Getting ready to pull the trigger....questions....

12 Replies

I've been looking at multifamily homes for the past few weeks with my realtor. I have found one that peaks my interest. The location is good, rent is solid and price is decent. My next step would be to make an offer and get the inspection done, but there are some issues I'm concerned with and would like some opinions. 

-It's an older home (early 1900s). It has a 60amp fuse box! Other than "A Christmas Story", I haven't seen a fuse box since I was a kid. The home is a licensed rental and has been operating like this for some time. Is this something I should be concerned with?

-The home has asbestos siding. It's in decent shape and is not cracking or falling off. Should I be worried about the future costs of residing the home? I believe I can just apply vinyl siding over top of the asbestos without the ordeal of removing it.

Thanks in advance to the BP community!

@David Alter

I, myself would not worry about the siding so long as it is in decent shape, the electrical is def. a turn off.  I can't remember if my insurance company asks about such thing but he may.  The 60 amp service should have a negative impact on the value of the home.  

The 60 amp fuse box could be an annoyance to a tenant and I would replace it.  It is fairly easy to do and a newer box is only about $100 or so.  I would remove your electric meter before you do it so there is no chance of getting shocked.  I would probably put 100 or 150 amp panel in depending on the size of the service wire coming in or you could upgrade service wire too but that will probably require a permit.  You can go over the existing siding in the future with vinyl for pretty cheap. Siding costs about $100 a box and a box covers about 200 square feet. The asbestos will tend to crack when you nail siding over it and some people like to put half inch foam board over it first.

Thanks for the reassurance guys! looking into it, the internet estimates seem pretty reasonable on changing out the electrical service. I guess I can send in the inspector and use these things as barging chips in the offer.

Originally posted by @David Alter :

I've been looking at multifamily homes for the past few weeks with my realtor. I have found one that peaks my interest. The location is good, rent is solid and price is decent. My next step would be to make an offer and get the inspection done, but there are some issues I'm concerned with and would like some opinions. 

-It's an older home (early 1900s). It has a 60amp fuse box! Other than "A Christmas Story", I haven't seen a fuse box since I was a kid. The home is a licensed rental and has been operating like this for some time. Is this something I should be concerned with?

-The home has asbestos siding. It's in decent shape and is not cracking or falling off. Should I be worried about the future costs of residing the home? I believe I can just apply vinyl siding over top of the asbestos without the ordeal of removing it.

Thanks in advance to the BP community!

Hello David,

Great question!. In therms of the siding you could probably hold off on it, as long as it looks good. Make sure to keep it in mind though for the future. You never know what might happen to it.

In regards to the electric. I would update that ASAP. It sounds pretty outdated and the last thing you want is an electrical fire, or some other disaster waiting to happen. It might be a costly update, but it is something you will need to do. 

Get a quote and find out if it is even worth updating. (kind of like the idea of fixing up an old beater car) At some price you will have to say enough is enough.

I hope this helped. Please let me know if you have any questions.

@David Alter The 60 Amp fuse box will be an issue for almost every insurance carrier in the market.  Their are stating that the electrical usage for modern day renters, with all of their electronics, TVs, etc., surpasses the ability of a fuse system.  All of this ending in an electrical fire.

2 years ago you could insure a property on the agreement that you would upgrade with in the next 12 months.  Lately, I have not seen any insurance carrier issue a new policy with the fuses.

I would do the following as part of your due diligence,

1)  Get an insurance quote in full disclosure of the fuses.  You can use this increased cost to negotiate with the seller.  The seller most likely has a grandfathered insurance policy that allows the fuses at a discounted rate you can no longer get.

2)  Get an insurance quote based on the upgraded system so you can run some up to date #'s on the property.

We are the proud owners of a run down family property, which was quit claimed to us. Only 12,000 is owed on it. it will be about 40 to get it into any kind of living condition.  Needs pretty much everything done. We have been contractors for 28 years but got out of doing building and remodeling about 15 yers ago. We do have a crew still, doing specialty windows and door for older homes. 

We were wondering what would be the best finance option, since the banks seem to be out of the picture for a mortgage.  Got any ideas?

That was also one of my concerns @jason bott . My wives cousin is our insurance agent so ill run this all past her. Awesome info from all of you! It's very appreciated!

I believe in to upgrade your service from the 60 amp to the standard 200 amp panel you need a permit and the job will cost you more than 100 dollars. Much more. Get with an electrician first. At least contact code enforcement or look it up in the Internet before making assumptions.

agreed @sean gover . The ballparks i found online were $800 - $1500 if no major rewiring of the house is needed. At this point I'm going to bring in an inspector and an electrician and negotiate it into the offer.

Originally posted by @David Alter :

agreed @sean gover . The ballparks i found online were $800 - $1500 if no major rewiring of the house is needed. At this point I'm going to bring in an inspector and an electrician and negotiate it into the offer.

That sounds awesome David! I hope it works out in your favor. Let us know what happens

Happy investing!

The electric is an issue. The chances are the wire is cloth covered and the gauge of the wire is not sufficient to handle a hair dryer and a toaster at the same time.

As for the siding check your municipal code. I use to be a siding contractor in Chicago with a large company. They stop siding asbestos houses when the EPA came out with more stringent laws. We either had to enshroud the house in plastic while working or don't do the job.