Multifamily Dilemma For 3 or 4 units

9 Replies

Hi BP,

Please give me your thoughts on this 3 unit. It's in move in condition the asking price is 112K, it's in a very nice and clean area. Has 6 total bed rooms. 3/2/1 with a 2 car garage. One problem is there is only one heating unit ( gas boiler) I would want to install 2 hot air furnaces for the 2 first floor apartments. There is a basement

In my area ( and I've been looking in surrounding area's) it's hard to find low priced 3/4 unit property in b/c+ areas. The taxes are high in many of my local Cities, 6.5k is about as low as you can get while many other area's may be lower they are mostly 2 families or in very bad high crime areas for cheap property.

Thanks!

main st schnctdy

If it's been on the market a while, try a low offer.  Many sins are forgiven if you get it cheap enough!

You need more information to see if it is a deal.  But just based on what you have there are questions

One heating source for all three units? Was this a SFH before?

Cost to split up?

You say there are few low priced 3 bedroom in b/c areas.  Based on what research?

You need to know the rents that this is and could get.  You will need quotes on the cost to install the new heating sources.

What condition is the property, as in age of the building and appliances.

If possible see if this is listed as a three unit on the tax records, this will give some info about if the split was done legally.

Bottom line there is a lot more research that needs to be done on this before you move forward

@Sean Ploskina , thanks for the response. Did the link work for you? I used the BP calculator for all of the numbers., taxes, rents, furnace cost, etc.

I don't know if it was a single family before, however it is listed as a 3 family by the City, it has 3 electric meters for each apartment. Cost to split up from a contractor is 6k to 8k.

I've been looking in this area for a year and most decent properties are in the 90k range and up. This 3 family is in "very good" condition with new or next to new appliances.

No the link doesn't work.   

It will be pretty obvious by looking the building if it was designed to be a triplex.

If it's separately metered for electricity, why don't you just install electric heaters in each unit and forget the forced air heating unit?

2nd option, if your tenants won't want electric heat, is put gas heaters in each unit and see about metering the gas separately.

The building I managed was not separately metered. But, different tenants want their units different temperatures. Ours had a gas wall heater in each unit. Each unit also had it's own gas hot water heater.

Although, you could just keep the current system and just put in your leases that you promise to keep the units at least 60 degrees (or whatever) and if they want it warmer, they can use their own electric space heaters.

@Sean Ploskina

It is listed by the City as a 3 family, I think it was always a 2 family turned into a 3 unit. It's listed as a 3 family by the City.

Thanks for the reply

@Sue K. , Normally   back east the electric heat is expensive ( from my previous 2 family tenants would ask that question, is it electric heat?) LOL, that is a thought though. My last place had electric heat and I installed gas heat for the 2 unit.

Metering the gas seperately would be easy it had 3 gas meters at one time. Perhaps they all had gas stoves and now they are all electric. Thanks so much for your imput.

I don't know why the link didn't work. We tried it a few times, guess it only worked on our end.

@Sue K.

Thanks for taking the time to read my post.

OK this is the bp tool for rentals. I hope you are able to view the link below The asking price is 112K

I will self manage, but I did add in PM cost.

I'm going to offer 95K, a property like this one sold last April for 92k ( 4unit) I know because I offered 90k and did not get it.

http://www.biggerpockets.com/buy_and_hold_results/...

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