How to renovate multi family units while tenants are in there

Question

Just listened to the deeper dive of the most recent episode 368 where the lady talked about how she cashed flowed on her 3 triplexes side by side by doing BRRRR.

I have a question about that. When you inherited tenants when you bought the triplexes, how would you rehab the properties when the tenants were still in there while paying hard money lender? I am facing the problem now where the I can’t rehab my triplex until the tenants move out which will be in about a year. Any insights will be greatly appreciated!

Theresa Harris · Answer

Why do you want to renovate them while tenants are there? If they are under a lease, you won't get more money in rent. Wait til they move out and then renovate. If there are outstanding repairs, that is different. You could talk to them and do it while they are on holidays.

Account Closed · Answer

Some people will just let you work on their unit piece by piece. Or you can move them into another unit, but you will have to keep one empty. Or like most people wait until they move out. If they're paying rent and you're satisfied with the cashflow then there's not rush.

Mike Giallanza · Answer

Focus on updating the exterior now for curb appeal, and then tackle the interior once the tenant moves out. The exterior is important because a prospective tenant will not know what the other two units look like on the inside, nor will they care. In an effort to maximize the increase in rent, make sure the outside looks like the whole tri-plex is worth more. Then, one by one as the tenants move out you can update the interior and rent each unit for more. Paint goes a long way, and so does pruning trees if they're overgrown, on top off and all around the units. Another thing I've done is to plant perennial flowers, especially multipliers like lilies and daisies. Year after year they'll start to take over the flower beds and it makes a huge impact on the curb appeal. I know this sounds silly, but in a 6-plex I managed I went from 4 men/2 women, to 4 women/2 men renting the units. It's a small sample for sure, but I think a lot of that was due to the curb appeal that I created for the property.

Mike McCarthy · Answer

@Patrick Simmons renovating with tenants is a pain. I’d get the cash flow until their lease runs out (or maybe even longer if they want to stay) before starting any reno. You can always do exterior items and such.

I went through that last year with a 3fam. It needed a lot of work including new plumbing, sewer, hvac etc. which wasa pain for the tenants who were there. But was able to target one unit for a complete reno. One at a turn, the others are cruising along... it’ll be worth the reno when the tenants move out, but I’m happy with things as-is for now.

Will Barnard · Answer

If you have tenants in with leases, you can’t unless they agree or unless you give them cash for keys.

How to renovate multi family units while tenants are in there

How to renovate multi family units while tenants are in there

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