If it is as much work as you say so, I'd start with $75,000.00 - $85,000.00 a unit and work your way from there.
@Phil Christian hey thanks for the reply but those numbers sound like I would be way over spending for the market. It does need tons of work but for the sake of perspective.. the target tenant will be college students looking to live off campus.
Originally posted by @Derek Moore :
Phil Christian hey thanks for the reply but those numbers sound like I would be way over spending for the market. It does need tons of work but for the sake of perspective.. the target tenant will be college students looking to live off campus.
If it's what you say it is it sounds like a complete re-build.
Interior Units: $25,000 a unit ($300,000)
Exterior Repairs (Stucco & Wood): $15,000
Exterior Paint: $20,000
Furnishing/Mail Boxes: $4,000
Site Lighting: $5,000
Electrical Re-Wire: $7,500 unit ($90,000)
Re-Plumb: $4,000 unit ($48,000)
Laundry Facility: $5,000
20% GC Fee
= $61,350 per unit.
I was a little off but I didn't take into consideration extensive drywall repair on the interior units. Nor did I take into account code upgrades/ADA. This said, I retract my previous number and would budget $65,000 a unit... if it's as bad as you say.
Post a picture or link of the property.
Don't worry about the California numbers. Or use them to figure very conservatively. I have learned that's the best way to go. Is this all in one building? You should be able to totally remodel for $50 per foot in Atlanta right now. Likely not including basement property should be around 9000 square feet. So that math says totally remodel and be like new construction for $450,000-$500,000, which is conservative also. If the neighborhood is on the rise then you should be able to get $700 easy for all the units. Using 50% expense ratio to stay conservative, proforma math says this value is $600k+ depending on the cap rate, with $50,000+ NOI. Finding the right contractor will be the tough part. Every single one worth hiring is busy busy.
@Ethan Atkinson the numbers you have here are very closer to the numbers that I was estimating, down to the sq ft and the potential rent. Also, like you said the most important part is finding the right contractor but most of the good ones are unavailable. Would you mind if I sent you a PM? You seem to know a lot about the area and I have a few questions.
@Derek Moore Send it over.
@Phil Christian you are not even in the same universe. You can buy an apartment complex with tenants for less than $60,000 per unit. Wiring a complete house is half of what you are estimating for a one bedroom unit.
Please consider this deal more heavily if you are going to spend 60k per door for renovations to one bed units.
One beds top out at around 700 per month in Atlanta (not 100% sure, but they are much less than 2 and 3 beds). I agree with @Anthony Dooley . I would look to purchase at these valuations, property is cash flowing from DAY 1, much less risk.
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