Most fix-and-flip operators price renovation cost the same way they price coffee: in round numbers that feel right. Light rehab is $30,000. Medium is $50,000. Heavy is $80,000. The numbers travel from one underwriting model to the next, decade after decade, regardless of geography or property size.
Round numbers lie. A $30,000 light rehab on an 800 square foot Portsmouth bungalow is one project. The same $30,000 on a 1,600 square foot Virginia Beach two-story is a completely different project. The amount of paint, flooring, cabinets, and labor scales with square footage. The budget should too.
Our three tiers
These tiers are calibrated from completed Hampton Roads projects, not from a national contractor estimating handbook. We back-tested them against the three closed acquisitions in our pipeline and the comps we hold from the wider Norfolk and Chesapeake submarkets. They line up.
How tier assignment works
We do not pick a tier from a feeling. We read the listing description, look at the photos, and assign based on what we see. Then we adjust at inspection.
The signal words matter. Phrases like "needs replumb," "galvanized pipes," "knob and tube," "foundation cracks" trigger heavy tier and often add a contingency on top. Phrases like "good bones," "needs your touch," "plumbing 100 percent" are seller marketing language. They mean the systems are functional, not failing. We do not bump tier from those alone.
Age helps but does not decide. A 1909 house could have been replumbed in 2020. A 1980 house could have original galvanized lines. We use year built only when the listing description gives us nothing else to go on, and even then we lean conservative.
An example: a 1,248 sq ft heavy rehab
1442 E Tanners Creek Drive in Norfolk. Built 1974. Three bedrooms, two baths. Listing photos showed dated kitchen, dated baths, original flooring, and signs of a tired exterior. Description mentioned roof age and HVAC age that put both systems at the back end of their useful lives.
Tier assignment: heavy. Calculation: 1,248 square feet times $45 per square foot equals roughly $56,000 in scope. Add a ten percent contingency at the underwriting stage. Total rehab budget: $61,600.
That budget flows directly into the 70 percent of ARV math. Without calibrated tiers, the same property might have been underwritten at a round $50,000 light tier, or a round $75,000 medium tier, and we would have been six to fifteen thousand dollars off the actual cost. On a deal with a $135,000 spread, that delta is the difference between profitable and breakeven.
The tiers are not static. As we close more projects, the numbers will tighten. If a future Norfolk heavy rehab comes in at $52 per square foot, we will recalibrate. The discipline is the per-square-foot framing, not the specific dollar figure.