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Multi-Family and Apartment Investing

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Tab Teehee
  • Rental Property Investor
  • Lake Suzy, FL
216
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171
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Great value add or money pit?

Tab Teehee
  • Rental Property Investor
  • Lake Suzy, FL
Posted Apr 8 2018, 16:02

This is kind of a follow up to a previous post regarding this property. 

20 unit property...twelve 2/1’s and eight 1/1’s. Property is currently owned by my family’s estate and we have it under contract to purchase for $375k. 

Taking the advice of many here on BP, our first order of business was to secure a great property management team, which I’m confident we’ve done. Second order of business, see what rehab needs to be done to command the most rents for the market. 

I felt that we had a fairly solid rehab budget, and we’re close to approaching the bank for the financing, when things started to go south!

One of my proposed  electrical contractors found numerous code violations....costly code violations! 

We had planned to upgrade all 20 service panels and relocate them to a wall, outside of the closet they’re currently installed in. The electrician is worried about some of the wiring to appliances being aluminum, he’s also concerned about the lack of a disconnect between the meter and the service panels. 

We feel that we could be approaching and possibly exceeding 20k per unit rehab cost, so my 375k deal will wind up being 775k!!!!  I know that’s still only $38,750 per unit after rehab, but it really changes the appearance of this investment. We’d really hoped we could max out at 10-15k per unit, but I guess that just can’t happen. 

I really need advice, pep talk, something, lol!

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