Knob and Tube with three breaker boxes in Little Rock Triplex

General Landlording & Rental Properties
5yFollow

Knob and Tube with three breaker boxes in Little Rock Triplex

Warren A.
Bay Area, CA · Member since 2016 · 80 posts · 43 votes

Hi , I am in closing stage of a triplex in Little Rock .  It has three 100A breaker panels in the back of the home.   3rd party inspector noted knob and tube in the attic and highlighted it's risks.  I've done a search on BP and have read a number of threads strongly recommending replacement of knob and tube so I am familiar with the safety concerns.   

I contacted our insurance broker and to my surprise, the reply was " There is not a limitation on coverage for wiring. So there is no issue."   So that's nice from a liability perspective but I am still concerned about tenant safety.

I confirmed seller will not replace knob and tube at their expense and their comment,  "Per the electrician - there is active knob and tube wiring in the attic. It appears to be in good condition and he is not seeing any spots missing insulation. He is giving this a 9 rating for the condition of the wire on a 1-10 scale."

The 3rd party inspector also informed me that while K&T is a red flag, it's not illegal .

Additional context:  We like the location and upgraded all the window AC units to one central unit for one unit and mini split systems to the other two units.  So we really want to make this transaction work out.

My questions

1) With the breakers, is that considered a layer of safety in case of overload ?

2) If I don't replace K&T now, are there any additional precautionary measures I should take to further insulate the wiring?  

3) Are there other questions I should be asking the electrician to ensure safety?

Below snippet from inspection report and photos of K&T in attic ,

0Reply
69 views

Investor-friendly agents in Little Rock, AR

See the agents BiggerPockets members work with in Little Rock, AR.

Most Popular Reply

JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
5y

I will say one thing - the insulation on that K&T looks fantastic, better than about any I have ever seen. I can see why they gave it good marks on visual inspection. The one picture I can't tell if it's bending around what looks like a dryer vent, that's not a good situation. That attic must have had great ventilation; heat and dampness tends to break down the covering over the wire. If the room stays cool and reasonably dry (not desert dry) and the wires don't have a lot of hard bends often it's not in bad shape.

Breakers are a safety feature for overload but a breaker can't tell if a single K&T wire is getting hot or not. Better protection is an arc-fault breaker, because arcing from missing insulation is one of the dangers of K&T.

As for insulating, obviously anything that looks like it is loose or coming apart I would re-wrap with good quality electrical tape (electricity off, of course, when you do this) but beyond that you want to keep combustibles away from the wiring. 

Podcast Guest on Show #243
Skyline Properties
View Page
1Reply
See this reply in the discussion

6 Replies

Jump to latestLatest
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
    5y

    I will say one thing - the insulation on that K&T looks fantastic, better than about any I have ever seen. I can see why they gave it good marks on visual inspection. The one picture I can't tell if it's bending around what looks like a dryer vent, that's not a good situation. That attic must have had great ventilation; heat and dampness tends to break down the covering over the wire. If the room stays cool and reasonably dry (not desert dry) and the wires don't have a lot of hard bends often it's not in bad shape.

    Breakers are a safety feature for overload but a breaker can't tell if a single K&T wire is getting hot or not. Better protection is an arc-fault breaker, because arcing from missing insulation is one of the dangers of K&T.

    As for insulating, obviously anything that looks like it is loose or coming apart I would re-wrap with good quality electrical tape (electricity off, of course, when you do this) but beyond that you want to keep combustibles away from the wiring. 

    Podcast Guest on Show #243
    Skyline Properties
    View Page
    1Reply
  • Warren A.
    OP
    Bay Area, CA · Member since 2016 · 80 posts · 43 votes
    5y

    I got quote for K&T job for about $9.2K . Scope of work

    1. We will rewire all outlet
    2. We will rewire all Switches and lighting
    3. We will remove all Knob and tub in attic
    4. We will provide all new outlets and Switches

    Challenges #1 : The house is move in ready. The walls are plaster in some rooms which means that they could possibly crumble and crack once you cut into them which could require more extensive repair and patchwork. Some of the plaster walls are heavily textured which would create additional challenges in trying to match. Some of the walls are paneling which could easily be replaced and painted, but that would most likely then require replacing full 4x8 sheets which means more paint work. Some of the ceilings are plaster and some have ceiling tiles which creates similar challenges once they are removed and patchwork required. But until the K&T is removed and replaced with Romex, the contractor could only give me a rough estimate of $5K - 10K .


    Challenge #2: There may be other issues that come up once this is permitted and the City becomes involved. While everything is now up to code and grandfathered as is, there may be additional things the City will require once rewiring. From what I understood from electrician, the City may require some adjustments to the new service boxes outside (junction box) to bring them to current code. They could also require Arc fault circuit interrupters. While these things were not required when the services were upgraded in the past, they will sometimes require if permits are pulled and rewiring is done. This could be additional $2.5K to $5K ?

    We purchased at $209K , are financing this , and closed last week. Property is vacant now but is being marketed. So post purchase repairs would be $9.2K+$10K+5K (worst case scenario) = $24.2K or let's round it to $25K. So total price would increase from $209K to $234K. Aggregate rent expected to be $2025 per month. Initial down + closing --> $59K. Then add $25K --> $84K into this deal. Estimate $9K annual from rent after PITI + 10% buffer --> 10.7% . So even with electrical + restoration, still ok? The triplex is directly across from a hospital so we feel it has good long term potential.

    Also, my thinking is , if we were to this electrical reno, now would be the best time since all units are vacant.

    Seller did offer to buy back the property if we did not want to proceed with the electrical reno.

    Would you still proceed with the reno or have seller buy back?

    0Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    5y

    @Warren A.  If you can proceed with the electrical, providing the value in the area is holding. Plaster and sheet rock aren't a big deal. You should get multiple estimates and a timeline. The biggest issue for our latest reno was getting an electrician. we had 5 total with the last one doing finally doing most of the work.

    1Reply
  • Warren A.
    OP
    Bay Area, CA · Member since 2016 · 80 posts · 43 votes
    4y

    I wanted to update on this.  Knob and Tube was replaced with Romex and passed city inspection.  All walls patched up.  I sleep better at night now.

    0Reply
  • Nate Sanow
    I​nvestor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes
    4y
    Quote from @Warren A.:

    I wanted to update on this.  Knob and Tube was replaced with Romex and passed city inspection.  All walls patched up.  I sleep better at night now.


     Just found the thread and late to the party but looks like you made the right call.  I'd sleep better at night, too.  I couldn't tell if your plan was to Brrrrr or if this was an intentional value add play, but either way I think you did yourself a favor over the long haul.  In my opinion, it is likely you would have still paid for this electrical work down the road and if it was when a tenant was in that can cause other problems with them.  

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free