SSS #179: How Much Does it Cost to Renovate 2,200 SF?

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You did NOT have to share your sexcapades with us. 🤦🏽‍♂️

☀️

Livin' La Vida Luna y Luca

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I'm convinced Luna's blood type is Bread+
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How Much Does it Cost to Renovate 2,200 Square Feet?

Before I became a Full-Time Real Estate Investor, I loved watching HGTV.

  • Property Brothers
  • Tarek & Christina
  • Love it or List it

I would geek out on how much money it costs to do different types of renovations.

Now that I'm actually in the business, I know those budgets are subsidized by the networks.

And the couples buying houses are most likely actors that couldn't get cast on a Pilot for an NBC Sit-Com.

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Anyway. we just finished our latest cosmetic rehab in Philly, and in the spirit of transparency - I'm going to share all the numbers with you.

Here is the scope of work in a nutshell:

  • Paint Facade
  • New Flooring Throughout
  • New Kitchen
  • New Baths (3)
  • Custom Closets (3)
  • New Light / Plumbing Fixtures Throughout
  • New Trimwork Throughout

Here's what we didn't do:

  • (Re)move any walls
  • MEP (Mechanical, Electrical, Plumbing)
  • Roof or Windows

Here are some pictures of the finished product (Zillow Link):

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Facade
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Entrance
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Kitchen Angle 1
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Kitchen Angle 2
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Bedroom 1
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Bedroom 2
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Bathroom 1 Angle 1
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Bathroom 1 Angle 2
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Primary Bath Angle 1
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Primary Bath Angle 2
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Primary Closet - Her Side
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Basement w/ Laundry + Bathroom

Hard Costs:

Now let's get into how much this renovation cost us.

Demo: $5,215

  • $5,215 - Initial Demo + Periodic Trash Removal

Kitchen: $24,200

  • $12,000 - Cabinets (Porcelanosa)
  • $5,700 - Countertops (Quartzite)
  • $6,500 - Appliance Package (Bertazzoni)

Flooring: $17,500

  • $17,500 - Prefinished 4" White Oak Engineered Hardwood (Installed)

Bathrooms: $14,000

  • $2,000 - Plumbing
  • $8,000 - Tile
  • $3,000 - Vanities
  • $1,000 - Toilets & Towel Bars

Doors (Int & Ext) & Closets: $8,000

  • $8,000 - Labor & Materials

Trim: $13,300

  • $7,300 - Labor
  • $6,000 - Materials

Paint: $11,000

  • $11,000 - Labor & Materials

Subtotal: $93,215

$93,215 / 2,200 square feet = $42/sf for a cosmetic rehab.

We underwrote $100K in construction costs. A little on the nose for me.

Going forward, I'll be underwriting to $50psf instead of $45psf for finish swaps.

And if you're planning to do a cosmetic rehab of this magnitude, I suggest you underwrite to $60psf, because you're likely not getting our pricing for the same level of materials & labor.

Soft Costs:

💸 We spent quite a bit of money on non-renovation-related line items.

Lender: $41,500

  • $18,000 - Origination Points
  • $23,500 - Interest

Professional & Legal Services: $7,500

  • $1,000 - Inspection
  • $500 - Engineer
  • $1,000 - Legal
  • $5,000 - Insurance (Property & Title)

Taxes: $11,000

  • $1,000 - Property Taxes
  • $10,000 - Transfer Taxes

Utilities: $1,000

  • $1,000 - Gas & Electric

Subtotal: $61,000

Good thing we came in under budget on the rehab because we definitely went way over budget on the soft costs.

Total Cost:

We spent roughly $150K to get this property to the finish line.

To Be Continued:

Once we sell the property, will obviously do a full financial breakdown of the entire project.

🤞🏽 Fingers crossed for a quick sale above ask.