Analyzing an off market Mulit-Family BURRR with NDA
So I have found a multi-family property in Southwest Ohio that is in a fantastic location and is a complete gut. In fact, the building is condemned. The owner has had the building for 30+ years and knows the value of the location and wants top dollar for what is essentially a shell. Admittedly I really want to do this project, but I know it needs to be a good business decision. I need to sharpen my pencil and determine real rehab costs to determine a final ARV and essentially figure out a realistic purchase price.
Property Description:
- 4 Level Apartment Building built in 1900 or thereabouts
- The building is vacant and has been vandalized so it will remain that way until someone rehabs the building.
- 10000 sq. ft. total, or 2500 per level.
- Load bearing masonry (brick) with wood framing with a stone foundation
-10 ft. ceilings, plaster and lath
- It will need all new plumbing, mechanical, HVAC, etc... a full rehab.
- I am thinking of 8 total units, 2 per floor.
My topics for discussion:
I don't want to let people know which property it is because it's a hot area and people could potentially slide in and steal the deal (it is an off-market deal). I spoke to a demo contractor and they estimated that demolition of the interior could be anywhere from $60k-$100k and could be as much as $200k if there are environmental issues (Asbestos) which there assuredly are. That's quite a swing one way or another.
I think I can conservatively get $16,500 in rent but I have estimated $1,200,000 in rehab costs and I fear that may not be enough.
-What is the best way to proceed by estimating realistic repair costs if I can't get people in?
- Once I have figured out a realistic repair cost then I can assess the ARV, and determine a realistic offer price.
Thanks for you help!
Below is my rough rehab analysis that I threw together.
My initial rough estimates - 8 total Units (2 per floor)
|
Work Item |
Quantity |
Unit per Level |
# Levels |
Unit Cost |
Total |
|
|
Exterior Painting |
238 |
sq. ft. |
50 |
2.25 |
$26,775.00 |
|
|
Exterior masonry repairs |
1 |
sq. ft. |
1 |
25000 |
$25,000.00 |
|
|
New Roof |
2500 |
sq. ft. |
1 |
8 |
$20,000.00 |
|
|
Structural Stabilization |
1 |
1 |
50000 |
$50,000.00 |
||
|
Flooring |
10000 |
sq. ft. |
1 |
9 |
$90,000.00 |
|
|
Demolition |
1 |
sq. ft. |
1 |
1 |
$150,000.00 |
|
|
Drywall |
7500 |
sq. ft. |
4 |
1.75 |
$52,500.00 |
|
|
Kitchens |
1 |
Each |
8 |
25000 |
$200,000.00 |
|
|
Bathrooms |
1.5 |
Each |
8 |
15000 |
$180,000.00 |
|
|
Doors and Trim |
10000 |
sq. ft. |
1 |
15 |
$150,000.00 |
|
|
Plumbing |
1 |
1 |
60000 |
$60,000.00 |
||
|
HVAC |
1 |
1 |
75000 |
$75,000.00 |
||
|
Electric |
1 |
1 |
80000 |
$80,000.00 |
||
|
Interior Painting |
1 |
1 |
50000 |
$50,000.00 |
||
|
$1,209,275.00 |