Ugliest Multi-Family ever?

20 Replies

My husband and I are soon to be the proud owners of the ugliest multi-family property ever! It is an 8 plex. We own another 6 plex in the area that is in much better shape. The rental market is strong and we know we can make improvements to increase the value and the rents. We paid $50,000 for this property.  


We are planning on putting 30-40k into it. Our plan is to rehab the units as tenants move out. The kitchens and baths all need to be redone.  Five of the units are currently rented at $400-450. One unit is gutted and needs to be completely rebuilt. They are small ~520 square feet 2/1 units.

I need some ideas for adding curb appeal. I was thinking about having it painted a tan color with white trim and painting the doors black or red. My other thought was adding shutters or a simple wood trim around the windows.  One dilemma is that on the backside of the building there are windows that are irregular... there is no symmetry.  Thought about putting up a fence so the tenants can have a backyard space.  We also need to come up with some landscape ideas.  This is a high desert and most people have grass. We do not want the upkeep and expense of grass.  

Thanks in advance... any ideas will help… if you have an uglier property I would like to see it! 

I don't have any informational input unfortunately I'm very new myself but I was recently looking at a 8 plex near my area but decided not to stick with it due to the location and how it looked. How is the location around your property? Seems fun and I'm excited to see the changes you guys will make. Goodluck to you!

That is pretty ugly! 

Here's an idea for paint: street view (I hope that works) They painted each unit a different shade, I think it's great. Before it was all the same beige brick color.  I also like red doors, don't know why, but I think it's nice. I'm not sure I'd paint anything black in Arizona...seems like a fire hazard.

The fence is a good idea, give people a little semi-private outdoor spaces.  I'd want trees, or some kind of shade and little patio areas?  I'm having flashbacks of living in Las Cruces, my yard was gravel with yucca, cholla and prickly pear...definitely skip the grass. 

@Theresa Sanford

I have had great success of what you already mentioned which is painting the exterior.   Personally my opinion to add a sharp, crisp curb appeal would be to paint the exterior a tan color, white trim, white doors with black shutters for the windows.  I can't see much from the photos, but those window unit air conditioners don't help the building. Not sure if you could replace those with smaller, more efficient window units that would take away from the bulkiness of the existing units.

As far as waiting for the tenants to move out before renovating I'd suggest the opposite.  I would go in and rehab all the vacant units and see what the increase in rent is. If people are paying $400-$450 for non-updated units with a neglected exterior building, what are the market rents for a similar updated and well taken care of property?  If those units rent for say $550 average, then after renovating and renting out the vacant units, I would renovate all the rented units as well and increase the rents. That is if leases are not in place preventing that.  If they choose to move out, then rent the freshly renovated unit for the new higher rent.  That is just my opinion though.  For not wanting grass, I have seen a few properties in similar areas with the "yard" being different types of stone/decorative rock with minimal landscaping throughout. Not sure if that could work for you or not.  I would pressure wash all the concrete sidewalks & walkways.

I recently bought a duplex where one side was paying $450 and the other unit was vacant.  Within a few weeks I had the other side renovated and rented for $550. I told the inherited tenant that came with the building I was going to be redoing their unit and increasing the rent to $550 or if they did not want the full renovation I'd do a few updates/upgrades and rent would increase to $500 (they had no lease in place).  So I kind of gave them an option to choose which they wanted.  They ended up moving out literally over night ha.  I rehabbed that side and increased the rent to $575 for that unit. 

Hope that helps some!

Justin

I might suggest you take 3 distinct earth tone colors for the exterior to define each unit better and I would also add a back fence plus a fence to separate the units as well to lend more privacy. Then I would consider laying down turf not grass along with a tree here and there to provide shade and comfort. That would be it for the outside and landscaping unless you want to exercise more creativity but I would concentrate making improvements to the interior quality of the units small as they are. 

Look like an impound prison or roach motel.

A lot of potential :)

Congrats 

Jenkins Ramon, JMWPS Ventures, LLC | [email protected]

It is ugly, but it is also a pretty common design for Phoenix. I don't even have to guess where it is probably located. Nevertheless, that was a great price, even for a warzone. 

[email protected] | 402‑965‑1853

It does look like a prison block, that's for sure! I think your ideas for improvements are all good.I wouldn't worry about shutters on the back- just do the front. Some brightly colored benches by the front doors would look good, but might not be the best choice if it's a low rent neighborhood-- you'd have to decide if you think they would stay put or "disappear." 

If you created patio spaces in the back with dividers you could do a low cost "paving" solution by having crusher fines brought in from a landscaping company and compacted. 

I would use desert grasses to  landscape, like mexican feather grass (Nassella or Stipa tenuissima), and  plant a few New Mexico Privet trees for height if you can find a spot. Those will require a little attention for the first year or so but after that they'd probably do OK on their own in your climate. 

Medium team zen logo vJean Bolger, 33 Zen Lane | http://www.solidrealestateadvice.com

@Jean Bolger and @Jenkins Ramon and I thought it looked like a prison block too... all it needs are bars on the windows.  

@Anthony Gayden  It is actually in Winslow... not quite a warzone but not the greatest neighborhood either.   We also have a 6 plex in Winslow.  So far it has been a great market for rentals.  We could not afford anything in the valley unless it was in a warzone...not my thing!  

Thanks everyone for the great ideas!  We are looking forward to getting started.  I am going to try to remember to take before/after pics to share with everyone.  We hope to put the bulk of the money into the interior renovations.  

Sounds like a great opportunity to add value. As for the exterior and especially the window line. You might consider adding a small flower planter to the bottom of the windows if you can also figure out how to get a water line to them from your irrigation system. In addition, you could add small canopy's to the top of the windows for aesthetics and also as a sun block.

Through both you will get alignment of the windows, some vegetation or color from the flower beds, and added aesthetics for a relatively cost efficient price.

I agree with @Gilbert that earth tones might work really well with this very low rise complex particularly since you're wanting to avoid installing grass.

Sorry I'm fairly new and have made no RE deals, so I can't suggests what to do for the exterior, however I think you got a great deal and the building has amazing potential.

Good job!!👍

Hi Theresa - 

You're looking for curb appeal on what's apparently a nuclear test site barracks - not an easy task. Everyone here at BP salutes your fortitude.

I would contact some folks in the State Department, ask them who they use for urban planning and bomb site reconstruction. They may be able to help.

Seriously, I would look at what they did at the old Alameda base here in the Bay Area. Sometimes it takes renovating an entire area, but the result can be pretty nice. Or drive through (on google earth) areas like Treasure Island, Fort Mason, etc. Any redeveloped military areas - sometimes they turn out pretty well. Best of luck!

Oooh, how I love UGLY!!!

We bought an ugly 8plex 7 years ago, and making it pretty paid for another property, and gave us a 60% ROI. Congrats on buying UGLY! I hope it does as well for you as it did for us! I don't know what kind of Market Cap Rate you have in this area, but your upside seems huge.

As for your question, I'm not very good with color but I agree with everyone else, it needs some. I have a friend who used to be an interior designer, and always call on her for that. I'm not a fan of the shutter idea though, I think it would make the facade(s) to busy. I always like nice trim (I was/am a finish carpenter by trade) and it occurs to me the structure as is would lend itself well to the "Prairie style" architecture (circa 1900) popularized by Frank Lloyd Wright an his contemporaries. Check it out and see if you agree. Maybe some wide trim around the windows with a simple cornice and sill/apron? Some shade structure over the front entries to get vehicles away from the front doors (looks more Motel than residence) and create more of a porch/personal area for your tenants?

And grass in AZ? That would be crazy. I love No-maintenance landscaping just like everyone above.

Just some thoughts from a color challenged, ugly loving, construction type in AK. (just in front of AZ on any pull down menu)

Scott Sewell, Anchorage Rental LLC

@Scott Sewell I hope we see those numbers! I have calculated an ROI of 15.5% with $40K in renovations. Here are the numbers on it... with a purchase price of $50K and 40K in renovations. Thanks for congratulating me on UGLY... I was having second thoughts! There are 8 units but 1 needs a complete rehab so I am using conservative numbers.

This is our first experience doing a 1031 exchange. In 2010 we bought a SFR that we would never have bought if we knew what we know now (Thanks Bigger pockets!). We sold it to buy some "Ugly" properties that would cash flow!

PS I have friends in AZ that are from AK... they spend winters here!  Our winters are pretty amazing!  

8 plex
Price 90000
Down 90000
Balance 0
 
Rent/Unit 425
Units 7
Total Rent 2975
 
Taxes 80
Insurance 170
Utilities 700
Management (10%) 267.75
Vacancy (10%) 297.5
Maintenance (5%) 148.75
Capital (5%) 148.75
Payment 0
Total 1812.75
 
Cash Flow 1162.25
 
Cash Flow/$1k 12.91389
Capitalization Rate 0.154967
ROI 0.154967
 
 

Ha ha thanks for the laughs!!!  

Originally posted by @Doug M. :

Hi Theresa - 

You're looking for curb appeal on what's apparently a nuclear test site barracks - not an easy task. Everyone here at BP salutes your fortitude.

I would contact some folks in the State Department, ask them who they use for urban planning and bomb site reconstruction. They may be able to help.

Seriously, I would look at what they did at the old Alameda base here in the Bay Area. Sometimes it takes renovating an entire area, but the result can be pretty nice. Or drive through (on google earth) areas like Treasure Island, Fort Mason, etc. Any redeveloped military areas - sometimes they turn out pretty well. Best of luck!

I think it would be nice to add some colorful awnings for the windows! They would add color and function. Lots of rocks some boulders and a few drought resistant plants, and maybe a bit of fake grass here and there.

Congratulations on your purchase I look forward to the after pics!!!

Originally posted by @Theresa Sanford :

@Jean Bolger and @Jenkins Ramon and I thought it looked like a prison block too... all it needs are bars on the windows.  

@Anthony G.  It is actually in Winslow... not quite a warzone but not the greatest neighborhood either.   We also have a 6 plex in Winslow.  So far it has been a great market for rentals.  We could not afford anything in the valley unless it was in a warzone...not my thing!  

Thanks everyone for the great ideas!  We are looking forward to getting started.  I am going to try to remember to take before/after pics to share with everyone.  We hope to put the bulk of the money into the interior renovations.  

 I agree with you, the prices are pretty high right now and seeing as how I love cash flow, there are few deals. That's why I am buying in Tucson instead of Phoenix. The one that I own in Phoenix may be my only one for a while with prices so high. 

[email protected] | 402‑965‑1853

maybe it's not popular there but if you wanted to spend more then just paint i would really consider adding fake (maybe it's real?) Stone half way up the wall and some artificial grass

Originally posted by @Byron Bohlsen :

maybe it's not popular there but if you wanted to spend more then just paint i would really consider adding fake (maybe it's real?) Stone half way up the wall and some artificial grass

 I like the look of this. Stone on bottom and tan shade stucco on top...

http://s105.photobucket.com/user/cbrob_2006/media/...

Rocks and a few mesquites and cactus and you're the best looking on the block. Dont blow your budget on the exterior though if the insides need work. In my opinion, interior renovations would help with retention more than exterior. Definitely post after pics!  

@Byron Bohlsen  I had thought about doing the stone veneers,  I think it would look really nice...not sure about the cost and durability of it though.  Has anyone else had experience with this?  I do not want to spend the money if tenants are just going to destroy it.  Would rather put the money into improving the interiors.  

@Theresa Sanford  

Yep. There's a lot of Alaskan snowbirds in AZ. Hoping to become one soon.

I don't see why you can't achieve the higher ROI down the road. We only got those numbers once we rehabbed 7 of 8 units and refi'd out to buy another property.

When I was talking about "Market cap rate" I meant the cap rate your appraiser used to value the property. IMO this is the one that counts, as it gives you an idea of what the property's potential value/ROI is. This really helps in deciding where/how to invest in the property.

BuyingUgly4ever!

Scott Sewell, Anchorage Rental LLC

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