Apartment turns in old multi family houses

[Frank Maratta]

I’ve done about 20 apartment turns to this date. I always seek a higher end product, it helps attracting new tenants and things like wiring, overhead lighting with switches, in each room, all new interior solid core six panel doors, and all new plumbing help to make me to rest easy with very little maintenance.

up till now, I have always “pieced” these apartments back together. What I mean when I say “pieced” is that the multiple holes the electricians cut for wiring (and they are a lot) get patched, old varnished window and door casing gets sanded down and painted white, interior doors are slabs we cut down rather than pre-hung ( and in some instances the slabs we hang expand and don’t close and require trimming after time, hinges dont always hold, ect.  

A friend of mine recently took another approach to this and it got me thinking. He demoed everything down to the studs and just started fresh. 

His approach is certainly much easier and straightforward and at the end of the day his costs were similar to mine. 

Keep in mind these are all old house knob and tube, and plaster walls and Ceilings  and we all know that once you start cutting holes or Channels for the Electrican, plaster is a nightmare to deal with and piece back together. 

What do you guys who own apartments do for unit turns? Do any of you take the demo- to the studs approach or do you leave the knob and tube and basically just do the bare minimum with new flooring, paint, cabinets ect? 

For me, the old trim, doors, and old electrical is really what seems to cause more work then it’s worth. 

Demoing to the studs gives a nicer finished product with all new Sheetrock trim, wiring, ect. And seems to be a more efficient approach.  

Thoughts?

[Kevin Sobilo]

@Frank Maratta, excellent post!

First off, I have taken a similar approach to you. I work with what I have as much as possible. I have taken vacant uninhabitable homes and turned them into what I consider B class rentals in modest working class R-2 residential neighborhoods where most houses are C class.

On a rehab, I never gut a house. I upgrade most electrical. On a 2 story home, first floor outlets are easily rewired from the basement and 2nd floor outlets and ceiling fixtures are accessible from the attic with minimal intrusion. If necessary, in bedrooms some surface mount could be used. When furniture is in place surface mount conduit is barely visible anyways. Most times I am not using surface mount though.

The one place where wiring sometimes doesn't get updated is first floor ceiling fixtures. That is to save on excess patching and because its the least important to replace in my opinion. With the change to LEDs VERY little power is pulled through those wires.

When it comes to patching, I never considered patching plaster to be that difficult. It is a little more work than drywall, but the finished product is very good because with plaster walls, I often finish the process by skimming all of the walls with joint compound creating walls that almost like like new drywall. An advantage of keeping the plaster is that its SOOOO much more durable than drywall. So, there will be a little less maintenance going forward. 

With doors and trim, I have not had the issues you describe. 80% of the time I am keeping the original doors and painting them. Since I don't gut the house, the woodwork is also staying and being painted. With doors I need to replace, I have gone cheaper with hollow core doors. I only use pre-hung doors when I am framing a new space not in an old opening. They are light so, they tend not to get tight unless the house itself moves a little.

With flooring, I tend to refinish the wood floors in bedrooms because its cheaper and more durable and because I own a floor sander. In public spaces I will refinish floors if they are really nice or use LVP mostly.

I think this approach is quite a bit cheaper than a gut rehab both in materials and in labor.

Also, my goal is B-class. Could I make it somewhat nicer with a gut rehab, sure but would that make my deal better? Not really. I would spend so much more it would be harder to refi out all my money on a BRRRR deal and if I did, the refi loan would be larger making it harder to cash-flow. If I was flipping houses the math might be different but I'm doing BRRRR.

[Frank Maratta]

Quote from @Kevin Sobilo:

@Frank Maratta, excellent post!

First off, I have taken a similar approach to you. I work with what I have as much as possible. I have taken vacant uninhabitable homes and turned them into what I consider B class rentals in modest working class R-2 residential neighborhoods where most houses are C class.

On a rehab, I never gut a house. I upgrade most electrical. On a 2 story home, first floor outlets are easily rewired from the basement and 2nd floor outlets and ceiling fixtures are accessible from the attic with minimal intrusion. If necessary, in bedrooms some surface mount could be used. When furniture is in place surface mount conduit is barely visible anyways. Most times I am not using surface mount though.

The one place where wiring sometimes doesn't get updated is first floor ceiling fixtures. That is to save on excess patching and because its the least important to replace in my opinion. With the change to LEDs VERY little power is pulled through those wires.

When it comes to patching, I never considered patching plaster to be that difficult. It is a little more work than drywall, but the finished product is very good because with plaster walls, I often finish the process by skimming all of the walls with joint compound creating walls that almost like like new drywall. An advantage of keeping the plaster is that its SOOOO much more durable than drywall. So, there will be a little less maintenance going forward. 

With doors and trim, I have not had the issues you describe. 80% of the time I am keeping the original doors and painting them. Since I don't gut the house, the woodwork is also staying and being painted. With doors I need to replace, I have gone cheaper with hollow core doors. I only use pre-hung doors when I am framing a new space not in an old opening. They are light so, they tend not to get tight unless the house itself moves a little.

With flooring, I tend to refinish the wood floors in bedrooms because its cheaper and more durable and because I own a floor sander. In public spaces I will refinish floors if they are really nice or use LVP mostly.

I think this approach is quite a bit cheaper than a gut rehab both in materials and in labor.

Also, my goal is B-class. Could I make it somewhat nicer with a gut rehab, sure but would that make my deal better? Not really. I would spend so much more it would be harder to refi out all my money on a BRRRR deal and if I did, the refi loan would be larger making it harder to cash-flow. If I was flipping houses the math might be different but I'm doing BRRRR.

Kevin it seems like we take a similar approach here to our turns. The only difference I would have to note is perhaps the plaster in your area is reinforced with wire mesh. In that case, yes, I would agree it’s very strong. However, in my area, 80% of the plaster is just plaster and lath, it breaks, it splits, it’s weak. 

as far as the doors go; most of these old doors are varnished and required sanding and also have the old style door knobs that tend to break, parts are hard to find. This is why I just end up cutting in slabs and new style knobs. Tell me about your method, you paint right over the varnish? Does the paint stick?

and yes, there’s something to be said about the ease of wire mold for electrical, but wire mold itself is quite pricey in itself. I use this approach sometimes as well. 

the big thing is the ceilings. Most of these apartments have NO electrical overhead fixtures in the ceilings, or if they do- it’s a pull chain fixture wired to knob and tube. And not to mention, ugly pop corned ceilings    Yes, sometimes we wet it and scrape it off. But then we end up cutting channels for the electrician depending on which way the joists run for the ceiling lights.  At the end of the day, what I’m starting to realize is, it’s just easier to demo out the ceilings, new electrical for overhead lighting, and sheet rock.  Maybe it’s just me, but I’ve always felt overhead lighting with a switch in each room helps to attract tenants. Feel free to disagree, I’d like to hear your thoughts. 

as you mentioned you skim coat the old plaster walls. I’ve done this too, but there’s something to be said about patching and skim coating takes time. 

we seem to have the same mind set, and yes I agree with you about some of the electric being accessable from the basement or attic, but some of these unit turns are 3 story buildings, so either the basement isn’t accessable or the attic isn’t accessable. 

I think the next turn I do, I’m going to send a crew of guys to demo out everything and start new. Just as a test to see what my costs end up being, versus putting things back together piece by piece. I can also insulate this way. Tenants won’t jump on an apartment because it’s insulated, they don’t know the difference. But I think overtime, the energy costs may speak for themselves and sooner or later that’s a factor they would take into consideration before a move. 

[Kevin Sobilo]

Quote from @Frank Maratta:

Quote from @Kevin Sobilo:

@Frank Maratta, excellent post!

First off, I have taken a similar approach to you. I work with what I have as much as possible. I have taken vacant uninhabitable homes and turned them into what I consider B class rentals in modest working class R-2 residential neighborhoods where most houses are C class.

On a rehab, I never gut a house. I upgrade most electrical. On a 2 story home, first floor outlets are easily rewired from the basement and 2nd floor outlets and ceiling fixtures are accessible from the attic with minimal intrusion. If necessary, in bedrooms some surface mount could be used. When furniture is in place surface mount conduit is barely visible anyways. Most times I am not using surface mount though.

The one place where wiring sometimes doesn't get updated is first floor ceiling fixtures. That is to save on excess patching and because its the least important to replace in my opinion. With the change to LEDs VERY little power is pulled through those wires.

When it comes to patching, I never considered patching plaster to be that difficult. It is a little more work than drywall, but the finished product is very good because with plaster walls, I often finish the process by skimming all of the walls with joint compound creating walls that almost like like new drywall. An advantage of keeping the plaster is that its SOOOO much more durable than drywall. So, there will be a little less maintenance going forward. 

With doors and trim, I have not had the issues you describe. 80% of the time I am keeping the original doors and painting them. Since I don't gut the house, the woodwork is also staying and being painted. With doors I need to replace, I have gone cheaper with hollow core doors. I only use pre-hung doors when I am framing a new space not in an old opening. They are light so, they tend not to get tight unless the house itself moves a little.

With flooring, I tend to refinish the wood floors in bedrooms because its cheaper and more durable and because I own a floor sander. In public spaces I will refinish floors if they are really nice or use LVP mostly.

I think this approach is quite a bit cheaper than a gut rehab both in materials and in labor.

Also, my goal is B-class. Could I make it somewhat nicer with a gut rehab, sure but would that make my deal better? Not really. I would spend so much more it would be harder to refi out all my money on a BRRRR deal and if I did, the refi loan would be larger making it harder to cash-flow. If I was flipping houses the math might be different but I'm doing BRRRR.

Kevin it seems like we take a similar approach here to our turns. The only difference I would have to note is perhaps the plaster in your area is reinforced with wire mesh. In that case, yes, I would agree it’s very strong. However, in my area, 80% of the plaster is just plaster and lath, it breaks, it splits, it’s weak. 

as far as the doors go; most of these old doors are varnished and required sanding and also have the old style door knobs that tend to break, parts are hard to find. This is why I just end up cutting in slabs and new style knobs. Tell me about your method, you paint right over the varnish? Does the paint stick?

and yes, there’s something to be said about the ease of wire mold for electrical, but wire mold itself is quite pricey in itself. I use this approach sometimes as well. 

the big thing is the ceilings. Most of these apartments have NO electrical overhead fixtures in the ceilings, or if they do- it’s a pull chain fixture wired to knob and tube. And not to mention, ugly pop corned ceilings    Yes, sometimes we wet it and scrape it off. But then we end up cutting channels for the electrician depending on which way the joists run for the ceiling lights.  At the end of the day, what I’m starting to realize is, it’s just easier to demo out the ceilings, new electrical for overhead lighting, and sheet rock.  Maybe it’s just me, but I’ve always felt overhead lighting with a switch in each room helps to attract tenants. Feel free to disagree, I’d like to hear your thoughts. 

as you mentioned you skim coat the old plaster walls. I’ve done this too, but there’s something to be said about patching and skim coating takes time. 

we seem to have the same mind set, and yes I agree with you about some of the electric being accessable from the basement or attic, but some of these unit turns are 3 story buildings, so either the basement isn’t accessable or the attic isn’t accessable. 

I think the next turn I do, I’m going to send a crew of guys to demo out everything and start new. Just as a test to see what my costs end up being, versus putting things back together piece by piece. I can also insulate this way. Tenants won’t jump on an apartment because it’s insulated, they don’t know the difference. But I think overtime, the energy costs may speak for themselves and sooner or later that’s a factor they would take into consideration before a move. 

@Frank Maratta, no wire mesh in the plaster. However there is often horse hair in it or even human hair! You have to look carefully to see it though. ANY kind of plaster is stronger than drywall. Drywall dents and breaks with little effort. Plaster does not.

However, yes older plaster from 100 years of heating and cooling (expansion and contraction) does develop some issues such as pulling away from the lath. However that can be fixed by drilling a pattern of holes, inserting adhesive and using screws to temporarily hold the plaster in place until the adhesive dries.

Most of my houses already have painted doors, but modern latex paint can go over something oil based. I would just scuff it up with sand paper, use a primer and then paint with a semi-gloss white.

If you have doorknobs like this I think they are fine and rarely break.

If you have surface mount doorknobs. I don't like those either but you can get modern replacements.

https://www.amazon.com/A29-Hor...

I like overhead lights as well. No need to cut channels where there is attic access to add light fixtures though. So, the only issue for me would be first floor ceilings. Yes, I would cut a channel or whatever I need to run them.

Patching is a LOT less work and cost than demo and doing a whole ceiling. I could patch a ceiling like that in a couple hours where demo and hanging a whole new ceiling by myself would be a solid day or so of work. Its probably 4-5x the work in my option plus the extra material and disposal costs.

I agree tenants won't take a place for insulation and may not even appreciate it, but I do as much as makes sense to me. When I consider MANY options with my scope of work, I look at what is "typical and expected" in the rentals around me. A C class rental in my area might have 4" of attic insulation, no wall insulation, and old aluminum storm windows. So, if I exceed that I am setting myself apart. It might be adding a few more inches of blown insulation to the attic, replacing windows, and insulating walls in some rooms that I do demo like a bathroom.

Tenants (and even homebuyers) are NOT analytical by nature or at least VERY VERY few are. So, with functional aspects of the home they look at something as a problem or not and then they are picturing how they will live in the home. So, the features that they see affecting how they live are more impactful. Providing a dishwaher or a washer & dryer is cheaper and would better attract a tenant than insulation.

Another reason a tenant won't consider energy costs before they move is that they have little way to compare what they have to what they are looking to move to. If you were paying the heat on a 5+ unit building THAT is when I would REALLY prioritize insulation.

Also when you demo everything. Think about the cost of the finish work. The moldings etc that you have to install EVERYWHERE versus just giving a good painting before. The material is expensive and the cost to install isn't cheap either and the moldings you buy will probably be of lesser quality than what you removed.