract and my ability to find the right supplies, trades, bargains. And that’s assuming everything.
i.e. Painting, typically a $50 job (or less) doing it yourself to repaint a bedroom. Probably $500 or so to paint most of the house if just doing walls in simple neutrals.
Doing the whole house, painting over the faux painting techniques (done with varied high gloss darks and metallic paints, so unlikely common neutral flat paints will adhere), massively patching the walls, likely reskimming most of the walls after the, etc. Likely $500-$1000 done myself, if I get lucky on the faux paint, to $2500-$5000 for a painter to do it, maybe more depending on how painful that the faux marble/venetian plaster covering turns out. my thinking sounding about it?
At the moment, it doesn’t matter as the bank won’t budge from the price set at recent model staged resold flips.December 12, 2012 at 7:54 PM #756214
Like the saying goes… Time, Cost, Quality and one can pick two!
When it comes to remodeling my tendency is to sacrifice on time. The range is typically the costs involved for almost turning the interiors brand new by purchasing products off the shelf from HD/Lowes/Costco/Amazon/…. without any professional discounts. The costs does include materials and hired labor. What it does not include is the time spent by one, and possibly any expensive tools purchased for the diy remodel.
As for painting, that is one of my favorite aspects of remodeling so am not certain about the labor costs to paint the house professionally.
Regarding the faux painting there are couple of options to try –
1) if the surface has rough texture, use an orbital sander to level the surface, reskim, prime and paint. (http://www.amazon.com/Makita-BO5041K-5-Inch-Random-Sander/dp/B003M5IWM8).
2) if the faux painting is just a mix of dark high gloss paint then the repair might be simpler. Clean the walls with TSP solution to remove the dirt and
grease. Finally prime and paint.
As for painting (a) 1 or 2 coats of Zinsser bullseye interior/exterior primer followed by (b) 2 coats of Behr Semi-gloss Paint in Kitchen & Baths (or) 2 coats of Behr Statin Paint in rest of the house.
The paint +supplies cost about 1.5K, but it is worth the expense and efforts. The statin/semi-gloss finish do not show dirt/finger prints, and can be easily cleaned with mild soap and water.
Hopefully you work it out with the bank. GL.
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