Understanding Rehab Cost Tiers
Light rehab ($15–25/sq ft): cosmetic work only—paint, flooring, fixtures, and cleaning. The structure, mechanical systems, and roof stay untouched. Medium rehab ($25–45/sq ft): kitchen and bath updates, some flooring replacement, minor electrical or plumbing work. Heavy rehab ($45–75/sq ft): full kitchen and bath gut, HVAC replacement, partial rewire. Gut rehab ($75–120/sq ft): strip to studs, new everything.
The 15% Contingency Rule
Experienced investors budget 10–20% above their line-item total for surprises: hidden mold, outdated knob-and-tube wiring, failing drain lines, or permit delays. A 15% contingency on a $60,000 scope is $9,000—money that rarely goes unspent on older properties. Skipping the contingency is the most common cause of fix-and-flip cost overruns.
Estimating vs. Contractor Bids
These estimates use national averages. Regional labor markets vary significantly: contractor rates in Manhattan can be 2–3× those in rural Tennessee. Treat this tool as a feasibility screen before you walk a property; get at least three contractor bids before committing to any acquisition.