We are analyzing a multi of 13 units which needs a LOT of repairs. Pretty much everything on the inside (walls, floors, ceilings, appliances, etc.) and of course, the tenants, need to be replaced. We have construction experience (we still plan to hire someone to do the work), however, here are some of our concerns and questions:
1. Tenants: What is the best way to clean the multi and bring in new tenants? The current tenants are month-to-month, C type tenants. There are currently 2 vacant units. I have learned here on BP that it is best to work on the common areas first. Should we then start renovating the vacant units to bring new tenants little by little? Should we raise rents right away to current tenants?
2. Distance: We are 2 hours away and will not be available to keep an eye on the day-to-day construction work. Our idea is to go check out the work every weekend, plus request pictures and updates from the contractor at least twice a week. We have no one in the area who could keep an eye on it for us. Has anyone been successful at managing work this way? Any advice?
Thanks for all your input!
i'd be getting pictures daily, not twice a week.
update the vacant units first, then the common areas.
i'd be all over that kind of property. sounds fun and a great deal.
Thanks George! We are making an offer tomorrow. It is much lower than the owner's asking price. Let's hope we get a counter or even better, get it accepted! Will keep you posted.
I just completed a 10 unit turn-around built in the 40's, neglected since the 70's! We renovated all interiors (paint, flooring, kitchens, bathroom, repipe), all Windows, exterior paint, laundry room, parking structure, etc.
Our market for 2 bedroom, 1 bath units is $895. These were renting for $575 when we took possession! We emmediately raised rents to $750, and turned units as they went vacant bringing the new units to full market.
I still have 3 original tenants (10 months later). The 7 other units have been completely renovated. The 3 remaining also got new windows, electrical panels and new piping, just not flooring, paint and kitchen/bath remodels (and they are now within $50 of market rent.)
I just refied the property and we've added $300k+ to the value based on improvements and new income.
Here's the link telling the story of my 10 unit deal. I'll be posting a follow up shortly now that I've completed the refi.
Hope your offer goes well! Good luck!
@Curtis Bidwell Thanks for that info and congrats on the success! Hoping we can follow your footsteps. We made our offer and are now waiting on seller's response. Will keep you posted.
@Curtis Bidwell Just read your post about the deal. Impressive! I left you the following questions there so everyone could see your response:
What kind of financial institution did you use? We went to a local community bank for a 5-unit multi (another deal) and they turned us down due to the repairs needed to be done. When you say you had a solid deal, what exactly did you present to them (I am assuming the prospective value, rents, etc.)?
Thank you for your feedback!
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