Make a list of Pros and Cons.

What does a HCOL mean to you? A teardown is 2M? And the cheapest condo is 1M? What are the neighborhood comps? Are there any new construction homes being built in your zip code? What are they pricing at? Does the house have historic architectural significance? A MCM in a neighborhood of MCM is worth more than many people realize.

400K is peanuts for structural reinforcement of a Eichler in LA. The payback would be many times over for a restoration of such a home as well. NOT a remuddle. Remuddles just lose money and piss off people that value architecture. Pitchforks and tar and feathers for remuddles.

Pictures would help me.

> What does a HCOL mean to you?

Most homes sell for 1.3M -1.5M. There are no recent new builds, but I suspect a new build might sell for 2M.

There are not a ton of MCM in the neighborhood, but it is an older neighborhood with lots of older but beautiful colonials and some MCM houses.

The house does have some unique architecture that we love (it's why we bought the house). If we remodel the home, we are hoping to mostly just restore it to its' original glory as much as we can.

Does it pencil out?

1.2-2.0 is low in Silicon Valley.

An example: you paid $1,000, need $400 foundation, $1,000 remodel.

Location is important.

If in CA, consider fire mitigation and lack of insurance coverage.

I live in a mid century ranch that I did a full gut remodel to five years ago. Spent 500k with me as gc, easy 750+ now. Removed all (really all) the interior walls and two exterior walls, flipped the layout, etc. Kept foundation and roof. Hind site should have torn down (though I love my house). If your house has distinctive architecture that will survive the structural repairs maybe it’s worth restoring. If it’s a new house at the end with no historical features maybe you should build a new house.

Unless you're some sort of architectural groupie, it's strictly a dollar and cents decision.

Which path will leave you with greater equity?

I can point to homes in upscaling neighbourhoods we've lived in where the owners proudly insisted on renovating rather than tearing down. Next owners tore them down.

As a builder/renovator since the '70s, I'd take any engineer's calculations with a shaker of salt! For even the simplest matters on our current build, we ended up with three different engineers with three different recommendations.

Our current "renovation."

Somebody just did this math in our neighborhood with a 27 year old house. They wanted to make a lot of changes to the layout, the house needed updates to meet current hurricane codes, also needed a new tile roof, new kitchen, new bathrooms, new pool, etc. When those numbers came in the builder told them it wouldn't be that much more to just start over. The house got torn down 2 weeks ago! I know what they paid for the old house and what the builder quoted for the new house ... what I don't know, is what the builder had quoted for the remodel. We used to be a lower COL area, but now we are much higher than the prices you mentioned in your area.

Don’t count on it being just 400K. If that was the only expense, and you loved the existing house, then it would be worth it. But you only like ”features” of the house, not the actual house. Sounds like you don’t want to keep most as is. So a teardown will be cheaper to get the house you want, with the features you want.

A home renovation, to borrow from Forest Gump, is like a box of chocolates. You never know what you get until you bite into it. I'll second the notion that the structural work will likely exceed the current estimate once you bite into the home. And the structural work described are, in simple terms, engineering band-aids. They still leave you with an older, remodeled home, just one that isn't falling down for the moment.

When deciding between a remodel or rebuild, I suggest you evaluate how much cost overrun of the planned structural work would drive a decision to tear down and start over: Would it be $100K? $150K? $400K? The smaller the overrun you can tolerate, the more a tear down is a better approach.

Hindsight is always 2020. Most people that choose such an expansive remodel will tell you that they should have just torn it down. Unless there are permit constraints from your city about remodel vs new build, you get better everything in a new build.

A new build is going to require the effort to create a new site-specific current design that meets your needs. A lot more deciding on your part. It'll take time to produce quality.

We thought we'd remodel a ranch 24 years ago, but discovered a sinking addition that the HI had 'somehow missed'. We 'remodeled' in city parlance, saving some new build fees, but tore down all but a chimney and part of the garage. Today, I'm only sorry we didn't dig out the basement and start over from dirt. There was nothing wonderful about that house, originally built on spec.

An all-new house -- not a mix -- has more value from the get-go, and you will love all the superior modern factors built into it.

In many cases it is best to have the comfort of mind that new construction is structurally sound rather than wondering "what did they miss" after the remodeling.