G'morning to everyone except our waitress from date night.
You did NOT have to share your sexcapades with us. 🤦🏽♂️
Livin' La Vida Luna y Luca
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.
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):
Now let's get into how much this renovation cost us.
- $5,215 - Initial Demo + Periodic Trash Removal
- $12,000 - Cabinets (Porcelanosa)
- $5,700 - Countertops (Quartzite)
- $6,500 - Appliance Package (Bertazzoni)
- $17,500 - Prefinished 4" White Oak Engineered Hardwood (Installed)
- $2,000 - Plumbing
- $8,000 - Tile
- $3,000 - Vanities
- $1,000 - Toilets & Towel Bars
Doors (Int & Ext) & Closets: $8,000
- $8,000 - Labor & Materials
- $7,300 - Labor
- $6,000 - Materials
- $11,000 - Labor & Materials
$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.
💸 We spent quite a bit of money on non-renovation-related line items.
- $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)
- $1,000 - Property Taxes
- $10,000 - Transfer Taxes
- $1,000 - Gas & Electric
Good thing we came in under budget on the rehab because we definitely went way over budget on the soft costs.
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.