What is a Heavy Rehab?
A heavy rehab is an extensive renovation that involves replacing one or more major building systems -- roof, HVAC, plumbing, electrical, or foundation repair -- plus comprehensive cosmetic updates. Heavy rehabs fall between light rehab and full gut rehab in scope. Typical budget: $50,000-$100,000+ with timelines of 8-16 weeks.
Typical heavy rehab scope
All light rehab items plus: full roof replacement ($8,000-$15,000), complete HVAC replacement ($8,000-$20,000), electrical rewiring ($10,000-$25,000), significant plumbing replacement ($8,000-$20,000), foundation repair ($5,000-$30,000), full kitchen renovation ($15,000-$35,000), and structural repairs ($5,000-$15,000).
Project management
Heavy rehabs require experienced general contractors who can coordinate multiple trades. Draw schedules (staged payments based on completion milestones) are essential. A typical schedule: 10% at signing, 25% at rough-in, 25% at drywall, 25% at substantial completion, 15% at final walkthrough.
Financing
Hard money lenders commonly finance heavy rehabs with draw-based rehab components. The lender holds renovation funds in escrow and releases them as work is completed and inspected. Budget 4-6 months of holding costs when analyzing heavy rehab deals -- delays are common due to permit processing, inspections, and renovation surprises.
Risk management
Heavy rehabs carry significant renovation risk. Hidden structural damage, environmental hazards, and scope changes are common once demolition begins. Budget a 15-25% contingency above estimated costs and build timeline buffer into your project plan. The higher cost and longer timeline increase holding costs, so a deal that looks profitable at 3 months may become marginal at 6 months if delays occur.