Looking for Approximate Expenses for Old Louisville Multi-Family

11 Replies

Hey Louisville BP,

I'm have a bit of trouble analyzing deals and I was hoping you could help. The trouble is that sellers have not responded to my (or my agent's) requests for numbers on expenses. So when I go to plug numbers into the investment calculator I use random numbers which produce inaccurate cash-flow estimates. So I was hoping some of you with experience in Old Louisville could share some average expense numbers for a 3-4 unit multi-family. I'm looking for the average costs of water, garbage, insurance, and sewage.

Thanks for any help you can offer.

Felix  

You can put in an offer contingent on your due diligence on the expenses. That is done all the time on larger multi-family properties. 

Hi Felix,

The water/sewer will depend the number of units and occupancy.  A triplex with studios will be very different than a fourplex with two bedrooms each.  For 3 people I'd plan on around $180 every two months.  

Garbage is covered in your taxes in Old Louisville (and the entire urban service district, AKA, the original city of Louisville before it was expanded to the entire county) as are streetlights and occasional junk pickup.  

Just don't buy a place down there that doesn't have separate gas and electric.  That stuff can eat you alive.  

Best, 

 - Chuck

for an insurance quote, just ask your insurance agent. I pay about 75 for a triplex in old lo Louisville.  

For water, call Louisville water and ask the average cost; they should tell you.  I Think 180 Is a good number; adjust up for kids and 3 bedroom+ family size.

it is the repair and maintenance on 100 year old homes that you need to consider.

I agree with the comments above...if you are paying for heat/electric it could get very expensive for you.  You may be able to get the power information from LG&E and water/sewer from Lou Water.  If all you are paying is 'common' electric such as hallway and porch lights, it should be pretty small, perhaps under $35/month.  

Even if you get the expense data from the seller, you need to cross check that data.

And I also second Clay's comment about repair and maintenance.  I love the old buildings b/c the construction is so solid.  But roof, boiler, HVAC replacements can be quite expensive.  So you need to know where you are in the life span of those items as you work a place up. Also, I have heard that in Old Louisville there are some specific parameters for exterior work, like window replacements, because it is an historic district.  I don't know details on that, but that is worth checking out.  Maybe someone else can comment about this in particular? Hate to find out your window replacement will thousands of dollars more than you expected!

 If you get a place under contract, I think it is worth every penny to get a good inspection of the building.  There might be safety issues that need to be addressed right away, and at very least you will get a good idea of what big ticket items might be needing attention.  I've worked with an inspector who is really thorough, puts together nice, detailed reports, and does not get all worked up about silly items.  PM me if you are interested and I'm happy to share his contact info with you.

The biggest thing in Old Louisville is that you are not allowed to alter the exterior of the building, remove trees, or use vinyl windows on any street/side alley facing window.  You need to request permission for this type of work.

A little more background on Old Louisville zoning - it was designated a Traditional Neighborhood Zoning District / TNZD (I believe around 2000) and that's how it can enforce all of these additional requirements on external appearance of the property (which btw if you want to change anything about the exterior as @Clay Smith described you would need to file for a Certificate of Appropriateness / COA) as well as what the property is permitted to be used as (single family, duplex, multi-family). 

Most of the multi-family properties in Old Louisville are old single family homes that have been chopped up into multiple units. As long as these buildings have been continuously operating as multi-family properties since before the TNZD was established they are grandfathered in and you will be OK. But if not the zoning folks can demand that you return the building to single family or duplex. Critical things to look for as far as establishing continuous operation as a multi-family is that each unit has a separate LG&E meter (also essential to keep costs under control as several others have mentioned), a separate entrance, a separate kitchen, and a separate bath.

Thanks everybody. We are getting ready to buy our first multi-family and seriously looking at the Old Louisville and south end areas. This is great info and makes me realize how much I have to learn! 

Karen Lane

Originally posted by @Clay Smith :

for an insurance quote, just ask your insurance agent. I pay about 75 for a triplex in old lo Louisville.  

For water, call Louisville water and ask the average cost; they should tell you.  I Think 180 Is a good number; adjust up for kids and 3 bedroom+ family size.

it is the repair and maintenance on 100 year old homes that you need to consider.

Hi Clay, I'm curious who your insurance is with. I had a heck of a time finding an insurer for the big old house we just bought in Old Louisville. One wouldn't cover houses with bars on windows, one didn't do homes in historic districts, and most of them wanted to insure it for eye-popping replacement costs. State Farm, who I've had for 10 years on my current home, put it at more than a million(!) for the house and another 300k+ for the garage. This on a property that assesses at 100k. We ended up going with Erie, which doesn't insure in states known for wildfires or hurricanes and they were still much higher than the mortgage folks had estimated.

Originally posted by @Dana McMahan :
Originally posted by @Clay Smith:

for an insurance quote, just ask your insurance agent. I pay about 75 for a triplex in old lo Louisville.  

I'd also love to know which insurance company this is. 

"Affinity specializes in providing insurance coverage for investment properties, including locations that are Tenant-Occupied, under Renovation (Builder’s Risk) or Vacant. We offer Basic Form and Special Form policies. Additionally, we allow our clients to pay month-to-month and change the status of a location as it becomes necessary, giving you a bit more flexibility as a property owner.

I’ve added a link below that will allow you to add information about yourself and the property you would like us to quote. Once completed, a Regional Sales Associate will be in touch to discuss further."

NREIG Proposal Request Link

--this is who I use. 

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.