I am looking at buying a stabilized apartment here in DFW built in the 1960's and was wondering if there are any age-related pitfalls that I need to be aware of. Also, is there a good rule of thumb for a maintenance per door cost when preparing a proforma?
Well, some issues that may be problems (or may not) that I can think of:
- Aluminum wiring was used in some areas starting in the mid or late 1960s to save copper for the war. Check if it has that. It can be retrofitted for probably $1000 to $2000 per unit, depending on number of outlets in each unit.
- Lead paint. If you care. Only really an issue if you plan on doing some serious demo/remodel.
- I think they may have used gyp board with asbestos. Again, only an issue if you do demo/remodel.
- Probably has galvanized sewer drain line(s), which may be nearing the end of their useful life. Can be retrofitted with a liner, or replaced.
- Don't know if they insulated walls/ceilings back then (assuming this is wood framed) in Texas. They didn't insulate them here in CA in the 1960s.
- I've heard of soils issues in parts of Texas that may have affected the foundation/structure, check if that's an issue in your area.
That's all I can think of right now. Maintenance costs probably depend a lot on the type of construction of the building, how well it's been maintained, and whether any of the above issues have been addressed already.
Thanks for the reply - very helpful. I will makes sure to look at those potential issues.
hahaha. you could not resist could you?
I sure did make it easy for a response like that.
Can't believe I didn't mention the galvanized plumbing lines for water. I said galvanized for sewer, but meant cast iron. Got all mixed up as I was thinking and typing.
Anyway, check if it has galvanized plumbing, or if it's been replaced with copper or some other replacement pipes. Galvanized pipes from the 1960s don't have that much time left in their lives.
Also, don't know if it's raised foundation, or slab on grade, or has a basement, but you'll want to get that looked at too. Especially if water is an issue for basements out there (I'm from SoCal, I know very little about water issues or basements!). I assume you're hiring an inspector?
Is there an elevator? If yes, it might not be replaceable because of shaft size or support. Maintenance can rack up if the elevator needs constant patchwork.
Stabilized for how long will be key unless you are paying all cash or getting all owner finance.
You want to see a complete 85% or better occupancy ideally for a couple of years. Some buy and then try to sell a year later having stabilized for only 5 or 6 months. That is a very tough sell to lenders at a 75% LTV because they feel it might go back down again. The track record just isn't long enough to make the lenders feel comfortable with it.
I do know some who will do it putting 40 to 50% down to limit risk. I would work on the stabilizing statement first from the seller and see what that means before getting into anything else.
One other is have the windows been replaced? Especially if the HVAC is central, with single pane windows the owner is paying to 'heat the whole neighborhood!' as my dad used to say.
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