Under contract on a 1925 quadplex in Columbia, SC — would you renegotiate or walk?

Question

I'm looking for some experienced investor opinions on a quadplex I'm currently under contract on in Columbia, SC.

Location: Downtown ColaType: 4-unit quadplexYear built: 1925Unit configuration: 4 x 2BR/1BA

My plan is to use a hybrid rental strategy:

• 2 units as long-term rentals to students/professionals
• 2 units as furnished mid-term rentals, primarily targeting traveling nurses/professionals

Based on my current research, I'm estimating:

• LTR units: $1,600–$1,700/month each
• MTR units: ~$2,100/month each
• Estimated gross monthly rent: $7,400–$7,900
• Estimated gross annual rent: $88,800–$94,800

There are some significant capital expenditure concerns, however.

Current condition / planned improvements

The property was built in 1925 and still has Federal Pacific electrical panels.

Only one unit currently has central HVAC and stackable in-unit washer/dryer hookups.

I received a contractor quote of approximately:

• $52,000 to add central HVAC to the other 3 units• $5,500 to add washer/dryer hookups to those units• $6,000 to add washer/dryers to those units• $24,000 to furnish the 2 units I plan to operate as mid-term rentals ($12K/unit)

So I'm already looking at roughly $87,500 in known upgrades/improvements, before accounting for any electrical work or other surprises that come with a 1925 property.

Negotiation

I'm currently considering going back to the seller with something like:

Option 1: $55K price reduction with the seller completing the necessary electrical upgrades

Option 2: $75K price reduction if the seller doesn't want to make repairs/upgrades

I'm trying to determine whether those numbers are reasonable or whether I'm approaching the negotiation incorrectly.

My experience level

This is probably important context: I don't have extensive rehab experience.

I've personally hired contractors to do things like gutters and a French drain, and I have experience managing a duplex in Rosewood, Columbia as a mid-term rental. I've also hired a contractor to handle some subfloor work on that property.

However, I've never taken on a project of this size or a property this old.

What I'm trying to figure out

If you were underwriting this deal, what would concern you the most?

Specifically:

1. Purchase price

What price would this deal make sense given the projected rents and ~$80K+ of known improvements? I'm estimating ARV at $613K with all units on central heating/air and stackable washer/dryers. How does that number sound?

2. Federal Pacific panels

Would you require the seller to replace these before closing?

Would you instead negotiate a credit/reduction and have your own electrician handle it after closing?

Are there other electrical issues in a property this old that I should specifically investigate beyond the panels?

3. HVAC

The $52K quote is for adding central HVAC to the remaining 3 units.

Would you spend the money to make all four units consistent, or would mini-splits make more economic sense for some/all of the units? The contractor told me that mini-splits would come out more expensive due to the layout of the units. He says you would need 1 for each bedroom and 1 for the living room and 1 for the kitchen but another contractor said that I would only need 2 -  1 in living room and 1 in hallway that should be good enough for the kitchen and bedrooms.

4. Older-building risk

What are the major "gotchas" I should be looking for in a 1925 quadplex?

I'm thinking about things like:

• Electrical
• Plumbing
• Sewer lines
• Foundation
• Roof
• Crawlspace
• Subfloor/framing
• Windows
• Lead paint
• Asbestos
• Code compliance
• Fire separation
• Egress
• Insurance
• Permits
• Utility configuration

What am I missing?

5. Rental strategy

Would you use the hybrid strategy of 2 LTR + 2 MTR?

Or would you make all 4 units LTR for simplicity?

The MTR strategy is attractive because I already own/manage a furnished MTR duplex in Columbia, so I'm familiar with the general model.

6. Due diligence

If you were in my shoes and still had an inspection/due-diligence period available, what inspections would you order before deciding whether to proceed?

I'm particularly interested in recommendations for evaluating a 100-year-old multifamily property.

Bottom line

I'm trying to avoid making the classic mistake of looking at the potential rent and getting excited about the deal while underestimating the capital expenditures and operational complexity.

At the same time, I don't want to walk away from a potentially good multifamily acquisition simply because it's an older property that needs work.

I'd especially appreciate responses from people who have actually bought/rehabbed older multifamily properties or invested in the Columbia, SC market.

Happy to provide additional numbers from my underwriting if that would help.

N C. · Answer

Qais, I wouldn't walk yet, but I also wouldn't pick a $55K or $75K reduction until you've finished due diligence and know what you're actually buying.

The $87,500 you've identified is already significant, but on a 1925 four-unit property I'd be much more concerned about the unknown CapEx behind the walls than the furnishing budget.

I'd use the remaining due-diligence period to get:

• Licensed electrician evaluation of the entire building — not just a quote to replace the Federal Pacific panels
• Sewer scope
• Plumbing inspection, including identifying supply/drain materials
• Structural/foundation/crawlspace inspection
• Roof evaluation
• HVAC evaluation/second opinion on central vs. mini-splits
• Insurance quote BEFORE the inspection period expires
• Review of permits, legal 4-unit use, fire separation/egress and utility configuration

I would especially want the electrician looking for old wiring, undersized service, grounding issues and what will be required when those panels are replaced. The panel replacement could uncover a much larger electrical scope, so I personally wouldn't have the seller perform that work just to get it closed. I'd rather know the actual cost and negotiate the price/credit so I control the contractor and quality of the work.

I also wouldn't automatically spend $52K on central HVAC without getting additional HVAC opinions. The question isn't necessarily “central vs. mini-splits,” but what system gives you the best combination of installation cost, operating cost, tenant comfort, maintenance and rent premium for THIS particular layout.

As for the rental strategy, since you already operate MTR in Columbia, 2 LTR + 2 MTR doesn't bother me. But I'd underwrite the acquisition assuming all 4 units are LTR first. If the deal only works because two units HAVE to achieve $2,100 furnished rents, that's additional risk. Let MTR income be the upside rather than what saves the deal.

The biggest number missing from the post is your CONTRACT PRICE.

If your ARV is $613K and you already know you're putting $87.5K into it before electrical and unforeseen repairs, the purchase price determines whether this is a great opportunity or a money pit.

I'd calculate:

Purchase price

• immediate CapEx
• electrical
• closing/financing costs
• carrying costs during renovation+ 10–15% rehab contingency= true all-in basis

Then compare that number against BOTH the $613K ARV and stabilized NOI/value.

If you post your contract price, current rents, taxes, insurance estimate, utilities paid by owner and financing terms, we can actually work backward and see what purchase price I'd be trying to renegotiate to.

Ashish Acharya · Answer

Qais, I would not walk solely because it is a 1925 building, but I also would not renegotiate based on a round $55K or $75K number yet. I’d use the remaining due-diligence period to quantify the unknowns, then renegotiate from documented bids.

You already have about $87,500 of known improvements before touching the Federal Pacific panels or uncovering anything else. My biggest concerns would be electrical, sewer/plumbing, foundation/crawlspace, roof, fire separation/egress, insurance, and whether prior work was properly permitted. I’d get a licensed electrician who understands older multifamily, a sewer scope, structural/crawlspace inspection, roof inspection, and an insurance quote before deciding.

For the Federal Pacific panels, I’d personally rather negotiate a credit or price reduction and control the work with my own licensed electrician, unless your lender or insurer requires replacement before closing. I’d also get another HVAC opinion before spending $52K. You need to know what configuration actually performs properly in these units, not simply which system has the lowest installation quote.

I like that you already know the Columbia furnished-rental market. I’d still underwrite the property both ways: 4 LTRs versus 2 LTR + 2 MTR, including utilities, furnishings replacement, vacancy, cleaning/turnover, and additional management. If the hybrid model only works at perfect MTR occupancy, I’d be cautious.

There’s an important tax opportunity here too. Because you’re planning substantial renovations, track every component separately from day one. Once the property is placed in service, cost segregation may accelerate depreciation on qualifying components, but whether those losses actually help you currently depends on the passive-activity rules and your overall tax situation.

Also, when you replace existing components such as HVAC, electrical, flooring, or other building systems, detailed records may help your CPA evaluate a partial disposition, potentially allowing recognition of the remaining basis of a component that was removed instead of continuing to depreciate something that no longer exists.

I’d make the go/no-go decision only after you know the real electrical and structural number. On a 100-year-old property, the unknown CapEx is more important than whether the seller agrees to exactly $55K or $75K.

Happy to connect!

Gregory Acs · Answer

It sounds like you're asking the right questions, especially since this is your first project of this size. I'd be less concerned about the known repairs than the unknowns that often come with a 100-year-old property. Before deciding whether to renegotiate or move forward, I'd want specialists to evaluate the electrical system beyond just the Federal Pacific panels, the sewer line, foundation, roof, and any signs of deferred maintenance that could turn into six-figure surprises. I'd also make sure your underwriting still works if renovation costs come in 15-20% higher than expected and the MTR units take longer to stabilize than planned.

From a negotiation standpoint, I'd focus on the total cost to get the property to your target condition rather than trying to negotiate line by line. If the seller won't move enough to leave you with a comfortable margin, I'd be willing to walk.

Have you built a contingency into your renovation budget, or are those contractor quotes essentially your full capital budget?