Does anyone invest in and manage homes that have old or antiquated plumbing systems?  Many of the 2-4 multi-family homes in my area have cast iron drain/waste pipe and galvanized water supply pipe.  It's not uncommon to see rust weeping from a CI plumbing stack elbow or galvanized steel water lines flowing at a trickle during an open house.  Given that these are both big potential cap expenditures that could come due in the first few years (or worse if left unaddressed), how are you all estimating, planning, and negotiating the purchase price based on plumbing issues.  

For example, I know CI plumbing stack replacement is not necessarily uncommon, but it would seem to require several weeks where the property was vacant for the plumbers to remove, install and reconnect the waste lines in a 3-story multi.  How do you go about planning for such work?  I figure I would need a vacant property, and thus I would need the leases to align so I could end the tenancy or I'd have to pay my tenants for alternative living arrangements.  If I wait for the leases to end this could take at least one rent cycle since the leases don't currently align.  So the work would be maybe two years out, but what if the replacement couldn't wait?  How long can emergency repairs hold?  I looked at a property recently that had this problem.  I missed out on making an offer before another was accepted (it's a hot market).  2 of 3 units were rented on long term lease and the last rented month by month.  It really got me thinking how I would do it.  I still think the property was a good deal as it had good bones, was otherwise well maintained, and in good area of my city.  By my estimates it would also cash flow positive with more than enough to also cover the maintenance and long term cap ex.  

I know everything "depends", but I'm specifically trying to keep things non-specific, so we can talk more about thought process than analyzing this specific deal.  I would have made and offer, but I was too slow.  So now I have more time to think about this problem for the next one.

I would also love to hear your own experiences with old or antiquated plumbing and how it affected your rentals or your decision to invest.

The galvanized supply lines would be more of an issue than the cast iron drain lines. Cast iron tends to "catch" things more and will be more prone to clogging if items are flushed that shouldn't be. Cast iron pipe can be replaced with PEX or PVC/CPVC and wouldn't necessarily have to all be done at once. Sections of cast iron drain pipes can also be replaced with PVC. If you were doing a gut rehab, it would make sense to replace it all.

@Kristofer Kretsch

I am having a plumber look at the cast iron and galvanized piping in a single family house that I am under contract on right now, so my situation might not match your scenario exactly, but it may be in the ballpark.  I will let you know what comes of this, if you are interested. :)

Same type of thing here in Chicago, and I imagine all over the country as it was standard building practice of the times. I had to replace galvanized supply lines in one of my 4-unit buildings (three stories; one unit below grade, three above). There are companies that specialize in retrofitting old plumbing with new copper or pex- it's all they do. While they may be more expensive than just hiring your average plumber, the savings in my mind was the convenience and speed at which they did the work. 

The project took a total of 2 days, this while the building was fully occupied. I simply notified the tenants well in advance that the water would be periodically shut off during those days (this was before covid so most of the tenants weren't home during the day anyways). The contractor worked in such a way that at the end of the first day they turned the water back on so tenants still had water that evening. Inside each unit they had to cut an opening in the drywall to access the mechanical chase that brought the piping up from the basement into each individual unit. From each unit they would feed 10' sticks of copper through the opening to make the connections for the risers. Unfortunately in Chicago pex isn't allowed so it probably could have been even faster. This particular contractor also did the patching & taping of the drywall, and I painted once finished. 

So with that as the background I can say from experience that it certainly can be done, and you do not need to wait for the building to be vacant to do so. Now when I walk through potential deals I don't mind seeing galvanized plumbing, I just know I have to factor in cost to replace it at some point. That's the million dollar question- when will it plug up/start leaking/etc. 

I’m a former plumber and when I decided to get into real estate  that was one of the factors.  I knew I could value-add by doing the plumbing rehabs myself.

The drain lines:  Cast iron itself would not concern me as much as the fact that when I see cast iron mains/stacks the house will usually have 1 1/2” galvanized drain lines for the kitchen sink.  This is often a long line because many floor plans have t(e kitchen located away from the bathrooms.  Plan on cutting the sink drain line out and replacing it with PVC.  Those lines are almost always clogged/running slow and it is futile to waste t8me snaking them out.  Lab and bathtub drains will need replacing too but the 4” main can often stay.  The galvanized water lines I replace because I know they will be leaking soon if they aren’t already.  I like to use CPVC or PVC.

@Kristofer Kretsch this is a consistent issue here in the Chicago area for sure, and every property I own has galvanized supply lines (at least to start!). I have replaced them when gutting, and sometimes I have just done the parts we could get to while using dialectic unions to connect copper to galvanized. I spend a lot more time focusing on supply lines than drain lines, and as others have stated your cast iron stacks don't go out that often. You can also make patches pretty easily if you have to, so I wouldn't do the whole stack unless you have a vacant building anyways. 

I also have an older home built in the fifties. Hopefully repairs can be in sections and not needed all at once. 

Originally posted by @Kristofer Kretsch :

Does anyone invest in and manage homes that have old or antiquated plumbing systems?  Many of the 2-4 multi-family homes in my area have cast iron drain/waste pipe and galvanized water supply pipe.  It's not uncommon to see rust weeping from a CI plumbing stack elbow or galvanized steel water lines flowing at a trickle during an open house.  Given that these are both big potential cap expenditures that could come due in the first few years (or worse if left unaddressed), how are you all estimating, planning, and negotiating the purchase price based on plumbing issues.  

For example, I know CI plumbing stack replacement is not necessarily uncommon, but it would seem to require several weeks where the property was vacant for the plumbers to remove, install and reconnect the waste lines in a 3-story multi.  How do you go about planning for such work?  I figure I would need a vacant property, and thus I would need the leases to align so I could end the tenancy or I'd have to pay my tenants for alternative living arrangements.  If I wait for the leases to end this could take at least one rent cycle since the leases don't currently align.  So the work would be maybe two years out, but what if the replacement couldn't wait?  How long can emergency repairs hold?  I looked at a property recently that had this problem.  I missed out on making an offer before another was accepted (it's a hot market).  2 of 3 units were rented on long term lease and the last rented month by month.  It really got me thinking how I would do it.  I still think the property was a good deal as it had good bones, was otherwise well maintained, and in good area of my city.  By my estimates it would also cash flow positive with more than enough to also cover the maintenance and long term cap ex.  

I know everything "depends", but I'm specifically trying to keep things non-specific, so we can talk more about thought process than analyzing this specific deal.  I would have made and offer, but I was too slow.  So now I have more time to think about this problem for the next one.

I would also love to hear your own experiences with old or antiquated plumbing and how it affected your rentals or your decision to invest.

We hate capital expense surprises so when we purchase a new building our preference is the buildings be vacant but when they are not we've used a few different strategies:

1. If a building is partially occupied & if construction plans allow it we'll work on one part of a building then offer current tenants the first opportunity to occupy the updated units. 

2. If the construction plan mandates that the building be vacant then we run the numbers to determine the cost to move current tenants out by various means, cash for keys, eviction, helping tenants find a new apartment,....  The analysis also considers how long the plan to vacate will take. If the numbers work then we pull the trigger to invest. If not, then we pass.