Old multi-family building in Chicago...what to upgrade and how much?

Question

Hi fellow BPers!!

TIA on all your insights and advises. I am highly interested in investing into a multi-family brick oversized building in Chicago (5000 sqft 3 units), but am intimidated by the scope of the work. This building has been vacant for over a year but seems to be in decent shape inside. However, there have not been a lot of updates on the mechanicals and interiors. I have done real estate investing in multi-units previously, but they have mostly been updated in the past 20 years. On this one:

1. Electrical fuse system - I likely will need to re-wire the entire 5000 sqft?

2. Plaster walls and popcorn ceilings

3. Boiler HVAC system with no forced air and no AC

4. Original plumbing from the 1800s

5. The building seems to be structurally sound but do I need to bring in structural engineers to inspect?

6. Original flooring and additions in the back

7. Need to add extra bath and WD hookups

Any suggestion on where to even begin? I am still in inspection period but would love to understand if there are any potential unanticipated surprise. Additionally, what would cost be on something like replacing boiler to central HVAC and electrical fuse to circuit breaker and rewiring of everything? Am I too bold to undertake this project?

Again, thank you in advance!!

Tj Floros · Answer

I did a gut rehab on 3 unit about 6 months ago and it was about 290k for all new plumbing, electrical, hvac, kitchen and baths. I would estimate about 100k per door for a full gut.

Anita Afandy · Answer

Thank you so much all for the responses! I really appreciate this community and all the expertise you are sharing with me. @Jonathan Klemm I will be in touch!

Eudith Vacio · Answer

Hey @Anita Afandy

Definitely reach out to @Jonathan Klemm, he is the expert in the space of construction but it sounds more like a gut especially if the walls are plaster and then you have to update electrical / plumbing. In most cases, it's easier to just rip the walls and re-do everything since plaster is harder to repair. Regardless, renovating properties to force equity is the way to go!

Aaron Zimmerman · Answer

Great questions. I'd recommend reaching out to@Jonathan Klemm - he's an expert contractor in the Chicagoland area

Jonathan Klemm · Answer

No problem @Anita Afandy!  Jumping into real estate is a VERY tough thing to do, heck, jumping into anything new is very hard!

Having a community like we have in Chicago definitely should encourage you to keep going no matter what - there will be tons of issues and challenges, but the persistence to move forward and build your resilience is what makes the successful people successful in my opinion!

Let us know exactly how we can help and you'll get help (also an undervalued skill - asking for help!)

David Bovyn · Answer

100k a door for a full rehab in the area is what I would expect.

Kerlous Tadres · Answer

Hi Anita, I recommend starting with a comprehensive inspection, particularly of the electrical, plumbing, HVAC, and structural elements. Rewiring the building and upgrading to central HVAC will likely be necessary, and those can be pricey, so get quotes from contractors. Don’t forget to budget for plumbing work and adding the extra bathroom. If the structure looks solid, it’s still smart to bring in a structural engineer. It’s a big project, but with the right planning and team, it could be a great investment.

Jonathan Klemm · Answer

Hey Hey @Anita Afandy - Awesome to see you on the hunt and making things happen!  What area of Chicago is the property in?

Sounds like you have a great potential property on your hands.  It's normal to feel a bit overwhelmed or intimidated by the level of renovation, but the MOST IMPORTANT thing you can do is get a crystal clear scope of work together!

Having that will show any contractor that you know what you want and can clearly communicate your needs to them.  We've walked and renovated many buildings like this...we would be happy to take a look.

This is something that would require architectural plans as well so keep that in mind.  Happy to connect and walk through the process in more detail.

Old multi-family building in Chicago...what to upgrade and how much?

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