The most expensive number in a flip or BRRRR deal is the rehab estimate you made before you owned the building. Too low and your margin disappears; too high and you lose the deal to someone who guessed better. Most investors reach for a per-square-foot rule of thumb. That's a filter, not an estimate.
The short version
Estimate from the building, not the square footage. List what the property needs system by system, flag the items that swing the budget, decide your finish level from the exit, and add contingency for what you can't see. Then get a real number before your deadline.
Why per-square-foot numbers mislead
Chicago contractors publish gut rehab figures from about $100 to over $300 per square foot. A range that wide can't price your deal. The spread comes from things a square-foot number can't see:
- how many major systems need replacing, not repairing;
- structure, masonry, roof, and porches;
- the number of units, since each unit has its own kitchen, baths, and often its own mechanicals;
- what the city or village will require you to fix, and what needs permits;
- the finish level your exit strategy calls for.
Two 2,400 sq ft buildings on the same block can differ by six figures because one has a newer roof and boilers and the other needs a porch, a tuckpoint, and a full rewire.
The walk-through method
Walk the property with a list, not a feeling. For each item, note keep, repair, or replace.
- The big-ticket systems. Roof, electrical service and wiring, plumbing supply and drains, heating, water heaters. These are the budget swingers. Note age, condition, and whether each unit has its own.
- Structure and envelope. Foundation cracks and water in the basement, masonry and lintels, windows, porches and stairs, gutters and grading.
- Unit by unit. Kitchens, bathrooms, flooring, doors, trim, paint, and appliances, counted per unit.
- Code and safety. Smoke and carbon monoxide detectors, handrails and guards, electrical hazards, egress from bedrooms and basement units. In many south-suburban villages, a point-of-sale inspection will list these for you.
- Permits. Mark every item that needs a permit. Permits add fees and time, and some work needs drawings before it can start.
- What you can't see. Closed walls hide wiring, rot, and old unpermitted work. That's what contingency is for.
Signs that swing the budget
These don't price anything by themselves, but each one is a reason to slow down and get the item looked at before you offer:
| What you see | What it can mean |
|---|---|
| A fuse box instead of breakers, or two-prong outlets throughout | Older wiring; possibly a service upgrade or a rewire |
| Gray, threaded steel water pipes | Galvanized supply lines, often near the end of their life |
| Water stains on ceilings under bathrooms, or a damp basement | A leak or drainage problem you'll open walls to find |
| Cracked or missing mortar, bowed brick, cracked lintels | Masonry work, sometimes structural |
| A sagging, soft, or patched porch | Porch repair or rebuild, usually with a permit |
| Multiple roof layers, curling shingles, stains in the attic | Tear-off and replacement rather than an overlay |
| An old boiler or furnace, or one unit's heat serving another | Mechanical replacement, or separating systems between units |
| Finished basement space with no permit history | Possible unpermitted work you may need to legalize or remove |
Two things that change the numbers
- Lead paint in older buildings. For homes built before 1978, federal rules require lead disclosure at sale, and paint-disturbing renovation must be done by RRP-certified firms. Much of the south suburbs' housing stock predates 1978.
- Property taxes after the rehab. The Cook County Assessor reviews municipal building permits and may inspect and revalue improved property, and 2026 is the south and west suburbs' reassessment year. Model your taxes on the finished property, especially on a rental or a BRRRR.
A worksheet you can copy
| Item | Keep / repair / replace | Permit? | Can't see (range) | Estimate |
|---|---|---|---|---|
| Roof | ||||
| Electrical service and wiring | ||||
| Plumbing supply and drains | ||||
| Heat and water heaters (per unit) | ||||
| Structure, masonry, porches | ||||
| Windows and exterior | ||||
| Kitchens (per unit) | ||||
| Bathrooms (per unit) | ||||
| Flooring, doors, trim, paint | ||||
| Code and safety items | ||||
| Contingency |
Carry anything you can't see as a range, not a single number, until someone has looked behind it.
Let the exit set the finish level
A flip is finished to what buyers in that neighborhood pay for. A rental is finished to survive tenants. A BRRRR has to do both: hold up to tenants and support the appraisal. Decide the exit first, then choose finishes. ARV and rehab budget: why they must work together.
Add contingency on purpose
Contingency isn't padding; it's the price of what you can't see. Older buildings, closed walls, and deferred maintenance deserve more of it. Cosmetic work on a building with recently replaced systems deserves less.
Don't forget holding costs
Every week of rehab adds taxes, insurance, utilities, and loan interest. A rehab that takes twice as long costs more than the construction invoice shows. Build your timeline into the deal, not just your budget.
Get a real number before your deadline
Your walk-through tells you whether the deal is worth pursuing. Before you commit, get a scope from someone who prices the work.
- Still evaluating? Send Mason the address, what you found, and your exit strategy. We'll talk through the likely scope before you make your offer.
- Under contract? Book a scope visit and choose Pre-Acquisition Walkthrough to get an itemized number to negotiate or close with.