12 Unit Property Value Add Oppurtunity

13 Replies

Hey BP Fam I have a new deal in the Atlanta GA it’s a 12 unit property with 1bed 1bath in each unit for a total of 12 beds and baths plus a basement. It needs everything!! From new plumbing, electric, floors, Sheetrock, exterior work, etc. it’s in an amazing location with great potential for long term cash flow, not to mention the entire neighborhood is on the rise. I’m still new to Atlanta so I’m looking for a contractor that can give me a solid estimate for the construction and rehab of the property before I decide to move forward. I would appreciate any contacts or leads in the right direction but time is vital in this situation. “Let’s buy some property!”

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)

Roof: $20,000

Exterior Repairs (Stucco & Wood): $15,000

Exterior Paint: $20,000

Gates/Railing/Fencing: $10,000

Windows: $20,000

Hardscape: $30,000

Landscape: $30,000

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

Garage/Parking: $4,500

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.

@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. 

@Derek Moore

Hi Derek

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.

Good Luck

Gino

Originally posted by @Anthony Dooley :

@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. 

OP had a question and no one seemed to want to answer on the East Coast w/ local numbers so I gave my opinion on what it would cost me in Southern California to provide him a barometer.  Those #'s are real world actual #'s from 4 different projects I just completed. 20, 20, 16 & 9 unit projects. 

@Derek Moore by your description it is hard to give you any suggestions on price. As a project manager for the last fifteen years specialized in multi-family capital projects, I have seen a lot of different things. I do have a company that turns apartments, and I would gladly give you a quote provided that I am able to look at the property. 

Also, keep in mind what Gino said. If you are spending $60k/door, you might want to re-consider it. 

I haven't done any multi-families bigger than duplexes, but I'd think the cost per unit for a bigger property should be less than what I spend per unit on duplexes. 

In the past 2 years I completely renovated 6 duplexes and spent between 35 and 50K per duplex (not per unit). 

Plumbing shouldn't be more than 1k/unit. Rewire depends on whether the walls are open or whether it needs to get fished through the walls. I'm presently having a 4/2 house rewired and it's $ 4500. I had a duplex rewired for $ 5500 (but also had another electrician quote me 11.5k for that same job).

HI Michaela....How are you ? I just started my real estate journey with a Flip in Marietta...Needs some work...Can you please recommend some contractors ?

Originally posted by @Kiran Chanda :

HI Michaela....How are you ? I just started my real estate journey with a Flip in Marietta...Needs some work...Can you please recommend some contractors ?

I'm sorry Kiran, but I can't help you. I don't know anyone in the suburbs.....I act as my own contractor 

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