House #2: Purchase/Rehab Costs

September 16, 2008 · 3 comments

Now that The Bulge House is officially on the market, I decided to do my final accounting to determine how much I’ve spent to both purchase and rehab this property (which I can then use to model my profit based on my holding and selling costs). While I didn’t define a formal budget for this rehab (because I originally planned to rent this one), I have considered rehab numbers between $24K and $25K.

Now, had I actually done all the work I was planning to do prior to putting this one on the market, I likely would have spent almost that much. But given the last minute change of plans (trying to sell instead of rent), we decided not to do as much updating of the kitchens and bathrooms as we had originally planned.

All that said, here are the final purchase and rehab costs spent on The Bulge House:

Final Cost Tally

My total purchase plus rehab costs on this project are just under $82K, and based on the outcome of the property, I’m quite pleased. I don’t think I’ll be able to sell this one quickly, so I’m expecting to have to pay holding costs on this property for at least a couple months (if I sell to an FHA buyer, I’ll need to put off closing for another 8 weeks — more on that in a later post). Given my $530/month mortgage and escrow payment, and another $150-200 per month in utilities, that’s another $3000 in holding costs. So, assuming I sell this one around the end of the year, my all-in cost will be on the order of $85K.

I’ll go into more detail on my likely profit in another post, but all-in-all, I should make some money on this one…it’s in my agent’s hands now…

Btw, it’s also worth noting that the total rehab time from closing to relisting was only three and a half weeks, so I’m quite pleased with that as well!

3 responses to “House #2: Purchase/Rehab Costs”

  1. Andres says:

    I am truly grateful for your posting of all these details.

    Have you reviewed where and how you could cut the time and/or save some costs for the next projects? (I know I am probably asking about this a little too early). for example, what could you have done that would have cut the total rehab time to 2.5 weeks?

    I guess disecting the details now that you are done would be a great way to have a lessons learned session.

  2. Sonya says:

    Wow! That is great! I’m excited for you – (and a little proud) that things are going so well for you. Now for the fun part…. how long will it take to sell? Are you getting feedback that there are buyers in your area?

  3. J Scott says:

    Andres –

    Great question and great idea…I’m going to post about “Lessons Learned” this week…it’s something I’ve been thinking about, so it’s probably best to get it down on paper anyway…

    Sonya –

    Thanks! You’ve been a great inspiration, and I appreciate all your support. As for selling, see my next post… 😉

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