Advice Needed for Rehab for Duplex/Triplex/Quadruplex
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AJ WongBusiness Member
Real Estate Broker · Oregon & California Coast · Member since 2022 · 822 posts · 695 votesHI Bob. A quality local RE Broker/Agent in tandem with a reliable contractors should be able to help you with full analysis of post rehab value. The more detailed estimates prior and during contingency, the more accurate the assessment. You can't generally create a contingency on the proposed value, but you will likely have an appraisal contingency that it must appraise for the purchase price. Be careful with properties that need too much rehab and won't finance, a strategic lending parter can be helpful there. I'm no longer active in Ft Lauderdale but grew up there and have an extensive network. In fact my friend has an off market Triplex in Pompano and another north Ft Lauderdale he has considered selling. They are active AirBnB's. Check in with @Joseph Chiofalo he's a local strategic lender and licensed RE Broker that supports investors. He can give you some general financing guidelines that can refine your search and forward some listings for reference. DM me for the off market deals... Good luck!
Sesemi | STR Brokers powered by Fathom Realty 516 Reviews
8 Replies
- Investor · Palm Beach County, FL · Member since 2019 · 370 posts · 330 votes2y
Quote from @Bob Asad:
I have a few questions regarding wanted to buy a full duplex or triplex.
I would be using a HELOC on primary residence to get the 20% down payment + costs required to fix.
1. What is it called (form or process) to have the duplex/triplex be contingent based on the amount it will cost to fully renovate/rehab? (In other words, if it's too high, then I can cancel the buy and not have to lose any money)
2. Who do I need to hire during the process in Step 1? (is it just an inspector and that's it? What's the name of the position or person who can tell me exactly a price range for what areas of the duplex/triplex need to be fixed and how much they cost?)
So I basically would want a person who looks at the whole house and gives me the appraisal cost, the areas that need fixing (ex. kitchen cabinets, tiles, bathrooms, plumbing, electricity, etc.), and how much the cost would be.
Then this way, I could decide to proceed or not based on the assessment. Not sure, if this means hiring multiple people (one for appraisal, one for inspection, one for cost estimates)
3. Last, how do you find the ARV? (After Repair Value; is this another person you have to hire?)
4. Any websites or groups people recommend for Florida to find full duplex/triplex/quadruplex?
Hey Bob,
Depending on the lender, I am assuming you are working with some hard money lenders, their appraisal or BPO will probably include an opinion subject to the scope of work.
ARV is relatively easy to figure out yourself, made easier and more accurate working with trusted agents and managers.
Im not as active as I should be but I have seen several Facebook groups dedicated to Florida Multifamily deals. I have one potential multifamily in need of a minor rehab in Palm Beach county. Probably not what you're looking for but I'm happy to share it with you.
Goodluck!
- 2yAJ WongBusiness MemberReal Estate Broker · Oregon & California Coast · Member since 2022 · 822 posts · 695 votes
HI Bob. A quality local RE Broker/Agent in tandem with a reliable contractors should be able to help you with full analysis of post rehab value. The more detailed estimates prior and during contingency, the more accurate the assessment. You can't generally create a contingency on the proposed value, but you will likely have an appraisal contingency that it must appraise for the purchase price. Be careful with properties that need too much rehab and won't finance, a strategic lending parter can be helpful there. I'm no longer active in Ft Lauderdale but grew up there and have an extensive network. In fact my friend has an off market Triplex in Pompano and another north Ft Lauderdale he has considered selling. They are active AirBnB's. Check in with @Joseph Chiofalo he's a local strategic lender and licensed RE Broker that supports investors. He can give you some general financing guidelines that can refine your search and forward some listings for reference. DM me for the off market deals... Good luck!
Sesemi | STR Brokers powered by Fathom Realty 516 Reviews - Banker · Henderson, NV · Member since 2023 · 316 posts · 73 votes2y
Hi Bob,
There are a few ways to go about structuring the financing for this type of deal.
What purchase price range is the property?
Also, would you be purchasing this as a primary residence or investment?
- Broker · Logan, UT · Member since 2013 · 1k+ posts · 1k+ votes2y
Find yourself a good investor-friendly real estate agent.
Your questions span several competencies:
--Sourcing properties
--Helping find a contractor
--Structuring due diligence contingencies
--Assessing value
This is what real estate agents do. And you need local knowledge to find the professionals and get a sense of market rents and values.
Any Florida agents out there that can help @Bob Asad?
Good luck!
- 2yBob AsadInvestor · West Palm Beach FL · Member since 2024 · 66 posts · 25 votesOP
Quote from @Joseph Chiofalo:
Hi Bob,
There are a few ways to go about structuring the financing for this type of deal.
What purchase price range is the property?
Also, would you be purchasing this as a primary residence or investment?
This would be an investment property and it's around $500k
- 2yDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Bob Asad:
I have a few questions regarding wanted to buy a full duplex or triplex.
I would be using a HELOC on primary residence to get the 20% down payment + costs required to fix.
1. What is it called (form or process) to have the duplex/triplex be contingent based on the amount it will cost to fully renovate/rehab? (In other words, if it's too high, then I can cancel the buy and not have to lose any money)
2. Who do I need to hire during the process in Step 1? (is it just an inspector and that's it? What's the name of the position or person who can tell me exactly a price range for what areas of the duplex/triplex need to be fixed and how much they cost?)
So I basically would want a person who looks at the whole house and gives me the appraisal cost, the areas that need fixing (ex. kitchen cabinets, tiles, bathrooms, plumbing, electricity, etc.), and how much the cost would be.
Then this way, I could decide to proceed or not based on the assessment. Not sure, if this means hiring multiple people (one for appraisal, one for inspection, one for cost estimates)
3. Last, how do you find the ARV? (After Repair Value; is this another person you have to hire?)
4. Any websites or groups people recommend for Florida to find full duplex/triplex/quadruplex?
Answers for my market which may or may not be accurate for your market
1) standard offer has 17 days to pull out for whatever reason you desire. Earnest money is not at risk until after this time. You can change the 17 days to a larger number but it weakens your offer. During this period check/verify everything that you want checked/verified. Inspections, rehab costs, ARV, etc. note after this period you can still get out if you cannot obtain the financing (assuming you kept in the finance contingency).
2) inspectors will inspect but not usually provide accurate cost. A GC will be able to provide an accurate price but especially if you are new to using them may want to be compensated for the walk through. If you use a GC to determine the cost, you should have them as a candidate for the rehab. If you have used the GC a couple/few times, he likely will not charge you for the quote.
3) if you know the market well, you will know the ARV. There are tools that can be used to help determine ARV, but perhaps the easiest is to obtain a value from a realtor. If you use a realtor to obtain ARV, you should highly consider using the realtor for purchase or selling. If you purchase with a realtor, that realtor should be able to provide you an ARV value (especially if they are any good)
good luck - Specialist · NJ · Member since 2022 · 1k+ posts · 649 votes2y
So you can out lots of contingencies in a contract. Tell them you want a 7 day inspection contingency.
I'd have my GC (who you really need to find first, vet them, meet with them, feel them out, ask for referrals, look at their work) walk through and take pics and start formulating the costs.
The ARVs can be pulled for you by an agent. They can look up the sales for last 6 months in any area and then from those sales pick out the houses with similar square footage, same bed/bath count, and then average those sales out and that's your ARV.
Florida can be rough. The fixer uppers are not cheap to get into and your capped on your ARV so the spreads can be thin and the permitting can be a nightmare. If you do not have 100k+ as capital I'd be careful in FLA. The money in FLA is made with the ground up. Buying a lot and building new and selling a brand new house never lived in. That's your top dollar exit.
- 2yRobert EllisBusiness MemberDeveloper · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
Quote from @Mike Klarman:
So you can out lots of contingencies in a contract. Tell them you want a 7 day inspection contingency.
I'd have my GC (who you really need to find first, vet them, meet with them, feel them out, ask for referrals, look at their work) walk through and take pics and start formulating the costs.
The ARVs can be pulled for you by an agent. They can look up the sales for last 6 months in any area and then from those sales pick out the houses with similar square footage, same bed/bath count, and then average those sales out and that's your ARV.
Florida can be rough. The fixer uppers are not cheap to get into and your capped on your ARV so the spreads can be thin and the permitting can be a nightmare. If you do not have 100k+ as capital I'd be careful in FLA. The money in FLA is made with the ground up. Buying a lot and building new and selling a brand new house never lived in. That's your top dollar exit.
absolutely. do you work in new construction in florida? any connections in Miami? please send me a message
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