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Posted almost 8 years ago

BIG RENOVATIONS-What does it cost?

Lets talk about the industry standard on pricing for multifamily renovations 100+ units. If you want to add value to your established complex or build a game plan to purchase and flip a commercial property I know I can bring some light to that process. 

We have done it all excluding landscaping. Roofing, exterior make overs, office renovations, gym build outs, make ready turn key apartments flips---(50-100 units a month)

I see property owners/managers every day blowing more money than budgeted because they are trying to re-invent the wheel. 

Lets focus on flipping interior units at a large apartment complex-  What should you budget? (realistic numbers)

In my experience you have 2 options when it comes to flipping units...You can call a reputable sub "one stop shop company" or try to handle the turns in house. Both methods have pros and cons.

Using a contractor- By subbing it out you look to spend a bit more money but allow your existing staff to focus on leasing, maintenance and resident satisfaction. A solid contractor with  make ready experienced crews should have no problem turning 15-20 units a month with a 5-6 man crew. 

whats included in that turn???- Paint, drywall repairs, texture, trim, doors, light fixtures, sink faucets, appliances, new counters installation (or resurfacing), flooring, base boards and a good cleaning. 

whats the cost? Industry standard on a flip can run anywhere from $5000 to $9000 per unit (including materials). It really depends on the materials going in. 

-Are you using granite counter-tops or formica?

-Flooring-is it carpet? Laminate? Tile? 

-Appliances-can you save existing? can you sell existing? (Big bulk gets solid bucks) Are you using entry level black or white? are you using stainless? 


Know your existing demographic and the demographic you are shooting for..know your neighbors?

Going in-house-make ready and paint-Lets say you want to save some money-The most important thing to remember when going in-house is organization. 

Have 1 guy in charge of walking units upon a tenants departure and that same person orders the make ready supplies...Get the supplies to the units..digging through a storage container or a room full of unlabeled boxes will cost big money on even 10 units a month***THIS CAN KILL YOUR BUDGET***

Missing items, making multiple trips to units, upset new residents, frustrated installation guys---all equal money. Order extras! Suppliers will most likely leave off or forget at least one item per make ready package. HD Supply, Maintenance supply, Lowes ect...

Having a current make ready board is critical. Knowing whats coming up and whats moving in. 

Train your staff well on make ready installation- a full make ready including lights, appliances, door knobs, faucets, toilette's should take two well trained $15 guys 5-6 hours (roughly $250) . Or you can pay a contractor as much as $1500 just for labor.  

Paint should take a well trained guy with a sprayer about 4 hours for a 1 bedroom unit with a simple color scheme(doors, trim and walls). Or you can pay a contractor $250-$300

In closing in my opinion going in-house is definitely the way to go. On average I would say you can save $1000-$2000 a unit by using your own crews in labor cost. That money can be rolled back elsewhere or not... Some property managers would rather save the head ache and hire contractors like myself and thats ok with me as well

I hope this helps a few on adding value to multifamily properties...This is my first blog..feedback is welcome

Thank you,

Aron


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