Blog
How to Estimate Rehab Costs for Flips (2026)
By Jaken Finance Group · Principal, Jaken Finance Group
How to estimate rehab costs for flips in 2026 — per-sq-ft screens, line-item takeoffs, contingency rules, and worked offer examples for investors.
Most flip losses start as a rehab estimate, not a bad sale. The house that “felt like a $40,000 cosmetic” becomes a $78,000 mid-range once the panel, the galvanized supply, and the second bath stack show up in demo. The estimate is the offer. Get it wrong and the 70% rule cannot save you.
This is the investor method: screen with cost per square foot, price with a room-and-system takeoff, then stress-test the number against ARV, carry, and your draw schedule. It is the same sequence a lender uses when the scope of work hits underwriting.
For finished-room pricing, pair this with average fix-and-flip rehab costs, kitchen remodel cost, and bathroom remodel cost.
Key stats at a glance
- Cosmetic / light: $15–$35 per sq ft
- Mid-range / partial: $50–$100 per sq ft
- Full gut: $100–$200 per sq ft
- Rehab + holding as share of ARV: commonly 20%–33%
- Contingency: 15%–20% of the line-item total
- Kitchen (investor grade): $10,000–$50,000
- Primary bath: $12,000–$35,000
- Secondary bath: $3,000–$15,000
- Roof (asphalt): $5,700–$16,000
- HVAC (furnace + AC): $5,000–$16,000
Step 1 — Screen with cost per square foot
Per-square-foot math exists to kill deals in ten minutes, not to write a contractor check. Pick the scope that matches what you actually saw, not the scope you hope to do.
| Scope | Per sq ft (2026) | 1,200 sq ft | 1,500 sq ft | 2,000 sq ft |
|---|---|---|---|---|
| Cosmetic / light | $15–$35 | $18,000–$42,000 | $22,500–$52,500 | $30,000–$70,000 |
| Mid-range | $50–$100 | $60,000–$120,000 | $75,000–$150,000 | $100,000–$200,000 |
| Full gut | $100–$200 | $120,000–$240,000 | $150,000–$300,000 | $200,000–$400,000 |
Cosmetic means paint, flooring, fixtures, hardware, landscaping, and maybe one kitchen refresh. Systems stay. Mid-range means kitchens and baths updated, some mechanical, roof or HVAC possible, layout mostly unchanged. Full gut means studs, new MEP, roof, and finishes.
If the screen already blows the 70% rule against a honest ARV, stop. Do not “value-engineer” the screen to make the offer work.
Metro adjustment: Chicago and DC labor often runs 10%–25% above these national bands; Indianapolis and similar Midwest markets sit at or below. See Chicago rehab costs, DC rehab costs, and Indianapolis rehab costs.
Step 2 — Walk the house with a takeoff, not a vibe
A walkthrough estimate is a checklist with quantities. Photograph every room, count fixtures, and write units you can bid: linear feet of cabinet, square feet of floor, number of windows, squares of roof.
Room and finish takeoff
| Line | What to count | 2026 investor range |
|---|---|---|
| Kitchen | Scope: paint/reface vs new boxes vs gut | $10,000–$50,000 — full kitchen guide |
| Primary bath | Tub stay vs conversion, tile area | $12,000–$35,000 — bath cost guide |
| Secondary / hall bath | Fixture count, tub vs shower | $3,000–$15,000 |
| Powder / half bath | Vanity, toilet, floor | $2,500–$8,000 |
| Flooring | Living area sq ft, not house sq ft | See flooring cost per sq ft |
| Interior paint | Wall sq ft + trim + ceilings | $2–$6 per sq ft painted |
| Exterior paint / siding | Elevation complexity | $3,000–$18,000 |
| Windows | Count + egress bedrooms | $300–$1,200 installed each |
System takeoff — the budget killers
| System | Walkthrough tell | Typical replace cost |
|---|---|---|
| Roof | Age, layers, sag, staining in attic | $5,700–$16,000 asphalt |
| HVAC | Age on data plate, no AC, cracked heat exchanger | $5,000–$16,000 |
| Electrical panel | Fuse box, 60-amp, Federal Pacific, aluminum | $1,500–$6,000+ |
| Plumbing | Galvanized supply, polybutylene, low pressure | $4,000–$20,000+ |
| Sewer | Scope it. Always. | $150–$400 scope; $4,000–$15,000+ replace |
| Foundation | Stair-step cracks, sticking doors, wet crawl | $2,000–$25,000+ |
| Windows / insulation | Single pane, failed seals, no attic insulation | Highly variable |
Sewer scope before you go hard on any house built before 1980, any house with a basement or crawl, and any deal priced like there is a plumbing surprise. A $300 camera inspection is the cheapest insurance on the takeoff.
Step 3 — Build the line-item, then add contingency
Roll the takeoff into the same structure a lender wants on a scope of work.
| Category | Example 1,400 sq ft mid-range |
|---|---|
| Demo + haul | $3,200 |
| Kitchen | $18,500 |
| Baths (1.5) | $16,000 |
| Flooring | $7,400 |
| Paint (in + out) | $6,800 |
| Electrical (panel + devices) | $4,200 |
| Plumbing repairs | $3,600 |
| HVAC service / parts | $1,800 |
| Roof (asphalt, 22 squares) | $9,400 |
| Windows (4 failed) | $3,200 |
| Curb / landscape | $2,400 |
| Permits + dumpsters | $2,100 |
| Subtotal | $78,600 |
| Contingency 15% | $11,790 |
| Rehab budget | $90,390 |
That $90,390 is the number that goes into the offer formula — not the $78,600. Flippers who skip contingency are the ones asking for extensions in month five.
When to use 15% vs 20%
- 15%: occupied or vacant house you walked fully, systems dated but functioning, roof and sewer scoped clean
- 20%: pre-1978, auction or as-is with limited access, any “maybe we open the walls” file, knob-and-tube or galvanized visible
- More than 20%: foundation movement, fire/flood, or a layout change you have not priced with a plumber
Step 4 — Tie the estimate to the offer
Rehab is not a standalone number. It only matters against ARV and holding costs.
Worked screen, $285,000 ARV, $90,390 rehab:
| Formula | Result |
|---|---|
| 70% of ARV | $199,500 |
| Minus rehab | $109,110 |
| Minus estimated holding (see holding-cost guide) | subtract another $8,000–$14,000 if you bake carry into MAO |
| Max offer (rehab only) | $109,110 |
If the seller wants $140,000, the deal does not work at this rehab — unless ARV is wrong high or the takeoff is wrong high. Recheck both. Do not split the difference in your head.
Run the full file in the fix-and-flip calculator.
Rental vs flip estimates (do not mix the spec)
The same house can be a $38,000 rental turn or an $90,000 flip. Mixing those numbers is how BRRRR files miss the refinance.
| Item | Rental / BRRRR | Flip resale |
|---|---|---|
| Kitchen | Paint, laminate or entry quartz | Quartz, photo-ready backsplash |
| Baths | Clean, durable, tub stays if it works | Match comps; conversion only if comps demand it |
| Flooring | LVP throughout | LVP plus tile wet areas |
| Systems | Repair to safe and rentable | Replace if the buyer appraisal will flag it |
| Curb | Mow, mulch, house numbers | First-photo quality |
Price the exit you actually intend. A rental estimate on a flip leaves you at the showing with a tenant-grade kitchen. A flip estimate on a rental donates margin the rent will not return.
The ten-minute due-diligence extras
These are not “nice to have.” They change the estimate:
- Pull permit history — unpermitted additions and kitchen guts become your problem at resale
- Age the roof and HVAC from public records or data plates — do not guess from the yard
- Count windows from the exterior photos before the showing so the walk is a check, not a discovery
- Ask about sewer material and last service — then still scope it
- Note ceiling stains and soft floors — water is never “just paint”
- Photograph the panel door open — amperage and brand decide a $4,000 line
- Walk the lot grade — water toward the foundation is a landscaping and drainage line, not curb appeal
Common estimating mistakes
- Using homeowner remodel averages — those include designer kitchens and 12-week timelines
- Pricing the kitchen and forgetting the second bath — baths stack
- Per-square-foot on the tax-record size — finished basement and garage are not the same dollars as living area
- No dumpster, permit, or appliance line — they are real invoices
- Assuming “HVAC works” from winter heat — AC is a different machine
- Skipping the sewer scope to save $300
- Writing the offer on the contractor’s verbal — get the same written scope from two trades
- Forgetting carry — a four-week cabinet delay is holding cost, not a rehab line, and it still comes out of profit
How lenders read your estimate
On a fix-and-flip loan, underwriting compares purchase + rehab to ARV and loan-to-cost. A lump-sum “rehab $75,000” gets questioned. A takeoff with quantities, unit costs, and a 15% contingency gets a draw schedule.
Keep kitchen and bath inside the same cabinet/finish draw when you can. Special-order slabs and cabinets are the usual critical-path delays — confirm stock before you lock the estimate you used in the offer.
Tariff note: steel, appliances, and imported cabinets moved in 2025–2026. Refresh any unit-cost sheet older than six months against the tariffs and rehab costs guide.
Related guides
- 70% rule and maximum allowable offer
- How to calculate ARV
- Fix-and-flip holding costs
- Average fix-and-flip rehab costs
- Scope of work templates
- Kitchen remodel cost
- Bathroom remodel cost
Jaken Finance Group funds rehab through fix-and-flip loans with draw schedules tied to a line-item scope. Model the deal in the fix-and-flip calculator.
Rates, terms and conditions offered only to qualified borrowers and are subject to change at any time without notice. All loans are subject to full underwriting for loan approvals. Jaken Finance Group only finances non-owner occupied investment properties.
How to Estimate Rehab Costs — next step (2026)
Screen with cost per square foot, price with a takeoff, then put the contingent number into the offer — not the hopeful one.
Submit scenario · Pre-qualify · (833) 264-7776.